Producing a final report is the last step in the audit process that also ends the engagement between the audit firm and the business entity. In each audit, unusual situations will arise, some more important than others.

Take a look at this case, the Kendallville Bank Case is typical; the case reveals some strange occurrences. Based on the information in the case document provided, and the concepts learned this term, complete the case study.

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Begin with a 1-page synopsis of the key points of the case. Using the data provided for the competitor that is the target for an acquisition, conduct a sector analysis to determine the position of each bank relative to the other. Next, prepare a business memo to explain the planning process for a full audit. Include a material misstatement risk assessment (how will risks be assessed). Be sure to explain why the planning process and materiality are so important. Use information from the case to support your determinations in the planning process.

When the audit is completed, every auditor is required to express or disclaim an opinion. The final page of your report will be the audit opinion based on the first two quarters of the current year and previous years. The opinion should include rationale and evidence. Consider Davis's actions regarding the contents of the report given to the board (specifically compared to the assertions, tests, and findings during the audit).

Finally, include an objective statement regarding the outlook for the bank as an ongoing concern (the audit opinion).