Audit and Assurance: Strengths and weaknesses of Decca's control environment

AUDIT AND ASSURANCE

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
QUESTION 1...................................................................................................................................1
Strengths and weaknesses of Decca’s control environment........................................................1
QUESTION 2...................................................................................................................................3
a) Information affecting the nature, timing and the extent of test of control...............................3
b) Test of controls........................................................................................................................4
QUESTION 3...................................................................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Audit and assurance can be referred to as professional services that are provided by
certified Chartered Accountants of the country. These services are in relation to examining the
accuracy of financial statements of the company and notifying that whether these financial
statements represent a true and fair view in relation to the financial health and well-being of the
enterprise. The auditing principles and procedures are applied to the financial statements so that
it can be ensured that they are free from material misstatements and any kind of compliance
errors. In the current project the auditing principles shall be applied to the various case studies in
order to provide a solution to the companies under consideration such that they can improve the
scenario through better internal control management and policies.
MAIN BODY
QUESTION 1
Strengths and weaknesses of Decca’s control environment
Decca Ltd which is a diversified manufacturer operating in various divisions has an
internal control environment which has some positive as well as some negative sides which are
impacting the financial performance of the business. These strengths and weaknesses of the
control environment are quoted below :-
Strengths
 One of the major strengths is that the head office management of the company has very
high integrity and so performs the business with due diligence complying with the
necessary lawful requirements.
 Another major positive aspect of the company is that it employs highly competent staff
who are qualified to perform all their duties and responsibilities for the organization. The
work that is delegated is performed with high efficiency by the employees fulfilling the
targets of the business (Boiral, Heras-Saizarbitoria, Brotherton and Bernard, 2019).
 The internal control environment stays monitored and governed as proper ethical code of
conduct is defined by the management and all the policies are formulated in accordance
with it.
 The policy of providing employee compensation on the basis of financial performance of
the company helps in motivating the employees o perform better generating higher results
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