Audit Control and Planning for Trunkey Creek Wines Ltd

Auditing

Audit control
Executive summary
When the processes of audit are properly explained and implemented, organizations develop
the strength to function effectively in such complicated environment. Therefore, pursuing
best audit techniques and measures are mandatory in addition to proper mechanisms of
internal control so that the material risks are mitigated. This report assists in focusing upon
the audit planning strategies of Trunkey Creek Wines Ltd. In relation to this, the auditing of
this organization has been undertaken by MYH (Miller Yates Howarth) that is an accounting
firm based in Australia. This report starts with the assessment part wherein ratio calculations
have been undertaken for the accounts that are depicted as listed by the audit partners.
Thereafter, this report focuses upon the audit risks, their assessment, and various steps that
can be undertaken to mitigate all material risks. Further, additional details of the company are
also accounted for so that the business risks can be evaluated. Lastly, the internal control
mechanisms, risk, and test control has been reflected in a table format. Nevertheless, there is
an inefficacy in the internal control mechanism of the company and the same has also been
highlighted.
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Audit control
Contents
Introduction...........................................................................................................................................3
1A. Evaluation of ratios..........................................................................................................................3
1B. Business risks that the company is more likely to encounter..........................................................6
2A. Internal control mechanisms...........................................................................................................7
2B. Justifications in relation to inefficacies in the internal control mechanisms.................................10
Conclusion...........................................................................................................................................13
References...........................................................................................................................................14
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Audit control
Introduction
Audit control and planning are two significant segments of evaluating the material risk of an
organization that allows it to sustain in the competitive environment. In this report, the prime
significant has been asserted on such auditing techniques and measures. Besides, through this
report, illustration of methodologies of risk management in addition with the part played by
internal control mechanisms has been done. Nevertheless, an audit plan has been framed and
thereafter, an audit process will be undertaken for the audit of financial statements. Overall,
in the light of the scenario, basic and mandatory legal measures have been accounted for and
the same has been discussed, thereby shedding light on the relevance of internal control
mechanisms (Manoharan, 2011). Internal control mechanism is important as it helps in
driving the organization in the desired direction.
1A. Evaluation of ratios
This report primarily focuses upon various segments like assessment of ratios together with
the material risks that are related to the business of the company so that an audit plan can be
framed for overall effectiveness. If the ratios are considered and an in-depth on the same is
done it helps in knowing the deficiency and the stage at which the business stands (Livne,
2015). In addition, the effectiveness in the mechanisms of internal control together with the
disadvantages associated to the scenarios must be properly discussed. Based on the
company’s information, the following is the evaluation of significant risks and ratios related
to the same.
Account Evaluation Audit risks Audit steps to
minimize the risks
Investments The times income
attained from the
investments has declined
when compared to the
past tenure.
In relation to
investment, the audit
risk is that the same
may be undervalued or
there may be a material
misstatement whilst
recording their value
because their interest
has declined over the
The auditor must
scrutinize the reason
for a decline in the
earned interest.
Nevertheless, these
investments must be
tested in relation to
their disposal. In case,
the same has been
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