ECON 1010 Lecture Notes - Glentel, Accounts Receivable, Business Process
30 Mar 2014
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Analysis of audit (engagement) risk for the revenue cycle: The audit risk for glentel inc. is low, thus the engagement risk must be high. Business strategy: glentel"s main business strategy is selling mobile phones in retail canada and u. s and providing telecommunications services. Since, the technological trend is changing constantly, it is really hard for glentel to maintain their revenue stream from retail division as they will incur more inventory costs due to inventory obsolesce. Due to this, the company may inflate sales amount to keep their stake in the market. Their keen focus is on acquiring telecommunications companies outside of canada to expand their relationships globally. So far, they have excelled in the acquisition of diamond wireless and mac station technologies. This poses greater concern to the auditor as these transactions are non-routine transaction with most them dealing with non-arm"s length. The company also recently purchased amt group based in australia.
