Your task as the senior on the audit team is to prepare a memo for the engagement partner based on the Sporteva information provided in the case, including EXHIBITS 1, 2, 3 and 4. The planning memo should address the following: 1) Client business risks, 2) Audit risk factors, 3) Accounting issues, 4) the accounts with the most significance to the audit and the related management assertions for these accounts, and 5) the planned audit approach to address the accounting issues and audit risks. Prepare the audit planning memorandum using the following format (Italicized text gives instructions for completion of the memo):
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