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Case 21-8: Risk Assessment for Sensible Shoes Inc.
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CASE 21-8: RISK ASSESSMENT FOR SENSIBLE SHOES INC.
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Case 21-8: Risk Assessment for Sensible Shoes Inc.
Sensible Shoes Inc. is a footwear retailing company for designing and name branding
shoes and other related fashion-related accessories. The company has more than 4,000 operating
leases consisting of domestic and multinational stores and distribution centres. In this case, the
primary assumption is that Sensible Shoes Inc. has adopted the FASB’s new leasing standard,
Accounting Standards Codification 842, Leases, otherwise termed ASC 842. Risk assessment
procedures are essentially audit procedures within an organization carried out with the primary
purpose of enhancing the understanding of the auditors concerning the business activities of their
clients. Besides, risk assessment procedures help the audit...
