Task 1 for the Audit Case Review assignment is to complete the attached worksheet. The task is to prepare the analytical review ratios for the Keystone Computers \& Networks. See Problem 6C4 in the textbook on jage 276 for further instructions. Use the documents found in Appendix 6C on pages 268-275 for reference. Once you complete the worksheet, upload the file to this page. (You can use the video below for further instructions on calculating the ratios.) Worksheet (NOTE: If the following link does not work, use the link in the module.) Task 1 Worksheet-4.docx or Task 1 Worksheet PDF.pdf To help in case the link does not work, I pasted it below. Instructions (Problem 6(4) For the first task of the Audit Case Review, you will recalculate the analytical review ratios for the Keystone Computers \& Networks. The working paper on page 272 shows the ratios prepared by the auditors. Use this working paper as a reference to perform the following procedures: 5. Use the worksheet on page 2 to recalculate the ratios for 12/31/5. Refer to the Working Trial Balance on pages 270-271 to calculate the ratios. Show your work on the worksheet and insert the results below: Keystone Computers \& Networks, Inc. Analytical Review Ratios For the Period Ended December 31.205 Current Ratio 12314512.31/4 270-271 to calculate the ratios. Show your work or the worksheet and insert the results below: Keystone Computers \& Networks, Ind. Analytical Review Ratios for the Period Ended December 31,205 1. After completing part (a), review the rafios and identify below the financial statement accounts that should be investigated because the related ratios are not comparable to prior-year ratios, industry averages, or your knowledge of the company. Instructions (Problem 6C-4) For the first task of the Audit Case Review, you will recalculate the analytical review ratios for the Keystone Computers \& Networks. The working paper on page 272 shows the ratios prepared by the auditors. Use this working paper as a reference to perform the following procedures: a. Use the worksheet on page 2 to recalculate the ratios for 12/31 X5. Refer to the Working Trial Balance on pages 270-271 to calculate the ratios. Show your work on the worksheet and insert the results below: Keystone Computers \&t Networks, Inc Analytical Reniew Ratios For the Period Ended December 31, 20X5 b. After completing part (a), review the ratios and identify below the financial statement accounts that should be investigated because the related ratios are not comparable to prior-year ratios, industry averages, or your knowledge of the company. c. For each account identified in part (b), List potential reasons for the unexpected account balances and related ratios. Audit Case Review: Task 1 Worksheet Case 6C-4 Details of Computations of 20X5 ratios 2 KEYSTONE COMPUTERS \& NETWORKS, INC. OVERALL AUDIT STRATEGY OBJECTIVES OF THE ENGAGEMENT Audit of the financial statements of Keystone Computers \& Networks Inc. (KCN) for the year ended December 31, 20X5. Also, the company's debt agreement with Western Financial Services requires the company to furnish the lender a report by our firm on KCN's compliance with various restrictive debt covenants. BUSINESS AND INDUSTRY CONDITIONS KCN sells and installs computers and networking hardware and software to business customers and provides other information technology consulting services. KCN also has begun developing its own computer networking software to be sold as a product to its customers. The company's primary competitive strategy is to maintain a high level of technical expertise and a broad range of services. KCN's long-term success is contingent on its ability to attract and retain qualified information technology personnel. The market for such individuals is very competitive. However, the company has a competitive advantage because of its desirable geographic location (Phoenix), which has a large number of colleges with technology programs. The market for computers and related products is extremely competitive. KCN competes with large retailers of computers, such as Dell, Hewlett-Packard, and Apple. The company also competes with other value-added resellers who provide computers and software products and consulting services directly to customers. To effectively compete, the KEYSTONE COMPUTERS \& NETWORKS INC. Prepared by Working Trial Balance Reviewed by For the Period Ended December 31, 205 Page 2 KEYSTONE COMPUTERS \& NETWORKS INC. Prepared by WL Working Trial Balance Reviewed by For the Period Ended December 31, 20X5 Page 1 Task 1 for the Audit Case Review assignment is to complete the attached worksheet. The task is to prepare the analytical review ratios for the Keystone Computers \& Networks. See Problem 6C4 in the textbook on jage 276 for further instructions. Use the documents found in Appendix 6C on pages 268-275 for reference. Once you complete the worksheet, upload the file to this page. (You can use the video below for further instructions on calculating the ratios.) Worksheet (NOTE: If the following link does not work, use the link in the module.) Task 1 Worksheet-4.docx or Task 1 Worksheet PDF.pdf To help in case the link does not work, I pasted it below. Instructions (Problem 6(4) For the first task of the Audit Case Review, you will recalculate the analytical review ratios for the Keystone Computers \& Networks. The working paper on page 272 shows the ratios prepared by the auditors. Use this working paper as a reference to perform the following procedures: 5. Use the worksheet on page 2 to recalculate the ratios for 12/31/5. Refer to the Working Trial Balance on pages 270-271 to calculate the ratios. Show your work on the worksheet and insert the results below: Keystone Computers \& Networks, Inc. Analytical Review Ratios For the Period Ended December 31.205 Current Ratio 12314512.31/4 270-271 to calculate the ratios. Show your work or the worksheet and insert the results below: Keystone Computers \& Networks, Ind. Analytical Review Ratios for the Period Ended December 31,205 1. After completing part (a), review the rafios and identify below the financial statement accounts that should be investigated because the related ratios are not comparable to prior-year ratios, industry averages, or your knowledge of the company. Instructions (Problem 6C-4) For the first task of the Audit Case Review, you will recalculate the analytical review ratios for the Keystone Computers \& Networks. The working paper on page 272 shows the ratios prepared by the auditors. Use this working paper as a reference to perform the following procedures: a. Use the worksheet on page 2 to recalculate the ratios for 12/31 X5. Refer to the Working Trial Balance on pages 270-271 to calculate the ratios. Show your work on the worksheet and insert the results below: Keystone Computers \&t Networks, Inc Analytical Reniew Ratios For the Period Ended December 31, 20X5 b. After completing part (a), review the ratios and identify below the financial statement accounts that should be investigated because the related ratios are not comparable to prior-year ratios, industry averages, or your knowledge of the company. c. For each account identified in part (b), List potential reasons for the unexpected account balances and related ratios. Audit Case Review: Task 1 Worksheet Case 6C-4 Details of Computations of 20X5 ratios 2 KEYSTONE COMPUTERS \& NETWORKS, INC. OVERALL AUDIT STRATEGY OBJECTIVES OF THE ENGAGEMENT Audit of the financial statements of Keystone Computers \& Networks Inc. (KCN) for the year ended December 31, 20X5. Also, the company's debt agreement with Western Financial Services requires the company to furnish the lender a report by our firm on KCN's compliance with various restrictive debt covenants. BUSINESS AND INDUSTRY CONDITIONS KCN sells and installs computers and networking hardware and software to business customers and provides other information technology consulting services. KCN also has begun developing its own computer networking software to be sold as a product to its customers. The company's primary competitive strategy is to maintain a high level of technical expertise and a broad range of services. KCN's long-term success is contingent on its ability to attract and retain qualified information technology personnel. The market for such individuals is very competitive. However, the company has a competitive advantage because of its desirable geographic location (Phoenix), which has a large number of colleges with technology programs. The market for computers and related products is extremely competitive. KCN competes with large retailers of computers, such as Dell, Hewlett-Packard, and Apple. The company also competes with other value-added resellers who provide computers and software products and consulting services directly to customers. To effectively compete, the KEYSTONE COMPUTERS \& NETWORKS INC. Prepared by Working Trial Balance Reviewed by For the Period Ended December 31, 205 Page 2 KEYSTONE COMPUTERS \& NETWORKS INC. Prepared by WL Working Trial Balance Reviewed by For the Period Ended December 31, 20X5 Page 1