ACCT1059 Auditing 1: Analyzing Sheridan AV Financial Statements, 2019

This assignment analyzes the Sheridan AV case study, focusing on the identification and assessment of inherent and control risks within the company's financial statements. The analysis begins with an evaluation of inherent risks at both the industry and entity levels, specifically addressing the rapid technological changes and high competition within the electronics industry, which affects inventory obsolescence and sales. The assessment also examines entity-level risks such as the first-time external audit, the pressure on employees preparing the financial statements, and the company's rapid revenue growth. The assignment then proceeds to assess control risks for various assertions, including sales occurrences, completeness, and accuracy, as well as the existence of accounts receivables. The analysis identifies potential risks of fictitious sales, recording errors, and omissions, and evaluates the effectiveness of existing controls in mitigating these risks. The assignment provides detailed working papers (A1 and A2) to document the assessment process and conclusions. The analysis is conducted from the perspective of an audit team, working for Alex Gold Financial Services, tasked with analyzing and pinpointing facets of the company that require auditing attention.