Audit Planning Assignment

Added on - Apr 2020

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AuditName of the Student:Name of the University:Authors note:
Table of Contents1. Audit planning:............................................................................................................................31.1. Analytical review:.....................................................................................................................31.2. Preliminary judgment of materiality:........................................................................................42.0 Frist account selected:................................................................................................................42.1 Rationale for selection:..............................................................................................................42.2 Assertion and explanation:........................................................................................................42.3 Recommended Audit procedure:...............................................................................................43.0 Second account selected:...........................................................................................................53.1 Rationale for selection:..............................................................................................................53.2 Assertion and explanation:........................................................................................................54.0 Third account selected:..............................................................................................................64.1 Rationale for selection:..............................................................................................................65.0 Fourth account selected:............................................................................................................65.1 Rationale for selection:..............................................................................................................65.2Assertation and explanation:.......................................................................................................75.3 recommended audit procedure:..................................................................................................76.0 Fifth account selected:...............................................................................................................76.1 Rationale for selection:..............................................................................................................76.2 Assertion and explanation:........................................................................................................76.3 Recommended audit procedure:................................................................................................87.1 Sixth account selected:..............................................................................................................87.1 Rationale for selection:..............................................................................................................87.3 Assertion and explanation:........................................................................................................87.3 Recommendation audit procedure:............................................................................................88.0 Seven account selected:.............................................................................................................88.1 Rationale for selection:..............................................................................................................98.2 Assertion and explanation:........................................................................................................98.3 Recommended audit procedure:................................................................................................9Reference.......................................................................................................................................12
1. Audit planning:An innovative methods has been found in the process of auditing which enhances the auditingmethods and determines seven accounts at least in this process. Organization’s fluctuations indebit and credit items are being measured on the basis of the fluctuation model that has beenformed on the basis of the figures containing trail balance (Knechel and Salterio 2016). Selectionof seven accounts have been made in order to check the purpose of abnormal fluctuation incertain items and also helps to identify the cause of fluctuation. The percentage of fluctuation initems along the fluctuation in tribal balances of June 30, 2016 has been taken as a base.1.1. Analytical review:Analytical review shows the abnormal fluctuation in the present year by using differentmathematical and statistical techniques through fluctuation model, ratio analysis has also beenused to check the abnormal changes in liquidity or solidarity ratio of an organization along withthe abnormal change in profitability in an organization (Simnettet al.2016).A little increase of sale by mere of 0.83% in the year ending on June 30, 2017 from the saleof the previous year that belongs to the situation of Cerise Enterprise. However, at the same timethe sales have been increased by almost 10%, exactly 9.29% which amounts to $69500 from theamount $63595. Thus from the previous year 9% of the gross profit ratio of the organization hasplunged in the present year. Audit system professionally finds out the reason of the increase inthe profit in the audit system that they will be achieve.
1.2. Preliminary judgment of materiality:Here the materials has been arbitrated taking into consideration a definite percentage of item’samount to the total amount of revenue, liabilities, expenditures and asserts of items which isconcerned. Items are chosen according to income of the item and if the income is at least 5 % ofthe total revenue of the organization then such items are taken into consideration and acceptedotherwise no time and strategies are being misused on such times (Greeret al.2017).2.0 Frist account selected:Accounts receivable2.1 Rationale for selection:2.2 Assertion and explanation:In the account books there is an increased in almost 21% from the previous year whereaccounts is receivable and thus it should be audited properly in order to maintain the balances ofthe accounts.2.3 Recommended Audit procedure:As receivable ledger has increased in the substantial year that amounts to increase in 21%, that isa positive thing but at the same time, it has its disadvantages and concerning at the same time. Ifthere is increase in sale, which would corresponds to increase in the account receivable balancethat will be justified (Greenet al.2017). Thus when change-taking place in the accountsreceivable balance along with the amplification in the sale from the previous year’s the balances
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