ABC Company is a new client for your firm and you know very little about them. The client manufactures and sells household appliances and is considered to be a well-established company. Discussions with the prior auditor did not reveal any substantive concerns. ABC management has provided comparative income statements and balance sheets for the past two years which were audited by the predecessor auditor. They also have included unaudited numbers for 2012, the year under audit. ok You are in the early stages of the 2012 fiscal year audit. Refer to the comparative income statements and balance sheets (click on the terms to go to the statements). Use your general business knowledge, understanding of financial statements, and basic financial analysis to perform a preliminary analytical review of ABC Company, Inc. The results of this analytical review will determine the initial areas of focus for the audit. A complete answer will include: 1. A short list of potential areas of audit focus. 2. A brief justification for each area of audit focus which includes the information used to draw your conclusions (ratios, trends, comparisons with other items on the financial statements, etc) 3. Possible misstatements or other audit issues that may be revealed during the audit which are related to your analytical review results (for example, if you noted significant increases in repair and maintenance expense you may suspect that the corporation has expensed some fixed assets instead of capitalizing them) Note that there is not magic number of items to identify. Missing a particular problem area in the preliminary analytical procedures may result in missing a material misstatement (i.e. not conducting an effective audit) or more likely, result in modifying the audit program later in the engagement. Identifying too many potential problem areas will result in "over auditing" which is performing more testing than needed to arrive at an appropriate audit opinion (i.e. not conducting an efficient audit). An excellent analytical review will discover the most likely problem areas and allow the auditor to design the most effective and efficient audit. ring Refer to the rubric provided. It will explain how you will be graded on this assignment. Upload and submit your file through this assignment. You may submit this assignment in a .doc, .rtf, or .pdf file