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Part 3: Find below information about a hypothetical audit client named Little Store, Inc. You have been assigned the task of auditing Little Stores Sales account for occurrence and completeness. You will be using substantive analytical procedures to test these assertions.

• Use the information about Little Store to develop expectations regarding Sales at the individual store level (i.e., disaggregated level).
• You will complete three sets of analytical procedures: 1 for each of the three main methods (trend, ratio, and reasonableness test). In each case, compare your expectations to the actual numbers and identify the stores with a material discrepancy.
• Use MS Excel to complete your analyses, highlighting material discrepancies in modest colors. Suggestion: Start by importing the table in the case to an Excel file.
• Submit your EXCEL file containing all of Part 3 to the Canvas Project 2 Assignment.

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Little Store, Inc. has eighteen convenience stores located in Oklahoma. Little Store has not opened any new stores for two years, but plans to open at least one during each of the next three years. Operations in the current stores seem to be relatively stable over the past few years, however, they do vary by demographic location and the mix of products sold.

The location of a store is based on several factors, such as competition and the economic environment of the location. Stores 1, 4, 6, 7, 8, 11, 13, 14, 16, 17, and 18 are considered to be in favorable locations.

Typically, a stores operations do not change much unless a new product line is introduced, such as selling gasoline, offering check-cashing services, or selling lottery tickets. The mix of products and services can vary, with the most important factor historically being whether the store sells gasoline. Stores 3, 4, 5, 6, 10, 11, 12, 13, 14, 15, 16, and 17 sell gasoline. These additional product lines typically affect the volume of customers as well as the number of full-time employees.

Additional factors to consider:

1. According to the National Association of Convenience Stores (NACS), industry sales should average about $490 per square foot this year.

2. Little Store outlets follow two basic floor plans. Stores 1, 2, 8, 9, and 18 have 2,500 square feet of room, while stores 3, 4, 5, 6, 7, 10, 11, 12, 13, 14, 15, 16, and 17 have 4,000 square feet of room.

3. In prior years, stores that sold gasoline had an average gross profit percentage of 30.1%, while stores that did not sell gasoline had an average gross profit percentage of only 22.1%. The average for all stores was 28.2%. Cost of Sales has already been audited this year as part of the audit of Inventory.

Store Number	Sales 2018 (unaudited)	Cost of Sales 2018 (audited)	Sales 2017	Avg. Inventory 2018	Avg. 2018 Employees
1	1,146,438	888,701	1,165,221	44,171	11.31
2	1,195,004	911,655	1,147,430	45,714	12.46
3	1,981,409	1,398,296	2,037,463	45,826	10.06
4	2,300,671	1,503,717	2,257,920	53,862	11.1
5	1,956,481	1,400,118	1,850,354	49,883	10.71
6	1,799,713	1,266,050	1,916,884	47,016	7.5
7	1,820,641	1,418,278	1,833,209	59,726	14
8	1,159,004	905,618	980,484	37,664	11.6
9	1,139,475	756,449	1,069,652	34,662	12.7
10	1,984,777	1,354,951	1,795,123	38,774	12.2
11	2,293,847	1,657,822	2,119,015	55,423	11.1
12	1,984,722	1,366,050	1,947,303	52,884	10.4
13	1,798,336	1,280,773	1,705,789	46,834	8.84
14	2,484,503	1,600,852	2,396,971	53,772	12.1
15	1,837,400	1,322,089	1,901,631	43,982	9.7
16	1,609,385	1,194,814	1,514,798	44,893	7.2
17	1,874,229	1,311,975	1,886,587	37,665	10.5
18	1,198,229	908,911	1,092,908	44,857	10.9

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