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    WP AR RDelaRueda

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    minmenm
    This document provides a risk assessment for retaining EarthWear Clothiers as an audit client. It notes some minor past legal issues with the vice president of finance related to gambling. It also indicates management turnover in key accounting roles and some uncertainty about the skills of the new controller. Based on these risk factors, the overall risk of continuing the client engagement is assessed as medium. The recommendation is to retain EarthWear Clothiers as a client for now.

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    WP AR RDelaRueda

    Uploaded by

    minmenm
    236 views1 page
    This document provides a risk assessment for retaining EarthWear Clothiers as an audit client. It notes some minor past legal issues with the vice president of finance related to gambling. It also indicates management turnover in key accounting roles and some uncertainty about the skills of the new controller. Based on these risk factors, the overall risk of continuing the client engagement is assessed as medium. The recommendation is to retain EarthWear Clothiers as a client for now.

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    This document provides a risk assessment for retaining EarthWear Clothiers as an audit client. It notes some minor past legal issues with the vice president of finance related to gambling. It also indicates management turnover in key accounting roles and some uncertainty about the skills of the new controller. Based on these risk factors, the overall risk of continuing the client engagement is assessed as medium. The recommendation is to retain EarthWear Clothiers as a client for now.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    236 views1 page

    WP AR RDelaRueda

    Uploaded by

    minmenm
    This document provides a risk assessment for retaining EarthWear Clothiers as an audit client. It notes some minor past legal issues with the vice president of finance related to gambling. It also indicates management turnover in key accounting roles and some uncertainty about the skills of the new controller. Based on these risk factors, the overall risk of continuing the client engagement is assessed as medium. The recommendation is to retain EarthWear Clothiers as a client for now.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 1

    Name:

    Class:

    EARTHWEAR CLOTHIERS 3-5


    Client Continuance Evaluation RDR
    31 December 2014 Sept. 3, 2018
    General Risk Indicators

    Instructions: Evaluate and answer the following unanswered


    questions regarding the risk of retaining EarthWear as an audit
    client. Click on the yellow boxes and select either "Yes" or "No" If you selected 'Yes' on any of the questions to the left, provide and
    from the drop down menu. explanation below:

    Are there any concerns about undue reliance being placed on the results No
    of our work? (i.e. sale of the company, financing)

    Does the client have any associated entities that are not audited or are No
    being audited by firms outside of Willis & Adams?
    As a result of the Background check: In 1999, EarthWear's vice president of
    Have any situations been noted that bear on the integrity of management? finance, Don Evans, was charged with a misdemeanor involving illegal gambling
    Yes on local college sports games. Charges were later dropped in return for Mr.
    Evans agreeing to pay a fine of €750 and perform 50 hours of community
    service.
    Is there evidence that the business is financially distressed? No

    Is the client imposing on us any unreasonable scope or timing restrictions? No

    Is the client's industry or business characterized by significant operating,


    economic, product, of other commercial risk? (Examples of such risks
    include: development or start-up stage, high risk industry, an industry with No
    relatively short product lives, or product(s) of unknown or doubtful
    commercial feasibility.)

    Are there any pending enforcement matters or other investigations the


    outcome of which could adversely impact the viability or reputation of the No
    business?

    Has the information gathering process raised concerns about: unusual or


    contentious accounting policies, auditing procedures, internal controls, No
    reporting, proper accounting records, tax or regulatory matters?

    Are there any external conditions or trends that may have a significant
    impact on the client, such as changes in buyers, changes in suppliers, or No
    new competitors?

    Are there any internal conditions or trends that may raise concern, such as Former Controller Brad Norton left Earthwear in 2014 and went to another
    Yes
    management turnover or new accounting information systems? clothing company and also oversaw the new accounting software in early 2013.

    Are there any other risk concerns arising out of the information gathering Carol Mckay was the VP of external reporting before being promoted to
    process? Yes Controller. The management are concern if Carol McKay's skills are enough to be
    able to do the Job of a Controller.

    Briefly explain your overall risk assessment of the client:


    There are some doubts and uncertainties that results from the background check
    Overall risk assessment of the client: Medium
    of Don Evans and the promotion of Carol McKay.

    Based on the information gathered, and the above evaluation of Retain


    engagement continuation risk, recommend whether or not to have
    Willis & Adams continue to provide service to this client. Click on
    the yellow box and select either "Retain" or "Dismiss" from the drop
    down menu.

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