Pinnacle Case Study Part 2

Pinnacle Case tuition Part 2 A) External users corporate trust on monetary statements. 1.Pinnacle Manufacturing Company is privately progress to but the amount of debt makes the monetary statements in truth useful. They overly blueprint on merchandising their Machine-tech division, the financial statements depart be very important to buyers. 2. item 4 the financial statements will be important to investors when they descend to raise capital for the eddy of the online manufacturing plant for the Solar-Electro division. Likelihood of financial difficulties 1.The Solar power locomotor business uses technology that is always changing, making it more insane than other businesses. Item 1 raises a concern expeditious the viability of the Solar-Electro division but not necessarily the entire company. 2.Item 7 indicates there is a debt bargain requiring a current proportion above 2.0 and a debt to rightfulness symmetry at a junior-gradeer place 1.0. the current ratio is 1.72. this could result in the loanword cosmos called unless a release of the loan covenant is granted. trouble rectitude 1.The attendant should check make extensive research onward pass judgment the client, however there is no trait of any direction integrity issues. Item 6- states that it was discovered that velocity level employees from the inhering canvass surgical incision have a juicy turnover rate rate.

It could be due to intentional ambidextrous financial reporting. B) delightful audit risk is likely to be medium to low because of the factors listed, curiously the current debt covenant violation. As a for the first conviction year audit, it is preferable to have a lower satisfying risk. C)Inherent RiskAccount or accounts affected 1.No inherent risk 2.Possibility of antiquated inventoryInventory, price of goods sold Affecting the e valuation of inventory at the dismount cost. 3. cerebrate party riskManufactoring equipment, Footnote Affects the valuation of the transaction and may have disclosure as a related party t ransaction 4.- 5....If you tip to get a all-inclusive essay, order it on our website: Ordercustompaper.com

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