Audit Theory and Practice

Running head: AUDIT THEORY AND PRACTICE
AUDIT THEORY AND PRACTICE
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AUDIT THEORY AND PRACTICE1
Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Business risks.........................................................................................................................2
Accounts under the risk of material misstatements................................................................3
Conclusion and Recommendation..............................................................................................4
References..................................................................................................................................6

AUDIT THEORY AND PRACTICE2
Introduction
This report titled “AUDIT THEORY AND PRACTICE” is prepared to provide the
preliminary information about the company to make the decision whether the firm should
consider the tender of the audit of the IOOF Group. IOOF Group is an Australian based listed
company. This is a financial service provider company of Australia and offers various
financial products and services like investment management, superannuation and financial
advices. The company was originally founded as the branch of an international friendly
society in 1864. After getting listing in the ASX in the year 2003, company has more than $
100 billion funds under management with more than 70 million customer to provide financial
advices (IOOF 2019). This report identifies and explain the three business risks that could
have impact on the audit of IOOF. Further, this report identifies and analyse the three account
that could be at risk of material misstatements. Lastly, this paper recommends that whether
the company full fill the requirements of ASX Corporate Governance or not.
Discussion
Business risks
Business risk are anything, which can lower the profits of the firm or leads the
organisation to fail. Business risks is the factor that effect the ability of the business to meets
its target or to achieve its financial goals (Sarasvathy, Simon and Lave 2018). While
analysing the annual report of the IOOF Group the followings the three key business risk,
which can influence the audit of the IOOF Group:-
Number of Advisor: - After buying ANZ’s OnePerth pension and investment nosiness and
four aligned dealer group while the OnePerth is straggling with their future. The four aligned
dealers also joined the IOOF in 2017. This merger make the IOOF the second largest
financial advisory company by the numbers of the advisors after the AMP. This growth in the