Report: Balance Sheet and Risk Essay examples

Submitted By tracyxun
Words: 5478
Pages: 22

Audit
Planning Memo
Prepared by: Group Red
Robert Mumford
Zhenwei (Wayne) He
Danning (Emily) Luo
Daljinder Kaur
Simran

Contents
Gaining an Understanding of the Client – Prepared by Robert ................................................................. 1
Entity Level ......................................................................................................................................... 1
Industry Level ..................................................................................................................................... 2
Economic Level................................................................................................................................... 2
Business Risks of the Entity – Prepared by Daljinder ............................................................................... 3
Three Significant Audit Risks – Prepared by Wayne & Emily .................................................................. 4
Fraud Risk Assessment – Prepared by Simran.......................................................................................... 5
Risk of Material Misstatement – Prepared by Simran ............................................................................... 6
Materiality – Prepared by Daljinder ......................................................................................................... 7
Planning Analytics Conclusion – Prepared by Wayne .............................................................................. 7
Corporate Governance – Prepared by Wayne ........................................................................................... 8
Five Areas of Inherent Risk – Prepared by Robert.................................................................................... 9
Going concern risk – Prepared by Emily ................................................................................................ 11
Assertions Most at Risk for Contingent Liabilities – Prepared by Daljinder ............................................ 12
Appendix ............................................................................................................................................... 13
Risk Factors Table – Prepared by Simran ............................................................................................ 13
Planning Analytics for the Income Statement – Prepared by Robert ................................................... 14
Planning Analytics for the Balance Sheet – Prepared by Robert ......................................................... 15
Planning Analytics Ratios - Prepared by Robert .................................................................................. 16
Materiality Calculations – Prepared by Daljinder................................................................................ 16
Going Concern Calculations – Prepared by Emily ............................................................................... 16
Works Cited........................................................................................................................................... 17

Gaining an Understanding of the Client – Prepared by Robert
Entity Level


Approaching bankruptcy in 2006 the company terminated its manufacturing operations and switched to licensing royalties starting from its own initial portfolio (Sturgeon, 2010).



On October 24, 2013 the company saw a 23% drop in share price following failure to win a patent infringement case against Apple in Texas. (Vancouver Sun, 2013).



The V-Chip licenses outlook is negative due to digital television manufacturers opting to either to forego the product or using a competitor’s product (Wi-LAN, 2012).



Research & Development as of 2012 is primarily focused towards finding innovations in wireless broadband patents to help expand the potential of Wi-LAN’s portfolio (Wi-LAN, 2012).



Over 76% of expenses incurred in 2012 alone was Cost of Revenue which is comprised of the…