Are there any accounts you would specifically want to spend

Are there any accounts you would specifically want to spend your audit time on due to higher Risk of Material Misstatement (RMM) noted, note which accounts and why based on your answers the questions above (minimum 3 accounts and reasons why)? Answers such as \"Cash because itincreased or is a high risk account\" is an insufficient answer.

Amazon.com, Inc Consolidated Statements of Operations (In millions) Period Ending December 31, 2014 December 31, 2013 December 31, 2012 Assets Current Assets Cash And Cash Equivalents Marketable securities Inventory Accounts Receivable, net and Other 14,557 S 2,859 5,612 8,658 S 3,789 7,411 8,084 3,364 6,031 Total Current Assets 21,296 7,060 2,552 1647 32,555 24,625 10,949 Property Plant and Equipment Goodwill Other Assets 31,327 16,967 3,319 2,892 54,505 S 2,655 1,930 40,159 S Total Assets Liabilities Current Liabilities 26,266 S 13,318 4,892 792 19,002 3,084 2,277 24,363 Accounts Payable Accrued Expenses Other current liabilities 15,133 S 6,688 28,089 8,265 7,410 43.764 22,980 3,191 4,242 30,413 Total Current Liabilities Long Term Debt Other long term liabilities Total Liabilities Stockholders\' Equity Preferred Stock Common Stock Treasur Stock Additional paid-in capital Other Stockholder Equity Retained Earnings -1,837 9,573 185 2,190 1,837 11,135 -511 1,949 1,837 8,347 239 Total Stockholder Equity 10,741 9,746 8,192 Total Liabilities and Stockholder Equity 54,505 S 40,159 SS 32,555

Solution

Going through the results of Amazon for the three years 2012 to 2014, following are the three accounts which are attracting attention because of abnormal movement in the accounts:

1) Accounts Receivables : The outstanding balance in the Accounts Receivables has risen from nil in 2012 to 6500 millions in the year 2014, whereas the rise in the revenue is only 33% upto the year 2014 since 2012.

2) Inventory : Likewise in the inventory accounts of the concern, there is a high movement from the year 2012 to the year 2014. The average inventory in 2012 was nil and in the year 2014 it rose to $6500 millions. This figure is not conciding with the figure of rise in sales.

3) Accrued Expenses : Totally reverse of above two accounts is the Accrued Expenses which has reduced to nil in the year 2014 from $5000 millions in 2012 and $6500 millions. Whereas the profit figure says that it has reduced from $700 millions to $200 millions in 2014. There could be intention of the concern to put all accrued expenses against the later years profit to save tax. This gives indications of manupulation in the accounts.