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Risk Assessment in Auditing of Seven

   

Added on  2020-03-16

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Running head: AUDITING AND ASSURANCE IN AUSTRALIAAuditing and Assurance in AustraliaStudent’s Name:University Name:Author Note
Risk Assessment in Auditing of Seven_1

1AUDITING AND ASSURANCE IN AUSTRALIATable of ContentsIntroduction................................................................................................................................2Inherent Risk Assessment..........................................................................................................2Risk of Fraud..........................................................................................................................2Going Concern Risk...............................................................................................................3Risk Factor arising from Related Parties...............................................................................4Six Inherent Risks faced by Seven.........................................................................................4Control Risk...............................................................................................................................4References..................................................................................................................................6
Risk Assessment in Auditing of Seven_2

2AUDITING AND ASSURANCE IN AUSTRALIAIntroductionIn this study, the auditing of the Seven’s annual reports has been done in order tounderstand the different standards of risk associated with the different accounts. In more clearterms the inherent assessment of risk is conducted in accordance to the data provided in theannual report. The inherent risk assessment is also executed in order to provide a clear pictureof the financial condition of the entity as well as the liquidity position of the organization.The reason for conducting such an audit is that the loophole of the management policies andother procedures will be highlighted after conducting such an audit.Inherent Risk Assessment An inherent risk assessment is done periodically in order to recognize the potentialareas of risk that is areas where fraud could occur and the ways to mitigate them. An inherentrisk assessment consists of three key steps. Firstly the measure of fraud involved in thesystem of work or the locations of weakness that could be exploited by committinginfringement is judged. Secondly the ways in which a particular employee or member of theorganization may commit the fraud, that is the various methods in which the fraud might becommitted and thirdly the ways in which the fraudulent tasks committed can be covered up orconcealed. Risk of FraudThe risk of fraud is a major risk and takes up a large part of the auditing procedure.Identifying the exact areas where a particular employee can cover up his fraudulent activitiesand assessing the mindset of that particular employee so as to understand how and why he orshe committed such an unethical task really requires sincere effort on the part of the auditor.There are a number of identified areas of risk in the annual report of Seven. These are the
Risk Assessment in Auditing of Seven_3

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