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 current reports intends to investigate two different cases of Advanced Computer Solutions
Limited and Green Machine Limited for detecting assertions at risk, applying substantive audit
procedures along with disclosing the same. It has been analysed that the auditors need to identify
the assertions at risk along with disclosure of adequate information regarding the rationales by
taking into account the key audit matters. Moreover, it has been found that various assertions are
at risk for the provided organisations associated with PPE and inventory valuation like
completeness, valuation and accuracy. Finally, the auditors are required to comply with the
norms mentioned under ASA 701 so that they could explain their stand of choosing the key audit
matters by adhering to the required guidelines. Therefore, the key audit matters are considered as
a crucial aspect in the auditor’s report.

2AUDITING AND ASSURANCE SERVICES
Table of Contents
Introduction:....................................................................................................................................3
Question 1: Advanced Computer Solutions Limited.......................................................................3
Key assertions at risk:..................................................................................................................3
Substantive audit procedures:......................................................................................................5
ASA 701 Key Audit Matters:......................................................................................................5
Question 2: Green Machine Limited...............................................................................................7
Key assertions at risk:..................................................................................................................7
Substantive audit procedures:......................................................................................................8
ASA 701 Key Audit Matters:......................................................................................................9
Conclusion:....................................................................................................................................11
References:....................................................................................................................................12

3AUDITING AND ASSURANCE SERVICES
Introduction:
Audit is defined as the method where the auditors are liable in applying analytical
processes on the financial reports of the organisations so that there could be identification and
reporting of material misstatements. In this method, the auditors have to take into account
different aspects like assertions used by the management of an organisation for preparing and
depicting the financial statements (Arens et al. 2015). The management considers such assertions
as implicit or explicit claims. However, the auditors have found instances on certain occasions,
in which risks are detected in the assertions associated with material misstatements. Thus, the
auditors are required to investigate such assertions so that risks could be identified. Moreover,
for analysing the assertions, there are different standards and regulations to be followed by the
auditors; as such regulations provide the guidelines for identifying the assertions at risk along
with communicating the same (Brown-Liburd and Zamora 2014). The current reports intends to
investigate two different cases of Advanced Computer Solutions Limited and Green Machine
Limited for detecting assertions at risk, applying substantive audit procedures along with
disclosing the same.
Question 1: Advanced Computer Solutions Limited
Key assertions at risk:
By evaluating the situation of the organisation, the auditor could gather knowledge
regarding two assertions at risk, which include accuracy and completeness. The primary reasons
are listed as follows:
Accuracy: