AP 3.10

lul u purt ueals have prics ent clients without consulting his older there are often disputes about invoices, and Jim fr credit notes when clients complain about their statements. Jim som customer complaints because he is juggling t his other business, Cafe Consulting, which provides contract staff for t b o different een poorly documented, and Jim often agrees t o rother, Bob, or informing the sales department. Consequentl m makes frequent adjustments to customer accounts using sometimes falls behind in responding to ery busy juggling the demands of making export sales and running he caf business at Avery Island Dairy Required a. Identify the factors that would affect the preliminary assessment d Avery Island Dairy of inherent risk and control risk b. Analyze how these factors would infl approach and the reliance on controls approach for sales, inven uence your choice between the predominantly substantive AP3.10 (LO 5) Inc. (BBF) planned to obtain evidence than any substantive tests of detail. BB in a deferred (unearned) revenue ategy The audit partner in charge of the audit of Big Boy Freight Of BBF's revenue recognition by relying on internal controls rather F receives most freight payments in advance and holds them account, transferring the appropriate amount to sales revenue when er, during subsequent testing of internal controls, a significant number of Basic nsported. Howev instances occurred where revenue was incorrectly recognized immediately upon custome advance, rather than when goods were actually shipped. Required after the initial Discuss the type of strategy planned by the audit partner. Why is it no longer appropriate testing of controls? Source: Adapted from the CA Program's Audit & assurance exam, July 2010. Moderate Ethics Vaughan Enterprises Inc AP3.11 (LO 4, 6) has grown from its beginnings in the steel fabrication business to become a multinational versifed into a range of other businesses, including househol Financial reporting fraud risk manufacturer metal, plastic, and paper-based products. It has also di- appliances in Europe, Australia, and Asia nd supplier of all types of packaging, including