MILESTONE 2: FINANCIAL STATEMENT RISK FACTORS

Financial Statement Risk Factors The audit team has obtained and documented an understanding of Target Corporation, we are now in a position to identify and assess the risks of material misstatement, and at the assertion level for classes of transactions, and account balances. Income Statement: According to the SEC, a majority of financial statement manipulations and audit failures involve overstated revenues. There are some procedures that will assist the audit team to identify areas of potential misstatements in the income statement: 1. Compare the revenue trend with economic conditions and industry trends 2. Compare cash flow from operations with Net income 3. Perform Analytical Procedures Revenue for Target Corporation has increased from 2013 (71.3 M) to 2014 ($72.6).