I need help with this Milestone the company that I have is A

I need help with this Milestone, the company that I have is Amazon.com, Inc. I just need help getting started. Thanks
Prompt: Prepare memos with your recommendations to upper management using the findings from your audit report.  

Specifically, the following critical elements must be addressed:

A. Prepare a memo to be reviewed by the chief financial officer (CFO) that summarizes the audit process

. 1. Explain any sampling or other audit work that could be done, and if you would recommend the company pursue this additional work. Justify your response.

2. Make recommendations to the CFO on how to mitigate potential risk factors for major business transactions identified in the audit report.

B. Assume you are now the CFO. Prepare a memo to the Board of Directors as to what potential issues the external audit team might find and what the company’s response should be.

1. Evaluate the findings from the audit report. Be sure to view these findings from the CFO’s point of view.

2. Develop a strategy to mitigate risks identified in the audit report.

3. Describe how the company might implement the strategy based on the findings from the audit report.  

Solution

Memo 1

From:    Name

To:          Upper Management

Date:     XX/XX/XXXX

Subject: “Recommendations to Upper Management of Amazon Ltd”

1.Recommendation Of Audit Technique:

I would like to recommend the management of the Amazon to incorporate new techniques for audit. One of it could be Audit Sampling. Audit Sampling can be defined as “ Application of audit procedures to less than 100% of items within a population of audit relevance such that all sampling units have a chance of selection in order to provide the auditor with a reasonable basis on which to draw conclusions about the entire population.”

It will be very helpful since it will be uneconomical and impracticable to test 100% of items within a population. Also helps in obtaining minimum amount of audit evidence which will be sufficient and appropriate. There were so many techniques to follow audit sampling. Few of them are haphazard sampling, Stratified Sampling, Systematic Sampling and Block sampling. So it will be justifiable for the company to follow this technique which will saves a lot of time along with gaining sufficient and appropriate audit evidence.

2.Recommendations to CFO on mitigation of potential risk factors:

It is recommended to CFO of the company to identify the internal controls within company, strengthen them and verify them whether they are in line with business requirements.

As observed during the audit, most of the business transactions entered with third parties were not having proper agreements and documents to verify the authenticity of the transactions. This is due to lack of proper review system for those business transactions. No other person was there to review and supervise the work done by the personnel. If this continues, more difficulties will be faced by the company from the external auditors which will results in qualifications in audit report.

So it will better to take an action as early as possible to identify whether proper internal controls exists. If yes, then check whether they were in line with business requirements. If no, then place proper internal controls and review them regularly to meet the business requirements.

NAME

Memo 2

From: CFO

To: Board of Directors

Date: XX/XX/XXXX

Subject: Potential issues likely to be with auditors and our response for the same

1.Evaluation of findings from the Audit Report:

There were some key findings in our audit report which will be helpful to resolve them or prepare an action plan before the external audit starts. Some the key findings are as follows:

2.Strategies for mitigation of risks:

For the above mentioned risks facing by the company, the following are the strategies to be implemented:

3.How to implement the above discussed strategies:

It is very important to prepare an action plan for the above discussed strategies so that most of the issues can be solved before the external audit starts.

CFO