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Advanced Auditing and Assurance

   

Added on  2022-11-30

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Running head: ADVANCED AUDITING AND ASSURANCE
Advanced Auditing and Assurance
Name of the Student
Name of the University
Author’s Note
Advanced Auditing and Assurance_1

ADVANCED AUDITING AND ASSURANCE1
Table of Contents
Requirement 3............................................................................................................................2
Requirement 4............................................................................................................................3
References..................................................................................................................................5
Advanced Auditing and Assurance_2

ADVANCED AUDITING AND ASSURANCE2
Requirement 3
Sl.
No
.
Accounts Key Assertions
1. According to the Note 1-2 Financial
Instruments, IOOF considers the value of
the assets and liabilities as equal to the
carrying amount shown in the statement
of financial position (ioof.com.au, 2019).
The company has used certain
assumptions and judgments for the
valuation of these assets and liabilities
where the presence of certain
unobservable units can be seen. Since,
there is many judgments and assumptions
used for the valuation of these assets and
liabilities under the level 3 of fair value
hierarchy, it can create major material
effect on the statements of financial
position of the company (Lobo & Zhao,
2013).
The key assertion related with this
account is Valuation which states that the
assets, liabilities and equity balances are
needed to be values in appropriate basis
(Titera, 2013). In this situation, wrong
use of assumptions and judgments by
IOOF can lead to the wrong valuation of
the assets and liabilities under the three
level process of fair value which can lead
to material misstatements in the financial
statements. For this reason, this
particular assertion can be considered as
the risk of material misstatements.
2. According to notes of 2-2 (i)
Management and Service Fees Revenue,
IOOF provides management services to
unit trusts as well as funds operated by
them at the normal commercial rate
(ioof.com.au, 2019). The company
calculates the management and services
fees from the unit trusts on the basis of
the agreed percentage of the individual
funds disclosed under the product
disclosure statement. It implies that IOOF
uses certain judgments and assumptions
Three assertions are included in this
particular situation; they are Occurrence
which states the recognized transactions
in the financial statements have
occurred; Completeness which states that
the transactions which were supposed to
be recorded have been correctly
recognized in the financial reports; and
Accuracy which states the company has
recorded the transactions on accurate
basis (Knechel & Salterio, 2016). In the
provided situation, inappropriate use of
Advanced Auditing and Assurance_3

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