Case 2.4 Asher Farms Inc.
1. First part:
1). Economic factors:
A. Exchange rates can affect an exporter's competitiveness. When inflation occurs in the U.S., currency goes down in value market and profit growth in Asia. It causes an increase in exports.
2). Technological factors:
A. The development of infrastructure and technologies will help Asher to save production costs.
B. Genetic engineering will help the poultry industry to improve the nutritional value of feedstuff and cause broiler chickens to grow very quickly. This is beneficial for reducing the cost of goods sold.
3) Social factors:
A. People are beginning to be aware of health issues associated with meat, so they are changing their eating habits. In recent years, people would prefer to choose a balanced diet rather than a low fat diet. Hence, the demand for poultry meat has consistently increased.
4). Environmental factors:
Mass poultry production could cause water pollution, so the poultry industry has to pay significant amount of money to clean up wastewater.
5). Legal factors:
Congress enacted the Food Safety Modernization Act in order to avoid foodborne outbreaks and regulate the food industry. Hence, poultry processing companies must comply with the law’s requirements.
6). Political factors:
The stability of the American polities can help the poultry industry to achieve sustainable development because the poultry industry do not need to worry that war will destroy the building and equipment.
2. Second part:
1) Economic factors:
Although currency inflation makes the poultry industry sell more meat products overseas, Asher has to put more money into production costs due to inflation. Hence, this factor will influence inventory, account receivable, and cost of goods sold. Similarly, it also can impact accounting of disclosures
2) Technological factors:
In order to be more profitable than its competitors, Asher has to buy more advanced equipment and invest money to develop genetic engineering. This factor will affect cost of goods sold, inventory, plant and equipment. Similarly, it will affect accounting of disclosures.
3) Social factors:
The poultry industry needs to worry that they may not have enough inventory to support the demand of customers. Hence, this factor will influence inventory and revenue. Similarly, it also can impact accounting of disclosures
4) Environmental factors:
The poultry industry has to raise production costs due to water pollution. Hence, this factor will disclose and influence cost of goods sold. Similarly, it also can impact accounting of disclosures.
5) Legal factors:
The poultry industry has to raise production costs because poultry processing must comply with the law’s requirements. Hence, this factor will impact cost of good sold and revenue. Similarly, it also can affect accounting of disclosures.
6) Political factors: The poultry industry will not achieve sustainable development if war occurs. Hence, revenue, inventory, plant and equipment will be affected and disclosed. Similarly, it also can impact accounting of disclosures.
3. Third part:
A. In order to gain a better understanding of potential for material misstatements of the financial statements, auditors should “perform and design the nature, timing, and extent of future audit procedures” (international standard on auditing , 2004).
B. According to ISA 315, “Business risk is broader than the risk of material misstatement of the financial statements”. Hence, auditors do not have responsibility to assess all business risks because “not all business risks give rise to risks of material misstatement” (international standard on auditing , 2004).
C.
1. Revenue and expense recognition for long-term contract
2. The effects of changes in foreign exchange rates.
D.
1. Tornado destroys the equipment.
2. Some products are discarded due to shelf life expiration or damages.

Works Cited
International Standard on Auditing 315. (2004, December 15). International Federation of Accountants. Retrieved 10 1, 2014, from http://www.ifac.org/sites/default/files/downloads/2008_Auditing_Handbook_A100_ISA_315.pdf