Expert Answer :Below is an audit report for an integrated audit c

Solved by verified expert :1.Understanding the management assertions related to a speci?c control is an important factor in preparing the tests of controls. Using the assertions provided below, select the management assertion(s) that relates to the purpose of the controls in the table. (A management assertion may be selected once, more than once, or not at all.)Management Assertions(a) Existence or occurrence(b) Completeness(c) Rights and obligations(d) Valuation or allocation(e) Presentation and disclosure(f) Authorization(g) CutoffPurpose of Control Management AssertionTo ensure that credit is approved before asale is executed and service is provided orgoods are shippedTo ensure that transactions shown as sales areproperly classi?edTo ensure that when cash receipts are recordedthey show cash that was actually received by thecompany and depositedTo ensure that cash receipts transactions areproperly posted to the accounts receivablesubsidiary ledger and general ledgerTo ensure that all cash received by the companyis deposited and recorded in the cash receiptsjournal and that amounts and details, includingthe date, are shown correctlyTo ensure that sales transactions are recordedbased on the correct dates2.Below is an audit report for an integrated audit combined to include the opinions on both ICFR and the financial statements. Phrases reflecting 20 items that are required to be in this report have been removed and are provided in the list after the report. Select the proper phrase for each missing item and place the letter of the phrase on the answer space provided. All phrases will be used, and none will be used twice.Report of _1_ Registered Public Accounting FirmWe have audited the accompanying balance sheets of W Company as of December 31, 20X8 and 20X7, and the related statements of income, stockholders’ equity and comprehensive income, and cash flows for each of the years in the three-year period ended December 31, 20X8. We also have audited W Company’s internal control over financial reporting as of December 31, 20X8, based on [Identify control criteria, for example, “criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”].W Company’s management is responsible for these__2__, for maintaining __3__, and for__4_, included in the accompanying ___5__. Our responsibility is to __6__ and __7__. __8__. Those __9__the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained __10__. Our audits of the financial statements __11__ evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and __12__. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing __13__. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding __14__ and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. __15__internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods __16__ may become inadequate __17__, or that the degree of compliance with the policies or procedures may deteriorate. __18__, the financial statements referred to above present fairly, in all material respects, the financial position of W Company as of December 31, 20X8 and 20X7, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 20X8 __19__. Also in our opinion, W Company maintained, in all material respects, effective internal control __20__as of December 31, 20X8, based on [Identify control criteria, for example, “criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”].[SIGNATURE][City and State or Country][Date]Phrases to choose from:a. express an opinion on these financial statementsb. because of its inherent limitationsc. standards require that we plan and performd. independente. included examining, on a test basisf. because of changes in conditionsg. its assessment of the effectiveness of internal control over financial reportingh. the reliability of financial reportingi. over financial reportingj. financial statementsk. we conducted our audits in accordance with the standards of the Public CompanyAccounting Oversight Board (United States)l. in conformity with accounting principles generally accepted in the United Statesof Americam. effective internal control over financial reportingn. in our opiniono. and evaluating the design and operating effectiveness of internal control basedon the assessed riskp. [title of management’s report]q. evaluating the overall financial statement presentationr. an opinion on the company’s internal control over financial reporting based onour auditss. in all material respectst. are subject to the risk that controlsPlace the letter of the correct phrase on the answer line.1._____ 11._____2._____ 12._____3._____ 13._____4._____ 14._____5._____ 15._____6._____ 16._____7._____ 17._____8._____ 18._____9._____ 19._____10._____ 20._____3.Jackson Trucking Company is in the process of setting its target capital structure. The CFO believes the optimal debt-to-capital ratios is somewhere between 20% and 50% and her staff has compiled the following projections for EPS and the stock price at various debt levels.Debt/Capital Ratio Projected EPS Projected Stock Price20% $3.20 $35.0030% $3.45 $36.5040% $3.75 $36.2550% $3.50 $35.50Assuming that the firm uses only debt and common equity, what is Jackson’s optimal capital structure? At what debt-to-capital ratio is the company’s WACC minimized?