Part 4: Use the information below to perform analytical procedures on Waren's gross sales revenue This includes ALL REQUIRED STEPS FOR SUBSTANTIVE ANALYTICAL PROCEDURES described in class. While there is some flexibility in how you can develop expectations for sales revenue, you must perform two separate analytical procedures: one using either ratio or trend analysis, and the second using a reasonableness test. Make sure to highlight any and all discrepancies you feel are material and warrant further investigation (if there are any such discrepancies, discuss in detail how you would investigate material discrepancies appropriately). Regardless of the existence of discrepancies, identify and describe two additional substantive tests of detail to perform over sales revenue. Use MS Excel to complete your analyses. In all cases, make sure you clearly show how you developed your expectations. Also, make sure you clearly and adequately document your investigation. Additional information that might be useful includes the following: 1. The health of the economy has not changed significantly during the last four years. 2. Waren sold 19,350 items this year (net of returns). They sold 19,610 items last year (net of returns). 3. Jim Adams worked 2,100 hours of regular time this year and 194 hours of overtime. Nancy Ford worked 383 hours of regular time this year and 6 hours of overtime. 4. The average effective tax rate in the industry is 21%. 5. The average market interest rate on CDs during the year was 5%. Part 4: Use the information below to perform analytical procedures on Waren's gross sales revenue This includes ALL REQUIRED STEPS FOR SUBSTANTIVE ANALYTICAL PROCEDURES described in class. While there is some flexibility in how you can develop expectations for sales revenue, you must perform two separate analytical procedures: one using either ratio or trend analysis, and the second using a reasonableness test. Make sure to highlight any and all discrepancies you feel are material and warrant further investigation (if there are any such discrepancies, discuss in detail how you would investigate material discrepancies appropriately). Regardless of the existence of discrepancies, identify and describe two additional substantive tests of detail to perform over sales revenue. Use MS Excel to complete your analyses. In all cases, make sure you clearly show how you developed your expectations. Also, make sure you clearly and adequately document your investigation. Additional information that might be useful includes the following: 1. The health of the economy has not changed significantly during the last four years. 2. Waren sold 19,350 items this year (net of returns). They sold 19,610 items last year (net of returns). 3. Jim Adams worked 2,100 hours of regular time this year and 194 hours of overtime. Nancy Ford worked 383 hours of regular time this year and 6 hours of overtime. 4. The average effective tax rate in the industry is 21%. 5. The average market interest rate on CDs during the year was 5%
