logo

Audit and Assurance- Assignment

   

Added on  2021-04-24

26 Pages5526 Words26 Views
Running head: AUDITING AND ASSURANCE IN AUSTRALIAAuditing and Assurance in AustraliaUniversity NameStudent NameAuthors’ Note

2AUDITING AND ASSURANCE IN AUSTRALIAExecutive summaryThe study at hand illustrates in detail concerning audit risk that necessarily shows the way to the detected issue that is met by assessor while analysing material misstatement. In essence, this may perhaps occur by reason of error or else scam. In essence, this section can help in thorough analysis of diverse risks of business by undertaking careful and due analysis of important financial ratio. In essence, this can aid in obtaining a quick suggestion of health along with financial aspects of the corporation. Furthermore, this study also has the intention to assist the management in the process of identifying along with weaknesses of the enterprises and support different initiatives and development of stratagems. The selected corporation TCW is considered for undertaking analysis in the report particularly for the present case of auditing.

3AUDITING AND ASSURANCE IN AUSTRALIATable of ContentsTask 1A................................................................................................................................3Task 1B:...............................................................................................................................9Task 2A..............................................................................................................................15Task 2B..............................................................................................................................20References..........................................................................................................................22

4AUDITING AND ASSURANCE IN AUSTRALIATask 1AEvaluation of key financial ratio points out towards analysis of financial pronouncement that is used to realize financial health of enterprises of entity. According to the given case on “Trunkey Creek Wines Limited”, there are different accounts that need to be analysed founded on important financial ratio (considering expenditure on marketing, receivables of a bank and assets/ property along with investments). The present segment concentrates on the audit that the assessor might face while recognizing material misstatement in pecuniary assertions and suggests stages of audit that need to be undertaken to lessen audit risk. Nonetheless, this might possibly occur because of error (deliberate/unintentional mistake). The table mentioned below presents appropriate evaluation of accounts of the firm TCW and detects diverse risks linked to firm’s audit and the steps to reduce the acknowledged risk. Analysis:Account Analysis Audit riskAudit steps to reduce riskAccounts receivablesAccounts receivable can be considered to be specific amount that the customers owe tothe company TCW (Gay & Simnett, 2005). Particularly, itcan be hereby observed from the Based on the analysis it can be hereby stated that products marketing by the firm TCW is carried out on particularly system ofcredit. Therefore, the credit system adds a significant risk on The accounts receivables whose numbers of days are increasing should be regularly viewed and the same should be discussed with the management (Weirich et al., 2017). Any

5AUDITING AND ASSURANCE IN AUSTRALIAabove mentioned table days in accounts receivable for particularly wine and beef production declined to 36 from the level of 60.65 respectively. The total days of outstanding invoices of firm’s customers reflects efficiency of the company in this regard (Gay & Simnett, 2005). Nevertheless, it can be hereby observed that during this specific period, overall value has decreased for firm’s wine section and on the other hand the same has enhanced for beef production part of disbursementsmade by the clientele. In essence, it can be hereby evaluated that there subsist a particular risk associated to completeness and this essentially reflects the risk associated to completeness. Weirich et al. (2017) suggests that risk linked to completeness refers to the fact that particular accounts might perhaps not present documentation properly and register the accounts in a proper way. allowance for the provision of doubtful debt should not be done without the approval by upper level management (Hay et al., 2014). In addition to this, the process of credit approval should be reviewed.

6AUDITING AND ASSURANCE IN AUSTRALIA(Mala & Chand, 2015). Investments The status of investment of the business concern can be suitably evaluated by important financial ratio of overall number of times corporation earns interest from itsinvestment (Louwerset al., 2015). During the period 2016, the interest accepted by the firm was registered to be 8.10. However, during the period 2017, it was recorded to be 7.51. Therefore, it can be hereby mentioned that investment for the firm TCW has enhanced It is necessary forsponsors to pay off for different investments in a veryplanned way in case if the risk level linked to investment is quite high (Knechel & Salterio,2016). In essence, firm’s working capital is influenced by the total risks related to investments undertaken. It is essential for auditors to undertake thorough evaluation regarding the investments carried out by the firm TCW.The auditors have theneed to check whether they are carrying out investments that essentially has reduced the corporation’s time interest earned. Particularly, investments need to be tracked by the management as an essential part of firm’s functioning (Krahel & Titera, 2015).

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Auditing and Assurance in Australia
|22
|4563
|157

Auditing and Assurance in Australia
|21
|5541
|439

Auditing and Assurance
|20
|4919
|304

Auditing Theory and Practice
|16
|3697
|54

Auditing Theory and Practice
|18
|4452
|202

Auditing Theory and Practice - Risk Analysis and Financial Ratio Evaluation
|19
|4649
|473