Auditing and Assurance Services

Running head: AUDITING AND ASSURANCE SERVICES
Auditing and Assurance Services
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1AUDITING AND ASSURANCE SERVICES
Executive Summary:
The objective of the report is to take into account the evaluation of the audit assertions associated
with inventory and property, plant and equipment for the two provided organisations. In order to
ascertain the key audit matters, the auditors have to bear the responsibility of taking into account
the evaluation of the assertions that the management has used at the time of developing the
financial statements. In accordance with the above discussion, the risk assertions identified for
Advanced Computer Solutions Limited include valuation or accuracy and cut off. For Green
Machine Limited, the identified risk assertions mainly constitute of accuracy in separating the
revenue and capital expenditures along with accurate valuation of property, plant and equipment.
It could be evaluated that choosing the substantive audit processes entirely rely on the kinds of
audit assertions, which are at risk. Finally, it is crucial for the auditors to take into account the
compliance with the guidelines laid down in ASA 701 when they ascertain the key audit matters.

2AUDITING AND ASSURANCE SERVICES
Table of Contents
Introduction:....................................................................................................................................3
Question 1: Advanced Computer Solutions Limited.......................................................................3
Requirement (a):..........................................................................................................................3
Requirement (b):..........................................................................................................................5
Requirement (c):..........................................................................................................................6
Requirements of ASA 701:..........................................................................................................6
Rationale for determination:........................................................................................................6
Disclosure of key audit matters as per ASA 701:........................................................................7
Question 2: Green Machine Limited...............................................................................................8
Requirement (a):..........................................................................................................................8
Requirement (b):..........................................................................................................................9
Requirement (c):........................................................................................................................10
Requirements of ASA 701:........................................................................................................10
Rationale for determination:......................................................................................................10
Disclosure of key audit matters as per ASA 701:......................................................................11
Conclusion:....................................................................................................................................12
References:....................................................................................................................................14

3AUDITING AND ASSURANCE SERVICES