Excel solutions for

Step 4 and Step 5: Define and Identify Substantial Unanticipated Variances. Refer to the text for guidance on materiality.

Apply those guidelines to Step 4 of planning the analytical procedures as part of the revenue cycle for Pharmacorp. Define the meaning of a significant difference. Discuss your reasons for these choices. Discuss the qualitative materiality considerations in relation to this case.

Once you have determined the levels of difference you would consider noteworthy, calculate the Step 1 ratios (and any additional trend or ration analysis you deemed necessary), based on Pharmacorps financial statement figures. Identify the ratios where you expect a significant difference.

Step 6 and Step 7: Investigate Substantial Unanticipated Variances and Ensure Appropriate Documentation. Discuss the accounts or relationships you feel should be investigated further using substantive audit procedures. Discuss your reasons for these choices. Describe the information that should be a part of the auditors report or files.