Auditing and Assurance

Running head: AUDITING AND ASSURANCE
AUDITING AND ASSURANCE
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Name of the university
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1AUDITING AND ASSURANCE
Table of Contents
Part A...............................................................................................................................................2
Question 1........................................................................................................................................2
Question 2........................................................................................................................................3
Part 2................................................................................................................................................4
Question 1........................................................................................................................................4
Question 2........................................................................................................................................4
Question 3........................................................................................................................................5
References........................................................................................................................................7
Appendix..........................................................................................................................................8

2AUDITING AND ASSURANCE
Part A
Question 1
In order to ensure that the statement of accounts have been prepared in the right manner
and to assure that the overall procedures and proceedings which are adopted by the firm are
appropriate in nature, it can be considered to be relatively important for the auditors to conduct
an analytical review on the financial statements in the planning phase (Arens, Elder and Mark
2012). The analytical review makes use of the audit technique which is then used to assess the
reasonable figures and balances as mentioned in the financial statements. Hence, in the given
section, the financial statements of Woolworths will be undertaken to understand the accuracy of
its statements.
Ratio Analysis
It can be largely understood that over the last few years, the group has been performing
considerably well. This can be understood largely through the metrics of Average Inventory
days, which was at a measure of 36.4 in the year 2013 and this increased to 38.3 in the year
2014. The average days can be stated to be at its maximum back in 2016 where the figure was
40.8 and in the year 2016, this came down to 36.6 which can be considered to be a decline which
was driven by the Australian and New Zealand food endeavours (Woolworthsgroup.com.au
2019). Moreover, in line of the revenue has gone a considerable change whereby it has increased
to 36,371$ in 2016 from $34798$. In the year 2018, the sales growth from the continued
operations can be largely understood to be 3.4% and the EBIT has increased by 9.5%
irrespective of the future benefits. There has also been a considerable increase in the dividend
trends of the firm which have now become 93 cents. The increase in the inventory can be

3AUDITING AND ASSURANCE
understood to be relatively consistent and in line of this, it has to be understood by the business
that, there have not been major defaults in the formation of the statements and hence, the
statements have been prepared accurately. Refer to Appendix
Question 2
Hence, after the analytical review for the financial statements was carried out, it can be
concluded that, the financial statements are being able to provide a good and fair view of the
overall financial status of the group and that the compliance with the Australian Accounting
Standards can be stated to be carried out effectively.
Hence, in order to ensure the continuity of the effectivity of the statements and the
efficiency of the same, the following procedures are being recommended for the firm:
1. Continue regular financing and identify as well as evaluate the risk of material
misstatement of the financial reports. This will help in the identification of any frauds or
error in the design of the financial statements.
2. They will also be required to conduct an understanding of the internal control which lies
relevant in the procedure of auditing and in line with this, design procedures like review,
which form the basis of data reliability, predictability (Knechel and Salterio 2016).
3. Moreover, continues, trend analysis, ratio analysis and reasonableness analysis are crucial
to conduct.
4. In addition to this, the auditing process will also involve communicating the overall
results of the analysis and related operational tasks to the different directors of the firm as
this will go a long way in ensuring that a firm will successfully able to undertake