Question

Identify three specific accounts you would specifically want to spend your audit time on due to higher Risk of Material Misstatement (RMM).  

	APPLE INC. INCOME STATEMENT
	29-Sep-18	30-Sep-17	24-Sep-16
Net sales	$         265,595	$         229,234	$         215,639	100%	100%	100%	16%		6%
Cost of sales	163,756	141,048	131,376	62%	62%	61%	16%		7%
Gross margin	101,839	88,186	84,263	38%	38%	39%	15%		5%
Operating expenses:
Research and development	14,236	11,581	10,045	5%	5%	5%	23%		15%
Selling, general and administrative	16,705	15,261	14,194	6%	7%	7%	9%		8%
Total operating expenses	30,941	26,842	24,239	12%	12%	11%	15%		11%
Operating income	70,898	61,344	60,024	27%	27%	28%	16%		2%
Other income/(expense), net	2,005	2,745	1,348	1%	1%	1%	-27%		104%
Income before provision for income taxes	72,903	64,089	61,372	27%	28%	28%	14%		4%
Provision for income taxes	13,372	15,738	15,685	5%	7%	7%	-15%		0%
Net income	$            59,531	$            48,351	$            45,687	22%	21%	21%	23%		6%

Answer 1