- u-neslogaoeEirezlearnmm s REQUIRED You are a public accountant at Canman, Griffin. 8: Simpson LLP. On May 9. 2022. an audit partner from your rm has sent you an email summarizing the business of one of your clients Kramerica Corporation (Kramerica) as shown on page 2 of this document. Using this information, prepare a 10-minute presentation for your audit team. At the risk of repetition, creativity, professionalism. and humor is highly encouraged. Your pre-recorded video presentation should address the following: . At a high level. list at least two inherent risks and at least two control risks affecting Kramerlca as well as comment on the overall control environment of Kramerica. Evaluate at least two factors that impact the audit risk assessment for the current year. Indicate how these factors influence audit risk and draw a conclusion on overall audit risk. Identify five control weaknesses around Kramerica's accrued liabilities management process as well as specify the corresponding control objectives impacted. List the two primary audit assertions, your audit team should be concerned with regards to the Accounts Payable of Kramerica. Why? Design a substantive audit program with at least two audit procedures over the inventory management process. Design a test of controls audit program with at least three audit procedures around the overall acquisition and expenditure cycle. For each audit procedure in (5) and (6), El Write the control test along with the corresponding control objective El Indicate the financial statement assertion addressed by the control test El Describe the test of control by specifying the population used to select sample, extent of sample selection along with a rationale, relevant audit evidence gathering technique to be applied. and expected results. Professor: Amit M. Mehto (Spring 2022) o musll'. conestoga.desire2learn.com + 88 G manual.. A Manu. G Apollo.. Bioinfor.. BI How to. O QUAST:. S Exercis... Quick-S... 1 https://... CLCL e. Viewing. Home | 1.. D https://. $22 AC. Course. EMAIL FROM THE AUDIT PARTNER OF CARTMAN, GRIFFIN, & SIMPSON LLP Our firm has been reappointed auditors of Kramerica Corporation (Kramerica) for the year ending June 30, 2022. Last week, I met with Cosmo Kramer - President & Chief Executive Office of Kramerica. After, touring their head office and select other locations, I have prepared the following background information for you to review: Kramerica is in the agricultural industry and has five branches located across the Southwestern Ontario region. Kramerica's year-end is June 30. Kramerica is well established and has been profitable for many years. It is privately owned, and its inventory, receivables turnover, and debt-to-equity ratio are all comparable to industry averages Half of Kramerica's revenue is derived from sale of animal feed supplements and animal health products. This revenue s earned evenly throughout the year. The products are purchased from 20 regular suppliers, and another 20 suppliers are used on occasional basis. Sales are roughly equal at Kramerica's five locations, and each location normally keeps one month's inventory of these products on hand. The credit terms that the feed division's suppliers allow Kramerica are varied, but most suppliers require payment from Kramerica in 30 days, with some offering small discounts for early payments. The credit terms Kramerica offers its feed division customers are net 30, 2/10. The other half of Kramerica's revenue is from the sale of fertilizer and herbicides. This revenue is very seasonal, with most fertilizer sales occurring between mid-March and mid-May, and most herbicide sales in May and June. The fertilizer is delivered directly from the manufacturer to the customer by Kramerica trucks, so no inventory is kept on hand, except the occasional truckload of product in transit. By year-end (June 30), fertilizer sales are complete Kramerica purchases all fertilizer from one supplier. Any herbicides that remain sold at the end of the season cannot be kept for the next year because they expire, so any amounts on hand on June 15 are returned to the supplier. This is the normal industry procedure. The herbicides are purchased from three different suppliers. The credit terms for the fertilizer an herbicide divisions' customers are quite different from the credit terms for the feed divisions customers. Fertilizers and herbicide customers can get a substantial discount for placing and paying for orders early. However, many customers prefer to take advantage of another option that Kramerica offers, which is to pay interest on unpaid balances and then pay for their purchases in October, after the crops have been harvested. The company receives the same credit terms from its fertilizer and herbicide suppliers and pays them when cash is received from its own customers. The five branch managers and one company sales representative report to the general manager. The general manager reports to the president of the company who lives in Waterloo. Management team meetings, attended by the company's president, are held quarterly, and branch revenue and profits are compared in detail. The managers receive an annual bonus based on the net income before faxes of their branch, and the general manager and the Comptroller receive bonuses based on the company's overall net income. Professor: Amit M. Mehta (Spring 2022)conestoga.desire2learn.com + 88 G manual.. A Manu. G Apollo.. Bioinfor. BI How to.. O QUAST:. S Exercis.. Quick-S. https://... CLCL e.. Viewing. Home | I. D https://. $22 AC. Course. The Accounting System: At the company's head office, the full-time accounting staff consists of the following people: (a) Joan the controller; (b) Ernesto the full-time senior accountant; and (c) Wendy eight temporary accounting assistant who is hired from March to August to deal with the extra work required by seasonal sales of fertilizers and herbicides. Each of the five branches also has one office administrator, who handles mainly accounts receivable and general office duties. All purchases are made using a purchase order system. Branch managers order products directly from the approved suppliers using prenumbered purchase orders, one copy of which is sent to the head office when the order is placed. Ernesto files these purchase orders numerically until the supplier's invoice is received. When goods are received, the branches warehouse supervisor prepares a prenumbered receiving report, signs it, and sends it with any delivery documents to the head office, where Ernesto files it numerically. Once a month, Ernesto reviews the purchase orders and receiving report files, and follows up on any missing numbers. Supplies invoices are normally sent directly to the head office, where Ernesto matches them with the signed purchase order and receiving report, checking the supplier's calculations and initialing the invoice to note that he has done so. He then posts the payable invoice. The accounts payable system requires that the due date and any discounts available are entered when the invoice is posted. Once a week, Ernesto runs a check requisition listing, which is a list of payables due that week. Joan receives the listing and initials all that are to be paid. Ernesto then prepares the checks, attaching the suppliers' invoice, purchase order, and receiving report to each check. During the busy months, Wendy helps out with all of these tasks, mainly focusing on the fertilizer Ann herbicide accounts, but is available to help wherever asked too. The checks, together with the supporting documentation, are routed to Joan and the general manager for signing. Joan initials each supplier invoice before signing the check. The general manager double checks the purchase order for price and for branch manager approval, then initials the purchase order before signing the check. Each month, Joan prepares the bank reconciliation, which is reviewed an initial by the general manager. Accrued liabilities are recorded only at year end, and Ernesto and Joan have divided responsibility for these calculations and entries. Professor: Amit M. Mehta (Spring 2022)conestoga.desire2learn.com + 188 G manual.. A Manu. G Apollo... Bioinfor.. BI How to. O QUAST:. S Exercis... Quick-S.. 1 https://... CLCL e. Viewing. Home | 1.. D https://. $22 AC. Course. CaseWare Deliverable 01 (Due by Jun 10, 2022) Types of Control Objectives General Categories of Misstatements Control Objectives Invalid transactions are recorded Validity = Valid transactions are omitted Completeness Unauthorized transactions are executed Authorization = Transaction amounts are inaccurate Accuracy Transactions are classified incorrectly Classification Transactions are recorded in incorrect period Proper Period Evidence Gathering Techniques Audit Technique Types of Audit Evidence Inspection . Documents prepared by independent parties . Documents prepared by the auditee . Physical inspection of tangible assets Observation . Auditor's observations Confirmation . Statements by independent parties Recalculation / Reperformance . Auditor's calculations or performance Analysis . Data interrelationships Inquiry . Statements by auditee personnel Management Assertions Management Assertion Brief Description Existence Establish evidence that assets, liabilities, and equities actually exist; revenue (Occurrence) and expense transactions actually occurred, and that there are cut-off considerations to existence Completeness Establish with evidence that all transactions and accounts that should be presented in the financial reports are actually included. Ownership Establish with evidence that amounts reported as assets of the company (Rights & Obligations) represent property rights and the amounts reported as liabilities represent obligations Valuation Determine whether proper values have been assigned to assets, liabilities, (Measurement & Allocation) quities, revenues, and expenses. Presentation Determine whether the accounting principles are properly selected and Classification & Disclosure) applied and whether disclosures are adequate. Professor: Amit M. Mehta (Spring 2022)