Case Study: Majestic Hotels, Inc. Using Analytical Procedures as Substantive Tests By Frank A. Buckless and D. Scott Showalter, NC State University BACKGROUND Majestic Hotels, Inc., a privately-held company, has four hotels located in Charleston, South Carolina; Asheville, North Carolina; Savannah, Georgia; and West Palm Beach, Florida that cater to high-end business and vacation travelers. Bank-loan covenants require that Majestic Hotels, Inc. submit audited financial statements annually to the bank. Specifically, the bank covenants contain revenue and occupancy measures that Majestic must maintain to not be in technical default. The accounting firm of Brickman & Joyner, CPAS, has served as the Majestic auditor for the past six years. One of the major audit areas involves testing sleeping room revenues. Sleeping room revenues reached nearly $20.3 million in 2010. In 2011 the unaudited sleeping room revenues are reported to be $21,171,531 with net income before tax of $4,006,627. In prior years, the audit pla