Audit Planning and Control: Trunkey Creek Wines Limited

Auditing & Assurance
Services

Audit control
Executive Summary
An organization can function smoothly when the audit procedure is well defined and meets
the standards. Hence, it is vital for the organization to have strong audit techniques followed
by an effective internal control mechanism that helps to steer the business. In this report, the
major emphasis is on the audit planning of Trunkey Creek Wines Limited for the year ended
30 June 2018. The audit planning is done by Miller Yates Howarth (MYH), an accounting
firm and the second largest regional accounting firm in Australia. The report proceeds with
the evaluation part where the computation of the ratio is done for the accounts that are listed
by the audit partners and it is followed by the evaluation, audit risk, and audit steps to lessen
the risk. Apart from ratio computation, additional information is procured to assess the
business risk that is faced by Trunkey Creek Wines (TCW). Further, another part deals with
the control mechanism, risk control, and test control is projected in a tabular format.
Moreover, the weakness in the internal control is highlighted for the contract payroll.
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Audit control
Contents
Introduction...........................................................................................................................................3
1A- Ratio Analysis.................................................................................................................................3
1 B - Business risks that TWC is likely to face.........................................................................................7
2A – Internal Control.............................................................................................................................8
2b – Justification of the weakness in Internal control.........................................................................10
Conclusion...........................................................................................................................................12
References...........................................................................................................................................13
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Audit control
Introduction
Audit planning and control can be said to be the major tool for the company in terms of risk
assessment and evaluation. In this report, the major emphasis is on the auditing tool and
techniques. Further in the report, the demonstration of risk management methodologies
together with the role of internal control will be done. Moreover, an audit plan will be
designed and audit procedure will be conducted for the financial statement audit. In the light
of the case, ethical practice will be highlighted and the same will be put to discussion. In
short, development of a strong series of audit steps will be developed to evaluate the
importance of internal control.
1A- Ratio Analysis
Audit planning in Trunkey Creek Wines (TCW)
The report stresses upon the major domains like ratio evaluation, as well as risks pertaining to
the business that helps in conducting the company’s audit plan. Further, the efficiency in the
internal control together with the pitfalls pertaining to the case needs to be discussed.
As per the information provided about the company, following is the analysis of the ratios
and the potential audit risks associated:
Account Analysis Audit Risk Audit Steps to
reduce risks
Accounts Receivable The number of days
of collection of debts
has increased
substantially in the
year 2018 in
comparison to the
year 2017 and year
2018.
The bad debts or
uncollectible debts
can show a false
impression of the
company’s
performance. The
aging of debtors can
be misled by the
company as well.
The aging register of
the debtors should be
verified by the
auditors.
The bad debts should
be cross-checked
with the allowances
for bad debts as
approved by the
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