Summary Learning Team Assignment Week 2.docx Running head: LEARNING TEAM ASSIGNMENT, WEEK 2 1 ACC 492 Audit Cash, Financial Instruments, Sale, and Receivables Accoun
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Learning Team Assignment Week Running head: LEARNING TEAM ASSIGNMENT, WEEK 2 1 ACC 492 Audit Cash, Financial Instruments, Sale, and Receivables Accounts and Cycles ACC 492 LEARNING TEAM ASSIGNMENT,...
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week 2 1 acc 492 audit cas
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Running head: LEARNING TEAM ASSIGNMENT, WEEK 2 1
ACC 492
Audit Cash, Financial Instruments, Sale, and Receivables Accounts and Cycles
ACC 492
LEARNING TEAM ASSIGNMENT, WEEK 2
Learning Team Assignment, Week 2
Summary
In this particular assignment we will be analyzing the importance of auditing as well as
utilizing internal and test controls for Gap Inc. which will include the program steps that would
aid in providing Gap Inc. daily financial operations to run effectively and effortlessly. Moreover,
in February of 2019 the Board of Directors had initiated for the Company to be split into two
independently publicly-traded companies. However, on January 16, 2020 it was determined that
the splitting of the two companies only initiated potential operational inefficiencies and areas for
improvement. Therefore, this company identifies their operating segments based on how their
business activities are being regulated and assessed. As of February 1, 2020, this applies to all
sister companies within Gap Inc.
Introduction to Gap Inc.
Gap Inc. is one of the leading apparel retail companies in the United States based out of
San Francisco, California established in July 1969. According to “Gap Inc”(2020) “Gap, Inc. was
founded with a simple idea - make it easier to find a pair of jeans that fit with a commitment to
do more.”(para 1). Gap Inc. produces denim, khakis, T-shirts, boxers, casual wear amongst other
items. This company sustains numerous brands from Gap, Old Navy, Banana Republic, Athleta
and Intermix to name a few. The company was a hit initially and took off so fast that by 1979
, they went public with an initial offering of 1.2 million shares of stock at $18 a share and as of
January
22, 2021 the stock closed at $22.61 (“Nasdaq”, 2020).
The nature of the company offers apparel, accessories, and personal care products for
men, women, and children and is considered an omni-channel retailer. Looking at the share price
alone and considering the length of time the company has been in business, it would seem that
the clothing business has its own set of risks. There are many factors that contribute to the
inherent risk of Gap Inc. which includes the highly competitive nature of the business,
the risk of managing inventory effectively, the risk of an unstable economy and predicting
trends, and the risk of failure to update information technology to protect operations, just to name
a few (“Gap Inc”,
2019) .
Cash
When performing any type of audit it’s important to have a plan and get organized to
optimize the use of any and all information you will be looking over. When the audit begins, first
lay out your plan from beginning to end. In order to do this, you will have to discuss the
processes of the company and find out how they function. Meanwhile looking over the 10-K for
Gap Inc. doesn’t show much concern for their cash flow for the company. It is important to
perform tests of controls, balances, and transactions as well as other tests when beginning a cash
audit.
When performing an audit on the cash of a company your first step is going to be
determining the risks. These risks are ones that are associated with the company related to cash
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