Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

G.35 Performing an Analytical Procedure Using Client Estimates. Your client has provided you with the following information which they have calculated based on the underlying

G.35 Performing an Analytical Procedure Using Client Estimates. Your client has provided you with the following information which they have calculated based on the underlying accounting information.

Season ticket sales (excluding Champion’s Club) 28.630

Champions Club seats sold 3,404

Student tickets provided, per game 16,000

Average number of complimentary tickets provided 1,400

Average season ticket price $300

Required: For the purposes of performing the following procedure, you may assume that you have tested the underlying transaction-level date produced by the entity (IPE) and it is sufficiently reliable. Assume that performance materiality has been set at $230,000 for the purpose of this analytical procedure. Prepare and appropriately document an estimate of football ticket revenue using only the summary estimates provided above by the client, as well as the client’s summarized single game total tickets issued summary. Use this calculation to test the reported sales revenue of $26,726,864 and answer the following questions:

a. What is your best estimate of 2018 football ticket revenue using the client’s average ticket sales and prices provided in the case? Do not use the actual data for this calculation.

b. Based on the performance of materiality set, does 2018 football ticket revenue appear to be fairly stated? Why or why not?

c. At what level would you assess the risk of material misstatement related to 2018 football ticket revenue after the performance of your analytical procedure (low, moderate, high)?

d. What additional procedures would you recommend performing related to your audit of football ticket revenue?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

a To estimate the 2018 football ticket revenue using the clients average ticket sales and prices provided we need to calculate the total revenue gener... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Corporate Finance A Focused Approach

Authors: Michael C. Ehrhardt, Eugene F. Brigham

6th edition

1305637100, 978-1305637108

More Books

Students also viewed these Accounting questions