A large conglomerate is considering acquiring a medium -sized manufacturing company in a closely related industry. A major consideration by the management of the conglomerate in deciding whether to pursue the merger is the financial position of the company. Management has decided to obtain a detailed report based on an intensive investigation of the financial position of the sales department, production department and research and development department.
You are the auditor assigned to review this information. Please answer the following questions:
a. What type of auditor will you conduct?
b.For each of the three areas in the detailed report (sales, production, R&D)
i. Identify the accounting areas you will consider for the audit.
ii. Identify the documents that you will use for your audit
c.Which areas do you consider to be the most critical areas for the audit