Audit and Assurance

Running head: Audit and Assurance
Audit and Assurance
Name of the Student
Name of the University
Author Note

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Audit and assurance
Executive Summary
The report deals with the audit and internal control of the company. In question no 1 it has
recorded about how the company perform the audit and how the audit help the financial user
of the company. It also include the concept of the going concern and how the company going
concern is checked by the auditor. It also take into consideration the risk related to material
misstatement and how it affect the company financial position. In question no 2 contains
details of internal control system and how the company manage its internal control system. It
also show the different weakness of control system and how the company can overcome
those weakness.

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Audit and assurance
Table of Contents
Question No 1............................................................................................................................4
Introduction............................................................................................................................4
Discussion..............................................................................................................................4
Overview of the company and industry background.........................................................4
Going Concern related to the company..............................................................................5
Brief Financial Analysis.....................................................................................................5
Risk of Material Misstatement...........................................................................................6
Assertions of each account mentioned above....................................................................7
Conclusion..................................................................................................................................8
Answer to 2................................................................................................................................8
Introduction............................................................................................................................8
Discussion..............................................................................................................................9
Ten control weakness in the purchase and payment method of the Sweets R Us Pty ltd
are:......................................................................................................................................9
Assertions regarding different balance affecting by control weakness............................10
Recommendation regarding the control improvement of above 10 weakness are...........11
Conclusion............................................................................................................................11
Answer No 3............................................................................................................................12
Part 1....................................................................................................................................12
Control must be tested or not...........................................................................................12

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Audit and assurance
Part 2....................................................................................................................................12
Justification of above mention points regarding the control............................................12
Reference and Bibliography.....................................................................................................14
Appendix..................................................................................................................................16

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Audit and assurance
Question No 1
Introduction
Audit is the procedure which help the financial user to know about whether the
financial statement of the company is showing true and value or not (Agyei-Mensah 2016). It
help the financial user to know how the company is performing in the industry and how there
are doing in the business. It is done by both internal as well as external individual. If an
internal individual does the audit it called internal audit, it is done to know the weakness
which are there in the business and how the company can overcome those business and the
external audit is done by the individual named auditor it check all the financial books of the
company and give their opinion regarding the financial statements of the company (Aziz et al
,. 2015). Assurance is the process in which the management provides accurate and current
information to the stakeholders related to the efficiency and effectiveness of the operations
and the status of the compliance in regard with the statutory obligations. This help the
company to know about the real information regarding the financial information and it also
help the company to know the position of them in the current market structure (Badolato,
Donelson & Ege 2014).
Discussion
Overview of the company and industry background
The assignment is based upon the company name Daily Logistics Limited, which is a
cargo and logistics based company. The company was founded in 2010 which was done by
the merger of two different companies. The services which the company provide is that it
transport iron ore, minerals sand and forestry products. Even it transport some other products
such as agriculture products, oil and gas and even lithium to different places. Diversification
of the business is done by providing services like warehouse services to different importer

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Audit and assurance
and exporter. It also building a large hub complex in Sydney and after complication of the
hub it will one of the best services provider regarding the warehouse service in the country
and it will able to provide the service to big importer and exporter of the country. The
industry is which the company deals is a transport industry and it provide services related to
transfer of different product across the country and it also include service related to the
warehousing of the products and it also provide warehouse services.
Going Concern related to the company
Going concern is the assumption that business entity will remain in the business for
perpetual period (Balsam, Jiang & Lu 2014). It is meant that the entity will not getting closed
its business soon and it will run it business for more number of years.
Going concern as per background of the company is the company is a logistics
company, so the demand of the industry is increasing in the present and future demand so the
company will able to get business and as a result in will get its business so the company will
be always going to do its business as per the industry norms.
Going concern as per the financial analysis is that it can see from the trend analysis of
the income statement of the company is that the sales of the company has increased in the
current year so it yearly indicates that the company is getting more number of the business
compare to the previous year. As per the Profit before income tax it is also increased in the
current year so it can said that the company is having a good business and earning better
profit in compare to previous year so there is no option that the company will get closed soon
as it increase the profit of the company.
Brief Financial Analysis
The calculations are given in the appendix of the report and from there all the details
regarding the calculations can be obtained is that the total non-current asset of the company