Keystone Computers
ACC 410
Auditing
Keystone Computer’s & Networks, Inc.
Jacob Burdick
January 16, 2012
In preparing for the audit all aspects of a company need to be reviewed. For the preparation of the audit several things must be considered as define in the following pages.
The primary focus of the audit is to determine the economic status as well as determine the operational performance of a company.
I. Analysis of Audit Strategy
A. Objectives of the Engagement 1. To describe the services that are to be rendered to the client. a. The objectives are to audit KCN’s financial statements for the year ended 12/31/x5. b. Issue a letter on compliance with covenants of the client’s letter of credit agreement. B. Business and Industry Conditions 1. To describe the nature of KCN’s business and industry. a. KCN sells and services micro-computers, networking hardware and software to business customers. b. The industry is sensitive to economic conditions and very competitive, with KCN competing with companies much larger than itself. c. KCN’s long-term success depends on its ability to attract and retain qualified information technology personnel. d. The annual growth in spending for information technology products and services is expected to be 6% per year for the next three years. C. Planning Meetings 1. To indicate meetings held with client and with CPA engagement team. a. At this point, one meeting has been held with client personnel and one with the engagement team. D. Ownership And Management 1. To describe the owners and management of the company. a. KCN is privately owned by Terry Keystone, Mark Keystone, John Keystone, Keith Young, and Rita Young. b. Terry and Mark Keystone participate in Management. E. Objectives, Strategies, and Business Risks 1. To describe KCN’s business
Auditing
Keystone Computer’s & Networks, Inc.
Jacob Burdick
January 16, 2012
In preparing for the audit all aspects of a company need to be reviewed. For the preparation of the audit several things must be considered as define in the following pages.
The primary focus of the audit is to determine the economic status as well as determine the operational performance of a company.
I. Analysis of Audit Strategy
A. Objectives of the Engagement 1. To describe the services that are to be rendered to the client. a. The objectives are to audit KCN’s financial statements for the year ended 12/31/x5. b. Issue a letter on compliance with covenants of the client’s letter of credit agreement. B. Business and Industry Conditions 1. To describe the nature of KCN’s business and industry. a. KCN sells and services micro-computers, networking hardware and software to business customers. b. The industry is sensitive to economic conditions and very competitive, with KCN competing with companies much larger than itself. c. KCN’s long-term success depends on its ability to attract and retain qualified information technology personnel. d. The annual growth in spending for information technology products and services is expected to be 6% per year for the next three years. C. Planning Meetings 1. To indicate meetings held with client and with CPA engagement team. a. At this point, one meeting has been held with client personnel and one with the engagement team. D. Ownership And Management 1. To describe the owners and management of the company. a. KCN is privately owned by Terry Keystone, Mark Keystone, John Keystone, Keith Young, and Rita Young. b. Terry and Mark Keystone participate in Management. E. Objectives, Strategies, and Business Risks 1. To describe KCN’s business