Discuss the importance of the completeness assertion as it relates to auditing sales revenue.

Applied Auditing and Risk assesment

The following data show the annual revenue ($ millions) and the estimated team value ($ millions) for the 30 Major League Baseball teams (Forbes website, January 16, 2014).

1. Write the regression equation.

2. Interpret the regression constant and regression coefficient.

3. Forecast a value for the dependent variable, test the significance of the regression coefficient at an alpha level of .05. Test the overall significance of the regression model, and Interpret the coefficient of determination.

5. Are there any indications of violations of the general linear model? You must address each assumption separately and explain.

R corporation is planning on increasing revenue by expanding their sales department and developing an online sale program. What advice would you give R coro. before the expansion?

Revenue recognition at a point in time or over time

Kleymenova Consulting, Inc., enters into a contract to provide consulting services

1. The consulting services are the provision of technical computer assistance as needed. For $25,000 per month, whenever the client has a problem, it contacts Kleymenova, which dispatches a consultant to address the problem at no additional charge.

2. The consulting services are to develop a new customer payment collection system for the client. The $300,000 contract price is payable in installments as certain benchmarks are reached. Because of the specialized nature of the software, there is no alternative use for the computer code. Its only use is for Kleymenova’s client.

3. The consulting services are to update and improve the client’s existing customer collection system. The $300,000 contract price is payable when certain benchmarks are reached, the client has signed off on an improved functionality promised under the contract, and the update has “gone live.”

4. Kleymenova is developing a generic customer payment collection system, which will be installed at the client’s facilities upon completion. The client paid $50,000 upon signing the contract and will pay the $250,000 balance of the contract price when installation is complete. Kleymenova will also be able to install essentially the same system on other clients’ computers.

Sander is setting up a recording studio which will have an annual revenue of $80,000 and annual cost of $40,000. The studio will require an initial investment of $20,000. Sander’s discount rate is 10%, and income tax where he lives, is 40%. In the investment year, depreciation on all items is 50%, then 30% the following year, and 20% in the next year, which is the end of the schedule. What is the net present value after two years of recording?

1. $71,500
2. $41,000
3. $29,200
4. $49,400

1.The monthly revenue of a mobile mechanic business is given by R = 1,200p - 9p2​, where p is the hourly charge (in dollars) for the services the business provides. At what charge will the revenue be $14,400 if the price charged must be greater than​ $50? Provide your answer to the nearest dollar.

2. A company produces water bottles where the variable cost per bottle is $3.50 and fixed cost is $20,000 per year. Next year, the company wants the total cost to be $48,000. How many bottles should be made next year?

3. A company manufactures water filters that cost $15 for labour and material, plus $50,000 in fixed costs. If they sell the water filter for $20, how many filters must be sold to break even?

Using the existing regression equation, what would you predict the revenue of a team to be if the coach’s salary is .5 million and the winning percentage is 30 percent? Select one: a. 12 Million b. 14.8 Million c. 15.0 Million d. 14.2 Million e. Cannot be determined from the data.

19. Make a graph showing the spending and tax revenue of your satate government for as many years as you can find (use the government of your home country if you are not from the United States).

a. What trends do you notice?

b. What spending categories make up the largest share of the state budget?

c. What are the largest sources of revenue?

What are some of the inherent risks associated with the revenue, cash and marketable securities accounts? What are some of substantive tests associate with auditing these accounts?

"Taxes are a necessary evil to raise revenue for the government, towards funding expenditure on 'public goods and services'. We should aim to do this in the most effective and efficient way - with the lowest marginal tax rates, and lowest distortions possible. This could be achieved by eliminating all forms of taxes on income and replacing them with a uniform tax on expenditure on goods and services instead."  

Provide a critical assessment of this statement based on economic concept