Burlington Bees: Using Analytical Procedures As Substantive Tests
Before attempting to complete Requirement 1, you should prepare a flowchart (can be informal) that clearly indicates the ticket sales and ticket revenue recognition process. This will be VERY different from the sales process of a wholesale company (like you did with the SUA) or for a retail company. Use prior experiences you have had purchasing tickets for sporting events or musical events to help you. Be sure to consider when in the process Burlington Bees can record revenue (refer to the revenue recognition principle discussed in Principles or Intermediate I for assistance). I am more than happy to help you with this paper, assuming you have attempted to flowchart the ticket process before coming to my office.
Determining the occurance of revenues is very important in an audit. Write one substantive audit procedure that does not involve an analytical procedure that would allow us to obtain comfort over the occurance of ticket sales revenue for Burlington Bees. The audit procedure should be detailed enough that I could send it to an audit team and have them perform it with no questions. (7 pts)
Discuss the difference in purpose of analytical procedures performed during planning and analytical procedures performed during fieldwork/test work. (3 pts)
Describe an analytical procedure you might do during planning to test Burlington Bees’ ticket sales revenue for the current year. You do not actually have to perform the procedure; just document how you would go about it and what you would hope to learn. (6 pts)
Calculate a reasonably precise estimate of ticket sales revenue using the information provided in the case. (I want your calculation details. You can handwrite the calculation, and this page will not be included as part of the page limit.) (10 pts)
Assume that reported ticket revenue on the income statement was $2,829,477. Compare your estimate from Requirement 5 to the reported revenue, and conclude on the reasonableness of reported revenue. Give two plausible explanations for the difference between your estimate and the reported revenue. (10 pts)
Research the appropriate use of “effect” and “affect” and use each in your paper. You must use each one at least once. Underline them, bold them, or italicize them so I can find them easily. (2 pts)
Use “to”, “too”, and “two” in your paper. Underline them, bold them, or italicize them so I can find them easily. (2 pts)
Writing Restrictions for this assignment:
• Any spelling/punctuation requirement included on a prior assignment will also be reviewed for accuracy if included in this paper. For example, since “than” and “then” were included on the first assignment, if you use either in this assignment, they must be spelled correctly.
• 12-point font
• One and a half spaced
• One page maximum
• Read “On Writing” for the things I will be looking for in your writing
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