Audit and Assurance: Procedures and Assertions for Effective Financial Reporting

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Running head: AUDIT AND ASSURANCE
AUDIT AND ASSURANCE
Name of the Student
Name of the University
Author’s Note

1AUDIT AND ASSURANCE
Table of Contents
Introduction......................................................................................................................................2
1 (a)..................................................................................................................................................2
1 (b)..................................................................................................................................................3
1 (c)..................................................................................................................................................5
2 (a)..................................................................................................................................................6
2 (b)..................................................................................................................................................7
2 (c)..................................................................................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

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Introduction
The process of auditing is important for any organization for ensuring that the financial
activities that are being undertaken and executed by any organization is up to the mark and is
able to maintain transparency being abided by the protocols of accounting standards (Averhals et
al. 2018). The paper reflects the procedures of auditing as well as the auditing assertion that best
suits the discussed cases based on the requirements needed for effectively executing audit in the
particular cases.
1 (a)
In case of Advanced Computer Solutions Limited the risk associated can be audited and
appropriate response can be incorporated. There are various assertions related to the risk in
relation to the property, plant and equipments among which there are completeness, existence,
rights and obligations as well as valuations, etc. The transaction level assertions are as follows:
Accuracy – this relates to the amount of transactions that are been recorded without any errors.
Classification – When all the transactions are been recorded within the general ledger in the form
of current accounts is incorporation in this transaction level of assertions.
Completeness - Completeness relates the aspects of the business activities for which the
company was subjected are being recorded (Gist et al. 2015).
Occurrence – The assertion takes under consideration the fact that the transactions actually took
place.
Cutoff – This incorporates the assumption that all the transactions are being recorded with the
stipulated or correct recording period (Simetinger. 2018).

3AUDIT AND ASSURANCE
The assertions varies with respect to the financial statements undertaken. As for example
transaction level assertion relates to the income statement while the account balance assertion
relates to the balance sheet and that of the presentation and disclosure assertion relates to that of
the accompanying disclosures (Louwers et al. 2015). The risk related to these key assertions is
that the auditors cannot proceed further without obtainment of management assertions from the
senior managers along the managerial hierarchy that are related to the clients. If this managerial
assertion is not obtained then this reflects the fact that the management may have engaged in
fraudulence activities related to the accounting irregularities.
1 (b)
Based on the identified risks and the key assertions it can be incorporated that the
following audit procedures will be best suited for the company. They are as follows:
Analytical Review
The analytical review provides the better option in order to track the unusual transactions
that are related to that of the financial evidences or the events that undertook in order to
incorporate certain functional activities. In case of the company it is been found that there is
requirement for obtaining evidence related to that of the unusual transactions that have occurred
regularly (Griffiths. 2016). The reasonableness of depreciation is needed to be assessed that are
being recorded in the financial statements as they use to occur on a regular basis and should be
calculated systematically and hence analytical review should be better as well as substantive
audit procedure for monitoring the financial performance related to the transactions and track the
accounting irregularities.
Inquiry