REQUIREMENTS
Please read the case below and prepare the audit planning memorandum for the La Belle Media Inc. 2019 audit engagement based on the information provided in the case.
Please ensure the following is addressed in the audit planning memo:
• ACCOUNTING ISSUES : Analyze the following issues:
1. Revenue recognition issue with the Women’s Television Inc. contract.
2. Collectability of Dark Horse Designs accounts receivable.
3. Revenue recognition issue with non-refundable fees for Belle Dame.
4. Impact of the uptake of the “pay later” option on the financial statements.
5. Adequacy of the Allowance for Doubtful Accounts (AFDA) as at December 31,2019.
• AUDIT PROCEDURES: Propose 2 specific procedures to address EACH of the accounting issues noted above. Please note what account(s) and audit objective(s) the procedure relates to. See Appendix A for a template you may wish to complete.
• ANALYTICAL PRCOCEDURES: Perform analytical procedures (i.e. horizontal analysis, vertical analysis, relevant ratios etc.) on the balance sheet and income statement provided and note any significant findings and the impact on the audit plan.
• RISK: What risks related to the 2019 audit of La Belle Media’s financial statements do you identify? Why are they risks? What is your overall assessment of the risk of material misstatement for the 2019 audit of La Belle Media?
• APPROACH: What audit approach do you recommend and why?
• MATERIALITY: Assess overall planning materiality and performance materiality for this audit and support any judgements made in determining materiality.
• OTHER ISSUES - Note any other issues that should be addressed as part of the audit.
