Find below information about a hypothetical audit client named Little Store, Inc. You have been assigned the task of auditing Little Stores Sales account for occurrence and completeness. You will be using analytical procedures to test these assertions. Use the information about Little Store to develop expectations regarding Sales at the individual store level (i.e., disaggregated level). Develop your expectations using each of the three methods discussed in class (trends, ratios, reasonableness). In each case, compare your expectations to the actual numbers and identify the stores with a material discrepancy. Use MS Excel to complete your analyses, highlighting material discrepancies in modest colors. Suggestion: Start by importing the table in the case to an Excel file. NOTE: In this part you are required to do a trend analysis. A trend analysis requires at least two years of Information to compute the trend. However, you are only explicitly given prior year sales data, and it is circular to use the change in sales from last year to this year to predict sales for this year. Thus, you have two options. First, you can look to the internet to find industry sales growth trends for the convenience store industry. Second, recall that you have store square footage from the prior year if we assume that stores dont spontaneously grow or shrink. Thus, you can compute the prior year sales per square foot. You are then provided with the industrys current year sales per square foot. Voilayou now have two years of information! By comparing the two, you can find a growth rate, which you can then use in your trend analysis. Little Store, Inc. has eighteen convenience stores located in Oklahoma. Little Store has not opened any new stores for two years, but plans to open at least one during each of the next three years. Operations in the current stores seem to be relatively stable over the past few years, however, they do vary by demographic location and the mix of products sold. The location of a store is based on several factors, such as competition and the economic environment of the location. Stores 1, 4, 6, 7, 8, 11, 13, 14, 16, 17, and 18 are considered to be in favorable locations. Typically, a stores operations do not change much unless a new product line is introduced, such as selling gasoline, offering check-cashing services, or selling lottery tickets. The mix of products and services can vary, with the most important factor historically being whether the store sells gasoline. Stores 3, 4, 5, 6, 10, 11, 12, 13, 14, 15, 16, and 17 sell gasoline. These additional product lines typically affect the volume of customers as well as the number of full time employees.

Additional factors to consider: 1. According to the National Association of Convenience Stores (NACS), industry sales should average about $490 per square foot this year. 2. Little Store outlets follow two basic floor plans. Stores 1, 2, 8, 9, and 18 have 2,500 square feet of room, while stores 3, 4, 5, 6, 7, 10, 11, 12, 13, 14, 15, 16, and 17 have 4,000 square feet of room. 3. In prior years, stores that sold gasoline had an average gross profit percentage of 30.1%, while stores that did not sell gasoline had an average gross profit percentage of only 22.1%. The average for all stores was 28.2%. Cost of Sales has already been audited this year as part of the audit of Inventory. Store Number Avg. 2018 Employees 11.31 12.46 10.06 11.1 10.71 7.5 Sales 2018 (unaudited) 1,146,438 1,195,004 1,981,409 2,300,671 1,956,481 1,799,713 1,820,641 1,159,004 1,139,475 1,984,777 2,293,847 1,984,722 1,798,336 2,484,503 1,837,400 1,609,385 1,874,229 1,198,229 Cost of Sales 2018 (audited) 888,701 911,655 1,398, 296 1,503, 717 1,400, 118 1,266,050 1,418,278 905,618 756,449 1,354,951 1,657,822 1,366,050 1,280,773 1,600,852 1,322,089 1,194,814 1,311,975 908,911 Sales 2010 1,165,221 1,147,430 2,037,463 2,257,920 1,850,354 1,916,884 1,833,209 980,484 1,069,652 1,795,123 2,119,015 1,947,303 1,705,789 2,396,971 1,901,631 1,514,798 1,886,587 1,092,908 Avg. Inventory 2011 44,171 45,714 45,826 53,862 49,883 47,016 59,726 37,664 34,662 38,774 55,423 52,884 46,834 53,772 43,982 44,893 37,665 44,857 11.6 12.7 12.2 11.1 10.4 8.84 12.1 9.7 7.2 10.5 10.9