• Your audit firm has just been engaged to replace the prior year auditor at Apple, an international consumer electronics manufacturing company headquartered in the Philadelphia area. Apple has a fiscal year-end of 3/31/19 and produces affordable electronics products that offer the same functionality as brand name products but at a lower price point. Apple has revenues of $50M annually is growing exponentially, with greater than 50% growth in each of the last 5 years. You have just been assigned as one of the staff auditors to the engagement. Your Manager asks you and the rest of the team to come up with an audit plan for sales and collections for the new engagement. Where do you start??

Engagement Team Exercise

• What information would you ask from the client?
• What other resources would you use to determine your approach to the audit?
• Design your audit plan what are the phases of the audit that you will perform?
• What risks are you concerned with for the sales and collections cycle?
• List some audit steps/tests you will perform for the sales and collections cycle to address these risks and the expected timing of when you will perform each step.