Isherent risk Costral risk-Sales Control risk- Cash receipts 2 Control risk- Additional controls Substantive tests of Substantive tests of Cash receipts Substantive analytical Planned detection risk for tests of details of balances Planned audit evidence for tests of details of balances nning phase of the audit, you meet with Pinnacle's management team and perform other planning activities. You encounter the following situations that you During the pla believe may be relevant to the audit: 1. Your firm has an employee who reads and saves articles about issues that may affect key clients. You read an article in the file titled, "EPA Regulations Encouraging Solar- Powered Engines Postponed?" After reading the article, you realize that the regulations management is relying upon to increase sales of the Solar-Electro division might not go into effect for at least ten years. A second article is titled, "Stick to Diesel, Pinnacle!" The article claims that although Pinnacle has proven itself within the diesel engine industry, they lack the knowledge and people necessary to perform well in the solar powered engine industry 2. You ask management for a tour of the Solar-Electro facilities. While touring the ware- house, you notice a section of solar-powered engines that do not look like the ones advertised on Pinnacle's Web site. You ask the warehouse manager when those items were first manufactured. He responds by telling you. Tm not sure. I've been here a year and they were here when I first arrived. Isherent risk Costral risk-Sales Control risk- Cash receipts 2 Control risk- Additional controls Substantive tests of Substantive tests of Cash receipts Substantive analytical Planned detection risk for tests of details of balances Planned audit evidence for tests of details of balances nning phase of the audit, you meet with Pinnacle's management team and perform other planning activities. You encounter the following situations that you During the pla believe may be relevant to the audit: 1. Your firm has an employee who reads and saves articles about issues that may affect key clients. You read an article in the file titled, "EPA Regulations Encouraging Solar- Powered Engines Postponed?" After reading the article, you realize that the regulations management is relying upon to increase sales of the Solar-Electro division might not go into effect for at least ten years. A second article is titled, "Stick to Diesel, Pinnacle!" The article claims that although Pinnacle has proven itself within the diesel engine industry, they lack the knowledge and people necessary to perform well in the solar powered engine industry 2. You ask management for a tour of the Solar-Electro facilities. While touring the ware- house, you notice a section of solar-powered engines that do not look like the ones advertised on Pinnacle's Web site. You ask the warehouse manager when those items were first manufactured. He responds by telling you. Tm not sure. I've been here a year and they were here when I first arrived
