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ASA 300 explains the components of an audit plan.

ASA 315 Describes the procedures used in obtaining an understanding of the
entity and its environment.
` ASA 520 Analytical Procedures requires that
auditors apply   at the
 stage of the audit to   a more
      and to   
areas of   

` Analytical procedures involve:

a    of  

among data to    expected or
unexpected    and other 
 .

 
` that all the ratios are material and necessary in auditing a clothing retailer.

` There may be audit risk depending on whether the stock take was
conducted by the auditor or just the company.

` Internal controls may be an issue since the company only conducts a stock
take annually. Maybe there is a lack of control over inventory and its
valuation since old stock may be considered worthless depending on
fashion trends.

` The ratios provided in the question need to be compared to an industry

average or previous periods to fully understand the financial situation of
the business.
the   
` aallen from 1.5 in 2008 to 1.4 in 2009

` Assumption: that the company has more

liabilities in 2009 and may find it more
difficult to pay its debts.
  
   
` Increased from 0.5 in 2008 to 0.8 in 2009
` Assumption: the company has acquired
more debt and a worrying sign that the
company may be struggling.

` The audit should investigate the reasons

for the debt, what type of facility was
used and how the company is servicing
the debt.
     
` aallen from 6.2 in 2008 to to 4.1 in 2009

` Assumption: this is due to an increase in

debt and a slower growth in earnings.

  
` has increased to 43 days in 2009 from 33
days in 2008.

` Assumption: the company is having

difficulties collecting money from its
customers and should review their credit
policies.
  
` has increased from 45 days in 2008 to 56
days in 2009.

` Assumption: Stock is not being sold as

quickly as before. However it would be
necessary to compare this ratio with the
industry average to get a better idea.
 !
` It has increased from 7% in 2008 to 9% in
2009.

` Assumption: the company is growing

more efficiently and has greater margins
with better returns for owners. However,
it does not take into account the amount
of interest paid for its loans and the taxes.
0 "
` Increased from 30% in 2008 to 35% in
2009

` Assumption: The reflects that the

company has been operating more
efficiently from 2008 with a growth in 5%.