Instructor Resource Manual — Do Not Copy or Redistribute
Asher Farms Inc.
C a s e 2.4
PROFESSIONAL STANDARDS
Relevant professional standards for this assignment are AU Section 310, “Appointment of the
Independent Auditor,” AU Section 311, “Planning and Supervision,” AU Section 312, “Audit Risk and
Materiality in Conducting an Audit,” AU Section 314, “Understand the Entity and Its Environment and Assessing the Risks of Material Misstatements” and AU Section 316, “Consideration of Fraud in a Financial Statement Audit.”
QUESTIONS AND SUGGESTED SOLUTION
A useful approach for understanding a client’s business environment and [1] associated business risks is to perform a PESTLE analysis. PESTLE is an acronym for Political, Economic, …show more content…

This has resulted in a positive impact on the demand for chicken products.
Financial Statement Accounts/Disclosures that could be affected: Revenues, inventory
The company may not be able to sell as much poultry.
 Public concern over outbreak of livestock diseases such as avian influenza. Negative publicity of the outbreak of a disease related to chicken stock could raise health concerns with consumers and adversely impact the demand for chicken products from the company.
Financial Statement Accounts/Disclosures that could be affected: Revenues, inventory
The company may not be able to sell as much poultry.
 Public concern over contamination of chicken products by disease-producing organisms or pathogens, such as Listeria monocytogenes, Salmonella and generic E. coli. Negative publicity related to the contamination of chicken products with these pathogens could raise health concerns and adversely impact the demand for chicken products from the company Financial Statement Accounts/Disclosures that could be affected: Revenues, inventory
The company may not be able to sell as much poultry.
 Public concern over corporate social responsibility and the humane treatment of chicken livestock. Negative publicity related to intensive factory production of chicken could raise
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