control risk, inherent risk, detection risk, RMM? Explain why? IR/CR yes or no? RMM and DR increase,decrease or no effect? Factor IR Factor CR Factor Why? Comments Impact on RMM Impact on DR 1 Apollo advanced $1.25 million to Larry Lancaster’s secretary. 2 Apollo does not have adequate documentation supporting customer returns of product. 3 Apollo has maintained a positive trend in net income over the past several years, and has a strategic emphasis on meeting profitability targets. 4 Apollo has not allowed your firm to speak with the predecessor auditor about their withdrawal after last year’s engagement. 5 Apollo installed a new computer system mid-year.
control risk, inherent risk, detection risk, RMM? Explain why? IR/CR yes or no? RMM and DR increase,decrease or no effect? Factor IR Factor CR Factor Why? Comments Impact on RMM Impact on DR 1 Apollo advanced $1.25 million to Larry Lancaster’s secretary. 2 Apollo does not have adequate documentation supporting customer returns of product. 3 Apollo has maintained a positive trend in net income over the past several years, and has a strategic emphasis on meeting profitability targets. 4 Apollo has not allowed your firm to speak with the predecessor auditor about their withdrawal after last year’s engagement. 5 Apollo installed a new computer system mid-year.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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control risk, inherent risk, detection risk, RMM? Explain why? IR/CR yes or no? RMM and DR increase,decrease or no effect?
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Factor | IR Factor | CR Factor | Why? Comments | Impact on RMM | Impact on DR |
| 1 | Apollo advanced $1.25 million to Larry Lancaster’s secretary. | |||||
| 2 | Apollo does not have adequate documentation supporting customer returns of product. | |||||
| 3 | Apollo has maintained a positive trend in net income over the past several years, and has a strategic emphasis on meeting profitability targets. | |||||
| 4 | Apollo has not allowed your firm to speak with the predecessor auditor about their withdrawal after last year’s engagement. | |||||
| 5 | Apollo installed a new computer system mid-year. |
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