logo

ASA 701 Auditing Assignment

17 Pages4011 Words216 Views
   

Auditing (ASA 701)

   

Added on  2020-05-28

ASA 701 Auditing Assignment

   

Auditing (ASA 701)

   Added on 2020-05-28

ShareRelated Documents
Running head: AuditAudit
ASA 701 Auditing Assignment_1
Audit 1Executive Summary ASA 701 ‘Communicating Key Audit Matters in the Independent Auditor's Report ‘ refers to theaccountability of the auditors to report crucial auditing matters in the auditor's report. It guidesthem regarding what to communicate in the report along with their content and format. The motive behind communicating the key audit matters is to increase the communicative valueof the report by making it more transparent regarding the performed audit. Thus communicatingkey audit matters supplies additional information to the users of the financial report. Thus in order to test the key assertions at risk in relation to inventory, property, equipment andplant, the auditor must check the occurrence of their transactions. A sample of their purchasesmust be taken and it must be compared to the requisitions and receiving reports. Another assertion in this regard is completeness. It enables the auditor to verify whether thepurchases are recorded in the books of account. Accuracy assists the auditor to find out if thetransactions are free from errors. Authorizations allow the auditors to verify if the management and staff implement properinternal control procedures while managing the assets. Lastly Cutoff ensures that all thetransactions have been reported in the appropriate fiscal year. So, in this report, the cases of Advanced Computer Solutions Limited and Green MachineLimited have been discussed. These relate to the key assertions at risk as well as the substantiveaudit procedures performed in order to identify them.
ASA 701 Auditing Assignment_2
Audit 2Furthermore, this report also states the applicability of ASA 701 on these cases along with thedisclosers required in the Key Audit Matters Section of the Auditor's report. ContentsAssessing the risk of material misstatement and determining the appropriate response with regards to the inventory of Advanced Computer Solutions Limited..................................................................................3Introduction.................................................................................................................................................3Key Assertions at Risk in Relation to Inventory..........................................................................................3Two substantive audit procedures performed in response to each risk identified above..............................5Requirements of ASA 701 and the rationale for the auditing standard........................................................6Determining if the above-mentioned matters are key audit matters........................................................6Disclosers required in the Key Audit Matters Section of the Auditor’s report as required under ASA 701...........................................................................................................................................................7Conclusion...................................................................................................................................................8Assessing the risk of material misstatement and determining the appropriate response with regards to property, plant and equipment of Green Machine Limited..........................................................................9Introduction.................................................................................................................................................9Key Assertions at Risk in Relation to property, plant and equipment.......................................................10Two substantive audit procedures performed in response to each risk identified above............................11Requirements of ASA 701 and the rationale for the auditing standard.....................................................12Determining if the above-mentioned matters are key audit matters......................................................13Disclosers required in the Key Audit Matters Section of the Auditor’s report as required under ASA 701.........................................................................................................................................................13Conclusion.................................................................................................................................................14References.................................................................................................................................................15
ASA 701 Auditing Assignment_3
Audit 3Assessing the risk of material misstatement and determining the appropriate response withregards to the inventory of Advanced Computer Solutions Limited Introduction ASA 701 deals with the accountability of the auditors to communicate the key audit matters intothe auditor’s report. It states the auditors what to communicate in the auditor’s report and alongwith the format and content of the information communicated.Additionally, the key assertions at risk with regards to inventory can be accuracy, completeness,occurrence, authorization and cutoff. The substantive audit procedures for testing the inventorycan be cutoff analysis, observing the physical inventory count and reconciling the inventory(Knechel and Salterio, 2016). So, this report discusses the key assertion at risk with regards to inventory along with thesubstantive audit procedures conducted for its analysis. It also states the necessity for applyingASA 701 and the disclosures required to be mentioned in the section pertaining to key auditmatters of the auditor' report.Key Assertions at Risk in Relation to Inventory The two key assertions at risk in relation to the inventory of Advanced Computer SolutionsLimited are authorization and accuracy. Authorization addresses if the management and staff ofthe company follow proper internal control procedures while dealing with inventory.In order to test this assertion, a sample material or inventory requisition and bills of lading shallbe verified by the auditor for appropriate authorization. In this case, the inventory turnover
ASA 701 Auditing Assignment_4

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Auditing and Assurance Services
|18
|3935
|150

Auditing and Assurance Services
|15
|3391
|157

Auditing and Assurance: Inventory and Intellectual Property Intangible Assets
|19
|4576
|490

Identify and Explain Two Key Assertions at Risk in Relation to Inventory.
|13
|3347
|358

Assessing the Assumptions Used in Auditing and Assurance Services
|16
|3823
|227

Audit and Assurance - Case Study
|10
|2982
|26