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Horizontal analysis refers to changes in financial statement numbers across two or more years. Vertical analysis refers to financial amounts for each year expressed as

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Horizontal analysis refers to changes in financial statement numbers across two or more years. Vertical analysis refers to financial amounts for each year expressed as proportions of a base such as sales for the income statement accounts and assets for the balance sheet accounts. These analyses and other facts can assist auditors to discern relationships that raise questions about misleading financial statements. Attached is an Excel sheet with select financial statement for Inter-Galactic Services, Inc. for fiscal years 2021 and 2022. Consider the following: a. The company is a cloud service provider that offers one and two year contracts. The majority of clients pay the full contract price in advance. b. The fiscal year end is December. c. The 2021 financial statements is audited. Assume these statements contained no material error or misstatements and relationships represent historic norms. d. Prior years' performance has been flat. e. A new CEO was appointed in December 2021. f. Debt and equity capital was obtained early January 2022 and the proceeds immediately deployed to partially fund the acquisition of property plant \& equipment. No principal payment on any of the company's borrowing is due until 2024 . quired 1. Prepare horizontal and vertical analyses schedule in Excel. Use the provided Excel sheet. 2. Identify and explain apparent errors or misstatements in the unaudited 2022 financial statements and describe your estimate of the amount of the error or misstatement. 3. Prepare a schedule to adjust the unaudited net income for 2022 . Begin with the unaudited net income and end with the revised net income. 4. Submit a properly formatted Excel document for requirement 1 and 3 and a Word document for requirement 2 to the Folio dropbox. You must use formulae for all cells in Excel that are computed and the formulae are not to be hidden

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