macro project

Macro Appliance Inc has requested our audit services for this year audit engagement. Its main line business is in the household industry where it manufactures and sale mechanical and electronic devices. BCA Watson Rice LLC has guidelines on factors that must be consider before starting this engagement which would be outline in this report. For both parties to get a successful outcome with an acceptable general auditing standards, BCA Watson Rice LLC must take reasonable step in identify the associated risk factors surrounding our new client’s Macro, its competence, its existing environment, and the rules and regulation governing Macro from internal and external. It is diligent and highly recommended that BCA Watson Rice LLC consider an objective view of the issues that may lead to the success or hinder the progress of this audit.

Management Integrity

Management of Macro needs to grant approval to BCA Watson Rice LLC to perform an ethical and critical evaluation on the employees and board executives in order to build a professional work relationship while evaluating their integrity. Management approval needs to enable BCA Watson Rice LLC to contact Macro`s prior auditors, communicate with them regarding their status and point of views on their experience with Macro. Approval should enable communication with other stakeholders of Macro like their vendors, clients, banks, and legal outstanding. Intensive research on Macro from the internet and associate partners to get a better understanding of their past and present situation, a criminal background check should also be run on Macro and its employees accordingly. A detail evaluation and review of Macro previous financial statements, documents, pending, and the analyzed the possibilities of any future legal proceedings. There should be great reliance on that Macro managements are ready and able to provide objective evidence when requested.

Skills and competences review

Macro appliances deals with household appliances aare very complex and competitive market. A detail review of the existing skills and competence Macro board and executive have will be a lead to determine if BCA Watson Rice LLC can match that, have the knowledge expertise and skill competence to accept this engagement.

Independent evaluation

A detail review of the employees of Macro and evaluation of there exists any relationship between Macro and BCA Watson Rice LLC to avoid any conflict of interest. Any existing relationship will impair independence. This event would also help the selection and division of team members who would be active in the audit of Macro. This event would also help identify if this audit should be accepted with respect to any existing threat identified.

Internal controls

It is very important that we identify the risk associated with our new auditee (Macro) of inherent control and detection risk. Macro most liquid asset is cash, a quick look on how this cash movement is applied would be a good initiative to identify possible red flag signals and how to prepare testing for this audit. A detail study of Macro and the way it carries out its activities must be performed to identify strategies in which weakness and risk to internal control can be identified. To ensure accuracy in the audit, internal control reports are to be made after examining all financial. Testing the auditee`s control procedures and system can be facilitated by using the COBIT framework that enables access to very intense business information and data (Sarbanes Oxley, 2019). It is also necessary to acknowledge if Macro`s financial procedure agrees with their regulation requirements.

Matters affecting the industry

A detail, understanding of the household appliance markets and current events outstanding that may affect or impact the audit of Macro. Macro deals in the household appliance market which ecological footprint is at the rising rate of rules and regulation to ensure testing of appliance's production and usage are carefully guided. Most government provides aid as tax's credit rebate to business that collaborate (Grand View Research, 2019). Evaluation of how Macro comply and apply these regulations is important before accepting the audit. Reputational effects are avoided if any flaws to this is identifying before before the audit. Waste and energy conservation is also an important factor that directly affects Macro and it is important to access if it is users friendly and bind itself in reducing the negative effect its products have on the environment. It would be important to know if any waiver exists and why before acceptance to this audit engagement. (Electronic Code of Federal Regulations, 2019). The recent market trends and status would also help BCA Watson Rice LLC in gaining a better understanding of Macro before accepting the audit.

Financial health and fees

Macro is a profit seeking business and owes a good review by its stakeholders especially the shareholders. It is important to review the financial worthiness of the auditee to be certain that manipulation of financial records to look appropriate in the eyes of users is impossible. It is well noted that any business that struggles financially tends to fraud and manipulations to gain credibility’s. A quick review of their investment and investor's reports, borrowing and financing capabilities would give an insight whether Macro faces any challenges financially. The audit fee should be negotiable to an amount that is not going to threaten or influence the judgement of the audit in any way. If Macro is financially upright audit fee should be fair, and BCA Watson Rice LLC should evaluate their independence on this before accepting the audit.

Above is some factors that need to be a review before accepting this audit, notify me for any further or additional information needed.

Yours Sincerely,

Dr. Wolod.

(Principal, BCA Watson Rice LLC)

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