Submitted by: Submitted by CristyHardy
Views: 1016
Words: 1586
Pages: 7
Category: Business and Industry
Date Submitted: 04/03/2011 01:14 PM
My1040Return.com – Case 2.1
1. You are an audit senior with Gooch & Brown CPA, LLP, a local accounting firm specializing in audits of information systems and financial statements. Your1040Return.com engaged your firm to perform its financial statement audit. You have been asked by the partner to perform the following tasks:
a. Identify Your1040Return.com’s major business risks and describe how those risks may increase the likelihood of material misstatements in Your1040Retrun.com’s financial statements.
Software & Staff- One of Your1040Return.com’s main selling features that stand out above the rest is that they will always provide the most up to date tax preparation software for their clients. If the tax preparation software is not updated correctly by software technicians not implementing new tax law into the software, clients will file incorrect returns. This is a huge risk for Your1040Return.com. They always need to strive to have the most advanced tax preparation software, and thoroughly make sure all software has been updated correctly. Your1040Return.com should employ only the smartest employees that can enhance to the success of the company. With most the current employees being family members, this could create a problem for Your1040Return.com. The company is new, and it needs enough experienced employees to keep the business alive! If the software errors are consistent due to lack of experienced technicians, clients will not continue to purchase the services of Your1040Return.com, therefore creating pressure for management to continue to increase revenues. It may be more beneficial for Your1040Return.com to hire more experienced employees that they will have to pay a higher salary but can feel more comfortable with their degree of on the job experience. The lack of experience of the current employees may result in judgment errors that lead to misstatements in the financial statements.
Customers- Your1040Return.com’s business...