Milestone 2

User Generated

ybyb82

Business Finance

Description

You will submit a draft of risk factors as identified for all of the major business transactions conducted by WALMART. Analyze the income statement, balance sheet, and cash and revenue for any potential risk factors and compliance issues with Generally Accepted Accounting Principles (GAAP) or International Financial Recording Standards (IFRS). Based on your analysis of risk, devise a statistical and judgmental sampling program for the audit universe. Recommend the most preferable audit testing procedure based on the audit universe items sampled. Prompt: Analyze potential risk factors in all the major business transactions using the information you have gathered in previous milestones.

Specifically, the following critical elements must be addressed:

A. Analyze the income statement for any potential risk factors and compliance issues with Generally Accepted Accounting Principles (GAAP) or International Financial Recording Standards (IFRS).

B. Analyze the risk factors and compliance issues with GAAP or IFRS on the balance sheet.

C. Using the internal control, analyze the cash and revenue for potential risk factors.

1. What risks need to be documented?

2. How does this information compare to the company or industry averages, or the company’s past performance?

D. Explain the audit universe and how you identified it. E. Based on your analysis of risk, devise a sampling program for the audit universe.

F. Choose the most preferable audit testing procedures that could be used in the field, based on the audit universe items sampled in this situation. Rubric Guidelines for Submission:

Paper must be submitted as a 3–4-page Microsoft Word document with double spacing, 12-point Times New Roman font, one

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Explanation & Answer

Attached.

Running Head: RISK ANALYSIS

1

Risk Analysis
Institution Affiliation
Date:

RISK ANALYSIS

2

The majority of the companies in the business environment follow the rules and
regulations as well as accounting principles set by GAAP and IFRS. Walmart is an example of
the numerous organizations that follow the accounting principles as it prepares its financial
statements including the income statement and balance sheet. Although the GAAP and IFRS
provide accounting principles that are supposed to guide businesses such as Walmart create
reliable financial statements they expose the financial reports to various risks. Some of the risk
factors associated with the accounting principles include assumptions in financial statements,
uncertainties in financial estimates and projections.
GAAP and IFRS expect companies like Walmart to comply with eth set accounting
principles. For instance, a company should provide the original cost of an asset while preparing
the financial statements. Also, the accountants in business are expected to practice consistency as
they enter data into the financial statements. In the income statement, the company is expected to
enter the original cost of various a...


Anonymous
I was having a hard time with this subject, and this was a great help.

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