PART 2 THE COSO FRAMEWORK CASE (22 MINUTES - 29 MARKS) Wellness is nutrition supplement provider and is planning a public offering in the next two years. The CEO and CFO are close friends since high school and their spouses and children have become friends too. Wellness has an independent audit committee of board of directors that oversees the external and internal auditors. The audit committee also sets management compensation based on financial results. The company is planning an expansion by having a physical store besides the currently online business. While the audit of financial statements has not been required in the past, venture capitalists have agreed to pump in cash to support the expansion, if audited financial position and results of operation look reasonable. To show strong financial results, the CFO who is a Certified Public Accountant wants to help the company get the venture capital cash by showing strong online revenue records. As such, the CFO asked the accountant to book an entry into the shipping system now and block an invoice to be sent to a customer for now; he explained that the customer will place the order soon, and that the CEO is aware and in approval of this agreement and its impact on the financial statements. There has heen little oversight from the internal audit department because the chief internal auditor quit suddenly a few months ago and no one has replaced her yet. Please use the above information above to identify components of the COSO framework (20 minutes, 25 marks) b. Based on the case information and your answer to a above, what is the likely audit strategy that is more likely to be used in the audit of Wellness company. Please explain. (3 minutes, 4 marks) PART 3 FINANCIAL STATEMENTS ASSERTIONS CASE (15 MINUTES - 20 MARKS) In the audit of accounts receivable and sales for fiscal year ended December 31, 2018. and based on your risk assessment, your audit program specifies the following andit procedures for each audit procedure, indicate which financial statement assertion(s) you are testing. 2. Examine a sample of shipping document to determine whether each one has a sales invoice attached. all customer balances in the accounts receivable subsidiary ledger and agree the amount to the general ledger. are of the client whether any accounts receivable balances have been pledged as Bilateral on long-term debt and determine whether all required information is included in the footnote description for long-term debt. Por a sample of sales invoices selected from the billing records, trace each invoice to a transaction recorded in the sales journal. e. Discuss with credit department personnel the likelihood of collection of all accounts as of December 31, 2018, with a balance greater than $100,000 and greater than 90 days old as of year-end. f. For a sample of customer accounts receivable balances at December 31, 2018, examine subsequent cash receipts in January 2019 to determine whether the customer paid the balance due. 2. Determine whether all risks related to accounts receivable are adequately disclosed. Examine corporate minutes to the company entered into any related party transactions Read the title documents for information about ownership of fixed assets