The scope of the audit is to verify the Annual Report filed, pursuant to Section 13 or 15(D) of the Securities Exchange Act of 1934 for the Fiscal Year Ended August 25, 2013. Verification of notes payable balances and due dates, sampling of receivables and payables, understanding of internal controls and risk analysis will be encompassed in the audit. See attached for schedule of dates and responsibilities. UNDERSTANDING THE BUSINESS
Winnebago Industries, Inc. has their headquarters located in Forest City, Iowa and founded in 1958. Winnebago has been one of the leading manufacturers of recreation vehicles in the United States. The recreational vehicles are sold through independent dealers in the United States and Canada.
The acquisition of SunnyBrook “Towables” in 2010 increased the types of recreational vehicles offered by Winnebago to include travel trailers and fifth wheel recreational vehicles. Towables operations have been included in the financial statements from the date of purchase on December 29, 2010. BACKGROUND INFORMATION
•Business Strategy and Target Customers
Winnebago Industries generates revenue mainly through the sale of travel trailers, recreational vehicles (RV) including the fifth wheel RV. The company also manufactures OEM parts for other manufacturers and commercial vehicles. Winnebago Industries is targeting a sector using the “value class” to increase their share of Class A and C markets. By re-implementing the logo on the motor homes and travel trailers, the company is strengthening the brand.
The loss of the dealer, FreedomRoads, LLC, could have a significant impact on Winnebago’s revenue as this organization consisted of “62 dealerships locations across 26 US states.” (wgo 2012)•Suppliers
By using a small group of suppliers for the chassis systems of the motor homes, the company’s expenses are dependent upon price increases or other outside factors of those companies. The raw materials are gardened through various sources. The suppliers of the chassis systems are Mercedes Benz, USA (a Daimler Company) and Mercedes Benz, Canada (a Daimler Company); Freightliner Custom Chassis Corporation (a Daimler Company) and Ford Motor Company. These suppliers account for 42% of the material purchases. •Competition
The RV market is highly competitive, with larger companies able to have a higher purchase power and enable a larger inventory. Some of the competitors filed for bankruptcy protection, allowing for a better cost structure. The competition entails design, price, quality and service. Our strengths are the branding, quality and service after the sale. •Social Factors
The company’s results can be affected by changing financial outlooks.
* Sales increased due to sales incentives and level of discounts to dealers. This could be an overstatement in planning budget and future projections. * The loss of Towables has decreased compared to 2011. Determining the correct amount and reasoning could impact budget and future revenues. INTERNAL CONTROL ENVIRONMENT
Management of Winnebago Industries, Inc. is responsible for establishing and maintaining effective internal control over financial reporting and the assessment of the effectiveness of the internal control. The Company’s internal control over the financial reporting is a process designed to provide reasonable assurance regarding the reliability and the preparation of financial statements for external uses in accordance with generally accepted accounting principles. AUDIT SCOPE CONSIDERATIONS
The scope of the audit is full audit for SEC reporting. We will test 5% of sales and receivables, 5% of payables. The internal controls will not be part of our scope, only verifying the audit committee and how they produce and follow the internal controls. •Materiality
Materiality for the 2012 audit is calculated on work paper 3-7. COMMUNICATION AND COORDINATIONWith regards to communication and coordination, the auditor will discuss how specialists/experts will be used throughout the audit. In addition, the auditor may list the locations that will be visited so that the audit may be more efficiently coordinated. Lastly, the auditor may create a review schedule so the entire audit team knows the timetable for the audit and the work that needs to be performed. SUMMARY OF AUDIT PLAN
In this section, a summary of all the previously addressed issues will be provided. Key issues, such as the scope of the audit, the main risks which need to be addressed, and the schedule of the audit will all be reviewed and included. AUDIT PLANNING MEMORANDUM APPROVALS
The audit partners and managers will sign off on the planning memo as evidence that they are in agreement as to the documented understanding of the client and its risks, as well as the scope and plan of the audit, as presented in this memorandum.