Audit of Earth Wear Clothiers

Prompt: Your organization has decided to move forward with the audit of EarthWear Clothiers. As lead auditor, you will select one of EarthWear Clothiers’ business objectives and create an audit plan of their financial statements. The business objectives are:

Expand further into the global market by launching internet sites into South American countries
Increase customer base by introducing a new extreme sports product line to attract younger consumers
Reduce pricing to be more competitive in the marketplace by seeking out additional vendor relationships to lower costs of goods sold
Implement an employee stock purchase plan to increase productivity and employee morale
 Reduce delivery and distribution time of products and services by adding additional warehouse locations and see also https://en.wikipedia.org/wiki/Sustainable_fashion for more details.

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Use the information from your preliminary review and auditing standards to support your plan. Using your selected business objective, create an audit plan of the organization’s financial statements that addresses the following: business risks, management assertions, audit risk, internal controls, and the effect on audit procedures. Support your plan with the appropriate auditing standards. Also, determine materiality by conducting a preliminary risk assessment, and explain which factors were used in making this determination. You can obtain the ICFR and materiality guidelines on the Willis & Adams website. (Clicking the link initiates an automatic download of a ZIP file

You will need a utility to unzip the archive before you can use it as intended.)
Specifically, the following critical elements must be addressed:

II. Planning the Audit: Select one of the organization’s business objectives and create an audit plan of the organization’s financial statements. Use the information from your preliminary review and auditing standards to support your plan.

A.
Using your selected business objective, create an audit plan of the organization’s financial statements that addresses the following, and support each with the appropriate auditing standards:
1. Business risks
2. Management assertions
3. Audit risk
4. Internal controls
5. Effect on audit procedures

B. Determine materiality by conducting a preliminary risk assessment, and explain which factors were used in making this determination.

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