In this case you will complete the audit planning memo for the EarthWear engagement. Additional information to help you prepare this memo can be obtained from the EarthWear and Willis & Adams websites. A planning memo is typically used to summarize the considerations and conclusions involved in several of the audit planning phases youve read about in Chapter 3.

INSTRUCTIONS:

Willis and Adams, CPAs uses the template shown in the "Audit Planning Memorandum" worksheet tab to prepare the planning memo. Some portions have already been completed or begun. These portions are indicated in plain text. Portions highlighted in green will be completed by other auditors; however, brief descriptions of what will be included in these sections of the planning memo are included in the template for instructional purposes. For each of the memo topics that remain to be completed (areas highlighted in yellow), you should address at least two key points about EarthWear Clothiers or the mail order clothing industry. Keep in mind that the points you identify should have important implications for the audit. Address each topic using information from the EarthWear and Willis & Adams websites, the textbook, the work papers provided in this workbook, and prior mini-cases. Fields you are to complete on the form are colored yellow. The color will disappear as the field is completed.

In addition to the analytical procedures already listed in the memo, analyze an additional four that are useful in the planning process for the EarthWear audit (see area highlighted in yellow in "Audit Planning Memorandum" tab). Discuss the meaning of the analytical procedures included and how they may affect your audit plan/procedures. Work Paper 3-6 and the Common Size Balance Sheet and Income Statement for EarthWear have been provided to assist you.

Print a copy of the Print Out to submit in class unless otherwise indicated by your instructor.