The objective of this project is to provide you with an opportunity to assess the business risks and perform analytical procedures for a Huawei company. The project focuses on the following categories of information related the understanding the entity and its environment:

Management

Attached at the end of this document is a questionnaire (PDF template) that is to be used for assessing and documenting your assigned companys business risks. In completing the questionnaire, you need to attempt to answer each question and then determine the possible effect(s) on the audit.

Information needed to identify the business risks can be obtained from the companys annual report, FORM 10K, and proxy materials. Typically, these documents can be obtained from the companys website. The companys website also contains information on the audit committee (e.g., charter), internal audit function, and corporate ethics (e.g., conflict of interest policies). You should also consider obtaining a financial analysts report on the assigned company. If you cannot find a free analysts report, do not pay for one.

There may be some questions that you will not be able to answer. If you cannot answer a question, respond information not available.

Client Name: Entity and Environment Category: Management Year ended:		Completed by:
		Reviewed by:
Business Risk Factor	Response	Possible Effect(s) on the Audit
Do one or a few individuals dominate management and operating decisions?
Does management demonstrate the appropriate tone at the top, including explicit moral guidance about what is right or wrong? More specifically, has a code of conduct been established that includes appropriate entity policies regarding acceptable business practices and conflicts of interest? Are these policies adequately communicated to employees?
Does management adequately monitored business risks?
Does management encourage that everyday dealings with customers, suppliers, employees, and other parties be based on honesty and fairness?
Has management established and maintained effective internal control over financial reporting?
Is there a motivation for management to engage in fraudulent financial reporting? (Refer to Tables 4-4 to 4-6 in the textbook for a list of specific indicators that might indicate fraudulent reporting.)
Has management adopted sound accounting principles?
Does management adequately consult with its auditor on accounting issues?
Is management willing to adjust the financial statements for misstatements that approach a material amount?
Is there high turnover of senior management, legal counsel, or board members?
Is there a known history of securities law violations or claims against the entity or its senior management alleging fraud or violations of securities laws?