American Accounting Association ISSUES IN ACCOUNTING EDUCATION 2308Viace 50473 Vol, 28, No. 3 pp. 629-636 Ramm Wholesale: Reviewing Audit Work Douglas Kalesnikoff and Fred Phillips ABSTRACT: Designed to be used in an undergraduate or Master's auditing Case asks students to evaluate work performed on the financial state private wholesale merchandiser, Through this evaluation, students can uncover is relating to gaining knowledge of a client and its environment nsk assessm materiality, audit strategy, and specific audit procedures for the revenuelreceivables receipts accounting cycle. The Teaching Notes provide support both for jnstructors who ask students to prepare the Case in advance of class and for instrdctors instead assign the case for analysis in real-time during class, whereby the case is read aloud paragraph-by-paragraph and issues are discussed a Keywords: assurance, working paper review; audit risk mafenality audit strategy. THE C amm Wholesale, Inc., incorporat distributor of kitchen appliances, cookware products, and consu ies The president, Mary Maxall, has been working in retail sales for Ramm is a private corporation that has recently enjoyed significant sa h as result of embarking on an extensive advertising campaign and implementing a sa system. To support the sale rking capital needs increased significantly. Ramm financed expandea, much of the additional working capital with an increase in its revolving line of credit at National Bank. Ramm must a bank ant that limits the maximum amount borrowed under the line of credit to than percent of receivables plus 50 percent of inventory, using the results in si m's audited year-end financial statements. Violation of this covenant fiy higher interest rates and gives the bank the right credit balance. &B) has been Ramm's auditor since its appointment for the December 2009 udit tam4eaders ways considered Ramm to be one of the firm's "good" clients. Although the ledge that there were some challenges during the first audit year. they are quick to out that Ramm was able to work around them. For example, when internal controls were examined in 20 quickly determined that a lack of segregation of duties existed in many areas of the company. Based on this observation, T&B assessed most control risks at the Douglas Kalesnikof is an Assisant Prefessor and Fred Phillips is a Professor, both at the Universiy The authon dank Regan Schmidt and two anonymous reviewers for comments on a prior version of the case. Published online: April 2013 American Accounting Association ISSUES IN ACCOUNTING EDUCATION 2308Viace 50473 Vol, 28, No. 3 pp. 629-636 Ramm Wholesale: Reviewing Audit Work Douglas Kalesnikoff and Fred Phillips ABSTRACT: Designed to be used in an undergraduate or Master's auditing Case asks students to evaluate work performed on the financial state private wholesale merchandiser, Through this evaluation, students can uncover is relating to gaining knowledge of a client and its environment nsk assessm materiality, audit strategy, and specific audit procedures for the revenuelreceivables receipts accounting cycle. The Teaching Notes provide support both for jnstructors who ask students to prepare the Case in advance of class and for instrdctors instead assign the case for analysis in real-time during class, whereby the case is read aloud paragraph-by-paragraph and issues are discussed a Keywords: assurance, working paper review; audit risk mafenality audit strategy. THE C amm Wholesale, Inc., incorporat distributor of kitchen appliances, cookware products, and consu ies The president, Mary Maxall, has been working in retail sales for Ramm is a private corporation that has recently enjoyed significant sa h as result of embarking on an extensive advertising campaign and implementing a sa system. To support the sale rking capital needs increased significantly. Ramm financed expandea, much of the additional working capital with an increase in its revolving line of credit at National Bank. Ramm must a bank ant that limits the maximum amount borrowed under the line of credit to than percent of receivables plus 50 percent of inventory, using the results in si m's audited year-end financial statements. Violation of this covenant fiy higher interest rates and gives the bank the right credit balance. &B) has been Ramm's auditor since its appointment for the December 2009 udit tam4eaders ways considered Ramm to be one of the firm's "good" clients. Although the ledge that there were some challenges during the first audit year. they are quick to out that Ramm was able to work around them. For example, when internal controls were examined in 20 quickly determined that a lack of segregation of duties existed in many areas of the company. Based on this observation, T&B assessed most control risks at the Douglas Kalesnikof is an Assisant Prefessor and Fred Phillips is a Professor, both at the Universiy The authon dank Regan Schmidt and two anonymous reviewers for comments on a prior version of the case. Published online: April 2013