Premium Essay

Audit

In: Business and Management

Submitted By bishara
Words 1162
Pages 5
Auditing
Inventory Test..
Physical Counts – ideally year end but in the interim period..roll forward- reconciling items to get to the balance sheet dates.
Disclosure and Presentation
Complexity
Susceptibility to theft
Movement of inventory
Lower of cost or mrket
Effects og gross profit
Production plan for Apollo
Think about planning, quantitiy, disclosure
Review clients instructions, stop flow of goods, make test counts
Inventory listing- physical listing..

Apple, boeing, healthcare
985-605-15-3c
605-20-25-1
985-604-25-78

QUESTION NUMBER 1
What is the primary purpose and design of Jupiter (including risks that Jupiter was designed to create and pass through to its variable interest holders)?

SOLUTION
Jupiter was created as a joint venture from Saturn Inc. and Venus Inc. One of the purposes for the creation of Jupiter was to give Saturn an opportunity to expand its manufacturing of children’s clothing and to provide Venus with a chance to exit this business line. Although, the main purpose was to own and operate organic clothing design and manufacturing facilities, and sell organic clothing. Risks that Jupiter was designed to create and pass through to its variable interest holders include labor pricing risks, outstanding receivables on sales of inventory, and product pricing risk based on purchases of raw materials and sales to retailers.

SOLUTION 2
In order to determine if Saturn Inc. and Venus Inc. are variable interest holder the ASC 810-10-20 was used, it states: “The investments or other interests that will absorb portions of a variable interest entity’s (VIE's) expected losses or receive portions of the entity’s expected residual returns are called variable interests. Variable interests in a VIE are contractual, ownership, or other pecuniary interests in a VIE that change with changes in the fair value of the VIE's net assets

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