For this discussion board you should answer the following questions. You can find some of the answers to the questions below in the company 10-k, on the company’s website, or you may have to do additional research to find some of the answers.
The Boeing Company –
You should be able to click on the PDF file link provided here The Boeing Company 10-K report for the period ending 12.31.18.pdf Download The Boeing Company 10-K report for the period ending 12.31.18.pdf to access this company’s 10-K report.
The Hershey Company –
You should be able to click on the PDF file link provided here The Hershey Company 10-K report for the period ending 12.31.18.pdf Download The Hershey Company 10-K report for the period ending 12.31.18.pdf to access this company’s 10-K report.
Tesla Motors Inc. –
You should be able to click on the PDF file link provided here Tesla Motors Inc 10-K report for the period ending 12.31.18.pdf Download Tesla Motors Inc 10-K report for the period ending 12.31.18.pdf to access this company’s 10-K report.
The questions listed below will continue the process an auditor must take when preparing for an audit. Not only do you have to understand the company itself but the industry in which they operate so you can understand all of the risks for the company and formulate the audit procedures accordingly.
One of the first few steps of the audit process is for the audit team to come together and hold a fraud brainstorming session where every member of the team will come up with any area of potential fraud within the company they are preparing to audit.
In order to do this and completely participate in the brainstorming they have to understand the company, industry and any economic, social, regulatory, or legal issues the industry faces.
Each student should answer the following questions for the company they choose:
What are the key economic factors about the industry in which the company operates?
You can use this link as a starting point for your research on this question:
http://www.marketingtutor.net/economic-factors-affect-business-environment/ (Links to an external site.).
Where is the company in its life cycle? You can use this website to read about business life cycles:
https://smallbusiness.yahoo.com/advisor/stages-business-lifecycle-challenges-100036770.html. (Links to an external site.) How might this affect audit risk? Are their different pressures (internal or external) that may affect the audit risk at different stages in a company’s life cycle?
What are the five or six most important factors for success in this business?
You should be thinking outside the box a little here. Think about all kinds of things that make a business successful from it’s people, R&D, Patents, financial, international issues, and the legal and regulatory environments they all operate in.
Describe four or five significant business risks related to the client’s business and industry and why you think they are a significant risk that may affect how you plan and perform the audit.
You can also find more information on identifying business risk at the following link:
http://www.investopedia.com/articles/financial-theory/09/risk-management-business.asp (Links to an external site.))
Again don’t forget to think outside the box a little bit here as well. Are any of the businesses unionized?
Are they in involved lawsuits or patent infringement issues? Are there issues with regulatory agencies such as the FDA or local health authorities?
These are all international businesses. Are there any extra risks involved because they are international?
Do any of the companies have warranty issues or patents that are expiring soon?
For those of you who have Tesla as your company do you think Federal and State tax credits for purchasing electric automobiles have a significant impact on the business, audit, or industry risk? Why or Why not?
What notable accounting considerations are there for companies in this industry?
What legal or regulatory matters are of concern for your specific company or companies within their industry.
What social matters are of concern?
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