This week, answer the following questions in a six- to eight-page Microsoft Word document based on your findings about the company. Be sure to include how the company became compliant with the Sarbanes-Oxley Act after the fraud was found.

A. Examine how the auditor and management may have uncovered the material weakness you found.

B. Distinguish who is responsible for identifying, disclosing, and improving the internal controls.

C. Comment on why the auditor and management have responsibility for disclosing the internal control weaknesses and to whom they would be liable if these were not properly disclosed. Be sure to relate some of the prior reading from the text.

D. Describe the audit risk model and each of its components

E. The following are four Situations involving the audit risk model as used by your company for planning audit evidence requirement since the audit of inventory. For each situation, calculate the planned detection risk.

1 2 3 4 Acceptable audit risk 1% 10% 10% 5% Inherent risk 100% 100% 50% 20% Control risk 100% 100% 40% 30% Planned detection risk ? ? ? ? In practice, auditors assess the audit risks (inherent, control, and planned detection) as high, medium, or low. For each of the four situations below, fill in the blanks (high, medium, and low) for planned detection risk and the amount of planned evidence you would plan to gather. Situation 1 2 3 4 Acceptable audit risk Low Low High High Inherent risk High Low Low Low Control risk High Low Medium Low Planned detection risk Planned evidence Consider a situation in which your companys retail store manager receives an annual bonus based on store sales. At the end of the Christmas holiday season, the store manager instructs managers and store personnel not to process $300,000 of store returns until the end of the companys fiscal year (which was a few weeks after the fiscal year). Based on the above situation, answer the following questions: Do the instructions given by the store manager to the subordinates reflect fraud? What is the internal control weakness here and why? What financial statements do you think were reported in error without these store returns and why? What could be done to avoid these types of errors and irregularities? Submit the document to W4: Assignment 3 Dropbox by Saturday, March 19, 2016.