Auditing and Assurance Services: A Comparative Study

Running head: AUDITING AND ASSURANCE SERVICES
Auditing and Assurance Services
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1AUDITING AND ASSURANCE SERVICES
Executive Summary:
The present study aims at evaluating risk assertion of two different organisation with the
application of substantial audit process. The interpretation of facts gathered from Advanced
Computer Solutions, shows that the auditor is able to identify the two important risk assertions
such as accuracy and completeness. The overall findings of the study have also found that it is a
responsibility of the auditors to carry out substantive audit process in order to ascertain the
material risks associated to the company. The risk assessment pertaining to material
misstatement for both the corporations is done as per the guidelines of ASA 701. It is the
responsibility of the auditor for fetching key information for significant incidents which will
contribute to KAM.

2AUDITING AND ASSURANCE SERVICES
Table of Contents
Introduction:....................................................................................................................................3
Answer to Question 1: Advanced Computer Solutions...................................................................3
1.1 Significant declarations at risk associated to inventory:........................................................3
1.2 Practical audit procedures for each identified risk:...............................................................5
1.3 Necessity of ASA 701 Communicating Key Audit Matters:.................................................6
1.4 Rationale for selection of key audit matters:.........................................................................6
1.5 Documentations relevant with ASA 701:..............................................................................7
Answer to Question 2: Green Machine Limited..............................................................................7
2.1 Significant declarations at risk associated to PPE:................................................................7
2.2 Practical audit procedures for each identified risk:...............................................................8
2.3 Necessity of ASA 701 Communicating Key Audit Matters:.................................................9
2.4 Rationale for selection of key audit matters:.......................................................................10
1.5 Documentations relevant with ASA 701:............................................................................10
Conclusion:....................................................................................................................................11
References......................................................................................................................................12

3AUDITING AND ASSURANCE SERVICES
Introduction:
In general, audit comprises of a group of procedures through which accountability is
relied on auditors pertaining to application of analytical methods on the financial statements for
the purpose of identifying material misstatements. It is the responsibility of the auditors for
taking note of the time taken for conducting audit operation such as organisations using only
assertions for developing financial reports. These assertions may be further regarded in form of
explicit or implicit claims for the management in order to develop and represent financial
statements.
In some instances, auditors have responded to the risk assertions as per material
misstatements. Therefore, the auditors are required to investigate such assertions for checking
whether they are having any significant risk. At the time of audit assertion, specific standards
and guidelines are necessary for auditors as they are able to provide a systematic guideline in
order to depict the risk involved in managerial misstatement along with appropriate
communication of the same. The present report aims at evaluating the detecting the risks
involved in audit assertion and apply necessary audit process along with disclosure (Simunic and
Zhang 2017).
Answer to Question 1: Advanced Computer Solutions
1.1 Significant declarations at risk associated to inventory:
As per the depiction of given scenario, the auditor can identify two main assertions at risk
which are seen with completed nose and accuracy. The rationale for such risk is stated below as
follows: