Audit Assignment NO. 3

Please examine the case of Keystone Computers and Network, found attached below.  Review these working papers and then respond to the following questions, addressing each individually in your 3- to 5-page paper that is formatted according to APA.

In the audit plan for the audit of Keystone Computers & Networks, Inc., there is a section on significant accounting and auditing matters. The second matter described involves capitalizing the costs of developing a software program for sale. Answer the following:

1. Research this issue and write a brief memorandum for the working papers describing the issue and summarizing the appropriate method of accounting for the development costs.
2. Based on your research, describe the major audit issue that you believe will be involved in auditing the software development costs.