Mccaffery is the auditor of the Raleigh Corporation. Raleigh is a construction company that builds single-family homes and lowrise apartment buildings. Raleigh uses the percentage of completion method to recognize revenues on projects. Percentage of completion is based on discussion with project managers and the percentage of expenditures vs budget for each project. McCaffery has decided to use ADA as a risk analysis tool to evaluate revenue recognized on various projects.

Required I. identify the asaertion being audited. b. How would an auditor set an expectation regarding peroentageofcompletion for each project? c. What would be an acceptable deviation from the auditor's expectation? Explain the role of business acumen in evaluating an acceptable deviation from the auditor's expectation. d. What would be an unacceptable deviation from the auditor's expectation? Explain the role of busi- ness acumen in evaluating an unacceptable deviation from the auditor's expectation