ACC 707 Auditing and Assurance Services Individual

Running head: AUDITING AND ASSURANCE SERVICES
Auditing and Assurance Services
Name of the Student
Name of the University
Author’s Note

1AUDITING AND ASSURANCE SERVICES
Table of Contents
Introduction......................................................................................................................................2
First Question...................................................................................................................................2
Requirement A.............................................................................................................................2
Requirement B.............................................................................................................................3
Requirement C.............................................................................................................................4
Second Question..............................................................................................................................5
Requirement A.............................................................................................................................5
Requirement B.............................................................................................................................6
Requirement C.............................................................................................................................7
Conclusion.......................................................................................................................................8
References......................................................................................................................................10

2AUDITING AND ASSURANCE SERVICES
Introduction
The application of different techniques and processes of auditing helps the auditors in
gaining knowledge about the presence of any kind of material missstements in the financial
reports and statements of their client organizations. For this reason, the process of auditing
involves the inspection of all the required financial statements and reports of the companies.
More specifically, the need for the auditors is the examination of the assertions used by the
management of the client companies while preparing the financial statements and reports
(Louwers et al. 2015). The managements of the business organizations make some inherent and
unambiguous claims at the time to prepare the financial statements and reports; and these claims
are called the assertions. The responsibility of the auditors lies in expressing any risks in the used
assertions as the key audit matters and conduct the required substantive audit procedures to
minimize these assertion related risks. In Australia, the auditors have the obligation of following
the principles and standards of ASA 701 Communicating Key Audit Matters while examining
the used audit assertions.
First Question
Requirement A
As per the provide information of Computing Solutions Limited (Computing Solutions),
Completeness and Accuracy are the two management assertions at risk and the following part
shows the discussion:
Completeness

3AUDITING AND ASSURANCE SERVICES
This assertion puts the obligation on the company’s management to keep record of the
information of the inventory transactions in the relevant financial statements and failure in doing
so can lead to major material missstements in the financial statements. Not recording to the
purchased inventory in the relevant inventory book is an example of the risk in this assertion
(Kharisova and Kozlova 2014). The presence of ineffective internal control is the major reason
for the occurrence of risk in this assertion. In case of the situation of Computing Solutions, there
might be the presence of wrong accounting of inventory of the company that led to the inclusion
of 18 percent sales of 2014 in the inventory of 2018. This sends the indication of wrongness in
the inventory treatments in Computing Solutions.
Accuracy
This particular assertion helps the managements of the companies to identify the errors in
the process of inventory management. According to the rule of this assertion, it is the
responsibility of the managements of the companies to conduct effective physical count of the
inventory with the aim to make sure the presence of correct number of inventory (AICPA 2018).
According to the information of Computing Solutions, the business inventories of Computing
Solutions have been moved to six diverse regional warehouses from the central warehouse in
March 2017. This whole process to move the inventory might result to the incorrect
mathematical count of the inventory by the responsible personnel. The presence of any mistake
in the mathematical count of the inventories can lead to the reduction in the ration of inventory
turnover to 3.8 in the year 2018 from 5.2 in the year 2017 (Bumgarner and Vasarhelyi 2018).