You are various audit teams for the audit of a privately held company with several manufacturing subsidiary companies. Each team has been assigned a different subsidiary company to develop an audit program for either the Revenue cycle or the Expenditure cycle. The audit manager for the audit has previously prepared assessments of IR and CR for each subsidiary.

Your task is to prepare, an audit program based on the manager's assessments and additional information provide and/or assumed. Be sure to document your assumptions. One criteria your team will be judged on is what approach, reliance or substantive you chose to use.

The parent company is a holding company owned by brothers and sisters who inherited equal shares of stock when their father, John, and mother, Ruth, died. Each is assigned as Chief Executive Officer of one of the subsidiary companies

complete this please

Overall Risk Assmt CEO characteristics Company Characteristics Title Name Youngest Son -- Brad Considered "favored" by siblings. Easy going personality Prides himself on hiring high quality management team. Expects integrity and ethical values from team and leads by example. Parker Pool Makes: Pool accessories from play toys to filter equipment and chemicals. Expenditure - RMM risk LOW Sales manager A/R clerk Treasurer A/P clerk Purchasing Agent Operations manager Nate Chad Haley Nicole Ashley James Completed by & Date Procedures WP ref Existence or Occurrence: Rights and Obligations 1. Prepare, or obtain from client, summary schedules indicating beginning balances, additions, retirements, and ending balances for each property, plant, and equipment account and its related accumulated depreciation account. 2. For additions to property, plant and equipment: (a) Vouch additions to invoices and other supporting documents. (b) Determine that all additions have proper approval. (c) If possible, inspect all fixed asset additions. (d) Trace authorization for additions to minutes from Board of Directors meetings. (e) Review the cost buildup for all additions to insure that all elements of cost (discount, freight, installation, rework, etc.) are properly included. 3. For retirements of property, plant, and equipment: (a) Vouch retirements to retirement work orders and other appropriate documentation, computing book value and determining gain or loss. (b) Trace salvage proceeds to cash receipts journal. Completeness 4. Analyze and vouch repairs and maintenance to locate possible expenditures which should be capitalized (Q-3). 5. Determine whether all assets have been properly capitalized, including those associated with capital lease obligations. 6. For retirements of property, plant, and equipment: (a) Trace gain or loss to appropriate income statement accounts. Overall Risk Assmt CEO characteristics Company Characteristics Title Name Youngest Son -- Brad Considered "favored" by siblings. Easy going personality Prides himself on hiring high quality management team. Expects integrity and ethical values from team and leads by example. Parker Pool Makes: Pool accessories from play toys to filter equipment and chemicals. Expenditure - RMM risk LOW Sales manager A/R clerk Treasurer A/P clerk Purchasing Agent Operations manager Nate Chad Haley Nicole Ashley James Completed by & Date Procedures WP ref Existence or Occurrence: Rights and Obligations 1. Prepare, or obtain from client, summary schedules indicating beginning balances, additions, retirements, and ending balances for each property, plant, and equipment account and its related accumulated depreciation account. 2. For additions to property, plant and equipment: (a) Vouch additions to invoices and other supporting documents. (b) Determine that all additions have proper approval. (c) If possible, inspect all fixed asset additions. (d) Trace authorization for additions to minutes from Board of Directors meetings. (e) Review the cost buildup for all additions to insure that all elements of cost (discount, freight, installation, rework, etc.) are properly included. 3. For retirements of property, plant, and equipment: (a) Vouch retirements to retirement work orders and other appropriate documentation, computing book value and determining gain or loss. (b) Trace salvage proceeds to cash receipts journal. Completeness 4. Analyze and vouch repairs and maintenance to locate possible expenditures which should be capitalized (Q-3). 5. Determine whether all assets have been properly capitalized, including those associated with capital lease obligations. 6. For retirements of property, plant, and equipment: (a) Trace gain or loss to appropriate income statement accounts