Atlanta Cake Co. (ACC) is a medium-size company that purchases cakes from small specialty bakeries around the country and sells these cakes directly to higher-end grocery stores in the southeast region of the U.S. ACC promises its customers fresh and unique cakes made with minimal preservatives and artificial flavorings. Assume you are the senior auditor assigned to the 12/31/2019 year-end audit of ACC. You and a staff have been asked by the manager on the engagement to perform analytical procedures to help identify relatively risky areas that require further attention during the audit, if any. So far, your staff has assembled the following information and performed analytical procedures associated with the accounts below. You are very fortunate to have a very knowledgeable staff that understands how to perform proper analytical procedures (2). Thus, you do not need to perform any additional analytical procedures in order to assess risky areas. For % changes greater than 10%, the staff obtained the following explanations from ACC's management: "The current year accounts receivable balance increased from prior year due to increase in sales. Associated with the increase in accounts receivable, ACC has increased its allowance for doubtful accounts from 2018 to 2019 ." "Due to the increase in sales from prior year, ACC maintains a higher level of inventory in order to meet the increase in demand and avoid stock-outs." Based on the information provided, identify relatively risky account(s) that would require further attention during the audit, if any. In your response be specific as to the account assertion the audit team should be the most concerned with for the area(s) you identified as relatively risky. For any account you deem to be risky, explain why and how you arrived at this judgment. In other words, please support your judgment using the appropriate information provided above. To receive credit for homework you must support your fudgment! \begin{tabular}{lrrrr} & \multicolumn{2}{l}{2018} & 2019 & \multicolumn{2}{l}{ S Change } & % Change \\ Sales & 778,090 & 810,900 & 32,810 & 4.22% \\ Cost of Goods Sold & 450,800 & 459,000 & 8,200 & 1.82% \\ Gross Profit & 327,290 & 351,900 & & \\ & & & & \\ Accounts Receivable & 122,894 & 149,299 & 26,405 & 21,49% \\ Less: Allowance for doubtful & (11,291) & (12,020) & (729) & 6.46% \\ accounts & 111,603 & 137,279 & & \\ Net Accounts Receivable & & & & \\ & 33,270 & 39,901 & 6,631 & 19.93% \\ Inventory & 2,900,100 & 3,100,201 & 200,101 & 6.90% \\ Net Property, Plant and Equipment & & & & \\ Gross Profit \% & 42% & 43% & & \\ A/R as \% of Sales & 16% & 18% & & \\ Net A/R as \% of Sales & 14% & 17% & & \\ Receivable Turnover & 6.33 & 5.43 & & \\ Days outstanding in A/R & 57.65 & 67.20 & & \\ Allowance as \% of A/R & 9.19% & 8.05% & & \\ Inventory Turnover & 13.55 & 11.50 & & \\ Days of inventory on hand & 26.94 & 31.73 & & \end{tabular}