The effect of knowledge transfer

Running head: AUDITING
Auditing
Name of the Student
Name of the University
Author’s Note

1AUDITING
Audit Planning Memorandum
Date 27th March 27, 2020
To Senior Audit Partner
Prepared By Engagement Manager
1. Business Information
Corby is a leading Canadian company involves in manufacturing, marketing and importing of spirit and wines. The
main growth driver of the company is its diverse brand portfolio allowing it in ensuring profitable organic growth
with strong and consistent cash flows. As Corby is a publicly traded company, its shares are traded in Toronto Stock
Exchange under the name of “CSW.A” and “CSW.B”. Main source of revenue of Corby is sales of its owned-brands
and it also earns commission income from the non-owned brands in Canada.
2. Risk Assessment
Risk assessment of Corby is based on assessing the external and control environment of the client’s Board;
and the overall assessment of the inherent risk of Corby’s accounts is considered as high, medium or low based on
the assessment outcome. The significant audit risk areas are shown in below.
3. Review Risk Areas
Revenue – Since revenue is the main source of income of Corby, it could be materially overstated due to
demonstrate improved financial performance. This needs to be assessed.
Expenses (Marketing, Sales and Administration) – There is a specific risk that the expenditures incurred during
the year may surpass the budget; and thus, this needs to be checked.
Trade Receivables – Since sales is related to receivable, increase in sales leads to increase in receivables. However,
accounts receivables have decreased in Corby and this need to be checked.