Preliminary Audit Plan

Only available on StudyMode
  • Download(s) : 140
  • Published : November 14, 2014
Open Document
Text Preview
 Preliminary Audit Plan Audit Objectives
Audit of the financial statement of Wells Fargo & Company for the year ended December 31, 2013. The scope of work for this audit will consist the company’s financial performance and reviewing the performance of existing loan portfolio. Preliminary Business and Industry Condition Analysis

Wells Fargo & Company provides financial services in retail, commercial, and corporate banking to individuals, businesses, and institutions. The company offers checking, saving, time deposit, market rate accounts, individual retirement accounts, and remittances. The company provides lines of credit like, auto, equity lines and loans, equipment and transportation loans, education and residential mortgage loans, and credit and debit cards. Its Wholesale Banking segment offers commercial loans and lines of credit, letters of credit, asset-based lending, equipment leasing, international trade facilities, trade financing, collection, foreign exchange, treasury management, investment management, institutional fixed-income sales, interest rate, commodity and equity risk management, insurance, corporate trust fiduciary and agency, and investment banking services, as well as online/electronic products. As of March 7, 2014, it operated through 9,000 locations and 12,000 ATMs, and offices in 36 countries, as well as through wellsfargo.com. The Company was founded in 1852 and is headquartered in San Francisco, California. The company has competitive advantage because of the largest bank branches in U.S. and conglomerate financial services provide by the company. Wells Fargo was ranked fourth in assets and first in the market value of common stock among all U.S. banks at December 31, 2013. Wells Fargo & company competes with large financial services companies, such as Bank of America Corporation with $84.62B in revenues, JPM with $92.45B in revenues and Citigroup Inc. with the revenue of $69.94B. Client Objectives, Strategies, and Business Risk

Wells Fargo & Company primary business objectives are to increase revenue, increase the net income and extend new loan commitment to small businesses which increase by 12 percent from 2012. The major strategies to achieves those objectives are based on the company’s strategic priorities includes; Putting customers first- Understanding customer financial needs, by offering products and services to satisfy those needs Growing revenue-this show how the company is service the needs of customer and how well the growth in the market share. Reducing expenses-this helps the company to increase the service provide to customers, invest in the future and reward the shareholders Making connections with communities and shareholders- investing in the communities and serve customer financial needs. The primary business risks associated with company’s strategies includes: Loans represent the largest component of assets on the balance sheet and related credit risk is a significant risk to manage Economics and market condition may have direct or indirect impact effect on loan demand, credit losses, fair value on securities and other financial instrument. Significant and increasing competition in the rapidly evolving financial services industry. Changes in interest rates and financial market values could reduce the net interest income and earnings. The company has developed the following responses to these risks: Monitoring and reviewing the performance of existing loan portfolio Improvement in U.S. economy and careful monitoring of the industry condition Quality customer service, the wide variety of products and services to satisfy customers’ needs. Assessing interest rate risk by comparing outcomes under various earnings

Significant Risks
The significant risks were noted as a result of operating environment and economics aspects Risk
Negative publicity, including as a result of protests, could damage reputation and...
tracking img