DISCUSSION QUESTIONS 3. The following information is available for MVF Company (dollar amounts are in millions): 2016 2015 2014 2013 $21.7 $19.6 $23.2 17.1 $17.4 16.8 Net sales Cost of goods sold Beginning finished goods inventory Ending finished goods inventory Materials purchased 2.3 2.9 10.6 8.8 2. Calculate the following ratios for each year: Gross profit percentage. Inventory turnover. Cost of materials purchased to cost of finished goods produced. b. Analyze the results obtained in 3.a. above: Describe the change in each ratio you observe in 2016. Discuss at least two possible causes of each change observed. 4. All of Kola Company's sales are credit sales shipped free on board (FOB) shipping point. Kola typically records sales transactions (that is, sales and cost of sales) throughout the year on the billing date. The internal auditor gathered the following information and documented it in his working papers. Invoice Number 8351 8352 Date Shipped 12/28/2015 12/29/2015 1/2/2016 1/2/2016 Date Billed 12/29/2015 1/2/2016 12/31/2015 1/3/2016 8353 8354 a. Describe the specific audit procedures that should be performed to determine whether sales transactions occurring immediately before and after year-end are recorded in the proper period. b. Record the adjusting journal entries (ignore dollar amounts) the internal auditor should propose based on the cutoff'information documented above. Include a clear and concise explanation for each proposed entry. 5. Internal auditors are required to document their work in working papers that provide complete, accurate, and concise documentation of the engagement process. Discuss the potential adverse consequences of poorly prepared internal audit working papers