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(PDF) Accounting and auditing standards

   

Added on  2021-02-19

10 Pages3162 Words60 Views
Inventory

Table of ContentsINTRODUCTION...........................................................................................................................3QUESTION 1...................................................................................................................................3QUESTION 2...................................................................................................................................7CONCLUSION................................................................................................................................9REFERENCES .............................................................................................................................10

INTRODUCTIONAccounting and auditing standards are significant for corporation operating atinternational level. In Australia corporation mainly follows standards issued by AASB. Standardare also prescribed for auditors who are responsible for providing opinion on accounts reportedby different corporations (Brown, Preiato and Tarca, 2014). The whole study is based on twocase scenarios, first one is related to compliance of relevant standard for inventories in context ofComputing Solution Limited and auditor's role and responsibilities with regards to Auditingstandards. While second case scenario deals with norms and standards which deals withbusiness combination and intellectual property rights in context of Beautiful Hair Limited. QUESTION 11. Identification and explanation about key assertions at risk related to inventory:Under risk management in respect of Computing and software solutions with regards ofassessment process, of Key assertion related to stock and inventory, This requires auditors andpublic accountants to become accustomed to corporations and environment in which theyfunctions or operates assessment. As per ASA 315, When there any material misstatement foundor exists and such misstatement involves any fraud and error, it can impact financials ofcorporation. This standard provide a basis for determining perfect scope, timing, auditprocedures length which are considered salient in acquiring reasonable and adequate auditevidence related to risks assessed (Wiedmann, Chen and Barrett, 2016).Inventory's valuation is most susceptible audit area. According to AASB 102 Inventoriesproper disclosure is required along with valuation method used compliance with normsprescribed. Along with it also emphasises upon separate disclosure of inventories lost ordamaged and assessment of realisable value of inventories as the case may be. Hereconsideration of two standards are required, first is ASA 501 “Existence and Valuation ofInventory” and second is ASA 315 “Identifying and Assessing the Risks of MaterialMisstatement through Understanding the Entity and Its Environment”As given in study that a package of best-selling computing presentation has been facedand resulted high level return due to suspected issues in software. Here in this type of caseauditors requires some information and technology knowledge since most of the auditor reliesupon data provided by a well know or best selling software. But ignorance of this area can lead

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