C . Create a test to assess appropriate assertions for designated high-risk business transactions
II . Risk Factors : For this part of the assessment , you will continue your audit report using the information you have gathered to address the following elements pertaining to risk factors in all the major business transactions .
A . Analyze the income statement for any potential risk factors and compliance issues with Generally Accepted Accounting Principles ( GAAP ) or International Financial Recording Standards ( IFRS ).
B . Analyze the risk factors and compliance issues with GAAP or IFRS on the balance sheet .
C . Using the internal control , analyze the cash and revenue for potential risk factors .
1 . What risks need to be documented ?
2 . How does this information compare to the company or industry averages , or the company ’ s past performance ?
D . Explain the audit universe and how you identified it .
E . Based on your analysis of risk , devise a sampling program for the audit universe .
F . Choose the most preferable audit testing procedures that could be used in the field , based on the audit universe items sampled in this situation .
III . Memos : For this part of the assessment , you will use your audit report to prepare memos to upper management .
A . Prepare a memo to be reviewed by the chief financial officer ( CFO ) that summarizes the audit process .