Q1: Perform analytical procedures to help you identify relatively risky areas that indicate the need for further attention during the audit, if any.

Q2: Focus specifically on each of the following balance-related management assertions for the inventory account: existence, completeness, valuation, and rights and obligations. Link any risks you have identified for this account in question 1 to the related management assertion. Briefly explain identified risks for the inventory account that require further attention, if any

compute the following:

• Average Days Sales in Receivables.
• Percentage Change in Cost of Goods Sold -
• Percentage Change in Inventories -
• Inventory as a Percent of Sales.
• Percentage Change in Accounts Payable.
• 

Laramie is a medium-sized company that buys copper rod and plastic materials to manufacture insulated copper wiring. Laramie operates out of a single building complex totaling 500,000 square feet, which includes office space (3%), production area (57%), shipping and receiving (15%), and finished goods and raw materials inventory warehousing (25\%). Laramie supplies insulated copper wiring in the northeastern part of the United States. The company has a good reputation for quality products and has had a good working relationship with its outside accountants over the past 10 years. You have been assigned responsibility for auditing Laramie's inventories. You are in the planning stages of the audit, and you are preparing to conduct some analytical procedures to identify areas that may represent heightened risk and that thus may require further attention. Your staff assistant assembled information relating to inventories and other items, including a brief description of Laramie's production and inventory areas. Because your assistant is new, he is not very good at weeding out irrelevant information, so you may not need to use every piece of information he has provided. The information is listed below. SalesCostofSalesFinishedGoodsInventory(Approx.250millionft.)CopperRodInventory.(Approx.5.5millionIbs.)PlasticsInventory(Approx.1millionIbs.)AccountsPayable(forInv.purchases)DaysPurchasesinA.PDaysSalesinReceivablesMarketPriceofInsulatedWire(perfoot)MarketPriceofCopperRod(perIb.)MarketPriceofPlastics(perIb.)2018$8,450,000$6,242,500$1,654,500$2,625,000$224,500$450,00043.6days56.3days$0.008$0.480$0.1202017$8,150,000$6,080,000$1,175,500$1,650,000$182,000$425,00044.2days48.4days$0.009$0.480$0.190