Advanced Auditing and Assurance - Doc
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Added on 2021-05-31
Advanced Auditing and Assurance - Doc
Added on 2021-05-31
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Running head: ADVANCED AUDITING AND ASSURANCEAdvanced Auditing and AssuranceName of the Student:Name of the University:Author’s Note:Course ID:
1ADVANCED AUDITING AND ASSURANCEExecutive SummaryThe depictions associated to Vectus’s “corporate governance” arrangements with threefactors illustrating the reliance on the overall control environment can be identified withcompliance with third edition “Australian Securities Exchange (ASX) Corporate GovernanceCouncil’s Corporate Governance Principles and Recommendations”. Secondly, appropriateaccounting standards in addressing financial reporting risks is considered to be a major strengthto trace any issues pertaining to material misstatements. Furthermore, Vectus strives tocontinuously improve the risk management and internal control environment. Despite of thesubstantial auditing risk associated to going concerns, Vectus has been proactive enough inmitigate the going concern risks. The audit assessment has included significant non-routineforecast of the cash inflows and outflows thereby including the expected impact of plannedcapital raising for timing and quantum. It has been further depicted that auditing procedure hasupdated the understanding of management’s main process of determining whether the spendingon research and development has been able to meet “AASB 138 recognition criteria”. Theauditing team has considered meeting with the management and discussing on the assessment ofjudgment areas especially in the current stage of the research and development.
2ADVANCED AUDITING AND ASSURANCETable of ContentsAnswer to Question No. 1...............................................................................................................3Answer to Question No. 2...............................................................................................................6Answer to Question No. 3...............................................................................................................8References and Bibliographies......................................................................................................10
3ADVANCED AUDITING AND ASSURANCEAnswer to Question No. 1Audit risk could be defined as the risk, in which the auditor provides in appropriate auditopinion on the financial statements (Hsieh, Lin and Chang 2018). Hence, audit risk mightconstitute of any factor leading to material misstatement or omission in the financial statements.Thus, identification of significant business risks result in the detection of audit risk. In case ofVectus Biosystems Limited, the four accounts or areas of concern comprise of the following:Liabilities:Considerable concern could be observed in the liability section, which is represented inthe balance sheet statement of the organization. This is because there is high possibility thatVectus Biosystems Limited might have understated its liability, since no recognition ordisclosure of any provision is made in the financial statements of the organization. Moreover, thecontingency-related disclosures might not reveal significantly the precise net amount to berecovered from the tax authority. Finally, it has been identified that there is no presence of long-term borrowings in the annual report of the organization; thus, it is a rising concern for carryingout the audit work. Table 1: Liability disclosure of Vectus Biosystems Limited for the years 2016 and 2017
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