I need help with my team assignment. My part is to do the second bullet (in bold) of this assignment. I have also attached the section my teammate has already done. I am to write a summary of the audit programs she created. The company we chose is Boeing. Their 10K link ishttps://www.sec.gov/Archives/edgar/data/12927/000001292715000011/a201412dec3110k.htm

The first step is to go to the website of a publically-traded US company and select the most recent 10-K Form (legally-required document publicly-traded companies must submit to the Securities and Exchange Commission [SEC] on an annual basis. Among other things, this document contains the opinion of the CPA firm regarding the company's financial statements and adherence to Generally Accepted Accounting Principles [GAAP]. The contents of this form will be the basis of the team assignments in throughout the course.

Consideranddiscussthe specific risks and nature of the company you will be auditing.

Createcomprehensive audit programs for the cash, financial instruments, sale, and receivables accounts and cycles.

Submita 1,400- to 1,750-word document that includes:

• Audit steps for tests of controls, balances, transactions, analytical procedures, etc. as well as other considerations such as sample size and sample methodology.

A brief summary page should be included in this document, 350 to 700 words for each of the audit programs. Include in this summary specific financial information gleaned from the current Form 10-K used to perform an analysis of work program steps. For example, if the team noted significant swings in the Receivables balance year-over-year, identify these swings and how you address them in your work program (this is in essence an audit procedure - analytical review).

Week 2 Team Assignment ACC 492 Natalia Colmenares 12/12/2016 Douglas Hartman Week 2 Team Assignment: Audit program Audit steps for tests of controls, balances, transactions, analytical procedures, sample size and sample methodology. Create comprehensive audit programs for the cash, financial instruments, sale, and receivables accounts. Test of controls Cash Test and see how controls are prepared regardless of the dollar quantity of the primary corporate transaction. Make sure all the control functions properly, so the dollar amount of a transaction is not of consequence to the goal. Perform review of Boeing Cash receipts to insure all receipts are there and none are lost. Financial Instruments Financial instruments have inherently high risks, due to "the complexity of the securities or derivatives, the company's prior experience with certain investments, and whether external factors such as credit risk or interest rate risk impact the relevant assertions." (Arens, Elder, & Beasley, 2014) pg739) Because of these risks we have to extensively assess internal controls to lower the risk to an acceptable level. The controls we need to review would be: Boeings investment strategy, classification of the financial instruments, how they record transactions, and how Boeing determines the fair market value of such assets. Sales Test and see how strong and reliable the sales controls are. Perform review of Boeing sales invoices to insure all invoice #s are there and none are skipped. Also review purchase order authorizations to make sure all purchase orders are approved by management. Receivables The main controls our test will concern with will be on test Boeing controls that avoid or perceive embezzlements, controls above deadline and controls associated to the allowance for uncollectible books. We will test for segregation of duty to see if incoming customer payments and create credit memos are handle by separate individuals. We will review authorization of credit memo. Test of balances Cash Demonstrate all main bank reconciliations at the engagement time. Decrease the quantity of reconciling entry drawn to following month's statements. Trace most reconciling entries to cutoff statements; confirm all accounts and complete broad search for unrecorded transfers ("Accounts Receivable Controls", 2016). Financial Instruments Verify what Boeing owns in securities, derivatives, hedge funds and other financial instruments. Also verify the accuracy of the accounts they have and their value. Sales Verify sales of services and sales of products to confirm these balances are true. Look at cash receipts to confirm these sales actual occurred. Receivables We will review cash application to trace a collection of cash receipts to client bills to authenticate correct cash use. Review to see the accounts receivable in the old trial balance is in harmony with associated main file quantity and the total correspond with the general ledger Test of transactions Cash All assertions are normally relevant in the financial statement of Boeing. Completeness, occurrence and cutoff on all cash businesses throughout the time recorded in the financial statement. Valuation, accuracy, and classifications are related accounts have been included properly. And finally, existence, disclosure and presentation components are exist at given dates and disclosed. Financial Instruments Here we will need to review and test the purchase and sales of any financial instrument, the subsequent gains or losses Boeing received, and any interest and dividend income. Sales Review individual Boeing sales transactions. Verify sales receipts to prove transactions to be accurate. Review ledgers that back up the financial statement to make sure only sales up to the period end date are included. Receivables Review accounts receivable journal entries. Accounting software's are supposed to generate accounting entries. We will review these entries carefully. We will review invoice packets to confirm that the billing staff accurately examined all of the backup bookkeeping and correctly created an invoice. Review billing to shipping log to see there was correspondence invoice or vice versa. We contact third parties like client bank and customers to verify if accounts receivable really exist Analytical Procedures Cash Establish the appropriateness of specific substantive for given declarations, taking into account. Develop an expectation of recorded quantity of any variance of logged totals from anticipated charges that is suitable and associate the documented amounts, or ratios established from recorded quantities, with expectations. Financial Instruments Test the income from interest and dividend income and assess changes in investment strategies from year to year. Sales Review financial ratios of data provided in the Boeing financial reports. Gross profit margin should be reviewed year over year to look for inconsistencies. Look at sales growth from 2013 to 2015 to check if growth rates are typical for the airplane industry. Gross profit margin can be checked by dividing gross profit by the amount of revenues and then compared year to year. Receivables Confirmation is the analytical procedure we will use to test Boeing accounts receivables. We will select at a random from the various subsidiary customer to ascertain how much they think they know and the amount in the records of Boeing. We will also check banks Boeing operate with to ascertain payment from clients correspond with the records of Boeing. Sample size Cash Use attribute sampling for discounts not taken, document not properly approved, invoice not checked for numerical accuracy, item classified or posted to wrong account, and document not report after payment. Financial Instruments Use a non-statistical approach to determine sample size. We look several different factors, the inherent risks, control risks, tolerable misstaments and others to figure how big our sample size needs to be. Sales Use systematic sampling method to get sample size. Subtract highest invoice# from lowest invoice # to get the invoice count of the sales cycle for the audit period. Estimate that a 150-sample size would be sufficient to check. The invoice count would be divided by 150 to determine which intervals to check. Receivables The sample size will depend on the results of the test of controls. If we identify internal controls to be strong then our sample size will be small and vice versa. We will randomly select sample from the various subsidiaries to gather information about it and make inferences about the entire accounts receivables of Boeing Sample methodology Cash Proportional sampling is appropriate for Boeing when dollar amount of items is relevant to the objective of a procedure, particularly when the amount vary significantly. Financial Instruments Because some financial instruments used by companies can be really big and other really small we will use proportional sampling that way our samples will be sorted and picked by the size of the account. Sales The sample methodology we will use is statistical stratified random sampling. This is the most widely accepted approach and will therefore be used for this audit. Assign random numbers to each sales invoice. Use random number generator to pick transactions to verify and then statistically project the accuracy of those transactions back to the population Receivables We will use statistical stratified random sampling methodology. Assign random numbers to each sales invoice Use random number generator to pick transactions to verify and then statistically project the accuracy of those transactions back to the population. References Accounts Receivable Controls. (2016). Retrieved from http://www.accountingtools.com/accounts-receivable-controls Arens, A. A., Elder, R. J., & Beasley, M. S. (2014). Auditing and assurance services: An integrated approach (15th ed.). Upper Saddle River, New Jersey : Pearson