Research professional standards and list the requirements related to developing an expectation and conducting analytical procedures when those procedures are intended to provide substantive evidence. Review the sleeping room revenue work paper template provided in Appendix A. Would use of the template help the audit firm comply with professional standards? Explain your answer.

2. Use the room revenue work paper template provided in Appendix A along with the external hotel and industry information obtained by the staff person to develop an expectation for Majestics 2011 sleeping room revenues. a. Are Majestics reported sleeping room revenues within your reasonableness range?

b. If reported sleeping room revenues were inside your reasonableness range would your analytical procedure provide sufficient evidence for you to conclude Majestics 2011 sleeping room revenues are fairly reported?

c. If reported sleeping room revenues were outside your reasonableness range, what could explain the difference?

3. Review the internal client records provided in Appendix B. Use the room revenue work paper template provided in Appendix A along with the internal client records provided in Appendix B to develop an expectation for Majestics 2011 sleeping room revenues.

a. Are Majestics reported sleeping room revenues within your reasonableness range?

b. If reported sleeping room revenues were inside your reasonableness range would your analytical procedure provide sufficient evidence for you to conclude Majestics 2011 sleeping room revenues are fairly reported?

c. If reported sleeping room revenues were outside your reasonableness range, what could explain the difference?

d. What other qualitative considerations would need to be considered before concluding whether additional testing would be warranted?

e. What is the advantage of developing an expectation using the disaggregated internal client data in Appendix B to the aggregated external industry data obtained by the staff person?

f. What is the disadvantage of developing an expectation using the disaggregated internal client data in Appendix B to the aggregated external industry data obtained by the staff person?

g. What other testing, if any, would need to be performed related to the substantive analytical procedure before a conclusion could be made?