Auditing and Assurance Services
Added on 2023-04-22
16 Pages3847 Words409 Views
Running head: AUDITING AND ASSURANCE SERVICES
Auditing and Assurance Services
Name of the Student:
Name of the University:
Author’s Note:
Course ID:
Auditing and Assurance Services
Name of the Student:
Name of the University:
Author’s Note:
Course ID:
1AUDITING AND ASSURANCE SERVICES
Executive Summary:
The current report would evaluate two cases of two different organisations for detecting assertion
risks, application of substantive audit processes along with disclosure of the same. By analysing
the scenario of advanced Computer Solutions, the auditor could identify two assertions at risk,
which mainly include completeness and accuracy. The auditors are responsible for carrying out
accurate substantive audit processes after identifying the assertions at risk and the situation is
observed to be similar for Advanced Computer Solutions Limited. The auditor associated with
Green Machine Limited has to take into account two guidelines mentioned in ASA 701. The
auditor has to provide the information regarding significant incidents and events making
contributions towards the creation of key audit matters.
Executive Summary:
The current report would evaluate two cases of two different organisations for detecting assertion
risks, application of substantive audit processes along with disclosure of the same. By analysing
the scenario of advanced Computer Solutions, the auditor could identify two assertions at risk,
which mainly include completeness and accuracy. The auditors are responsible for carrying out
accurate substantive audit processes after identifying the assertions at risk and the situation is
observed to be similar for Advanced Computer Solutions Limited. The auditor associated with
Green Machine Limited has to take into account two guidelines mentioned in ASA 701. The
auditor has to provide the information regarding significant incidents and events making
contributions towards the creation of key audit matters.
2AUDITING AND ASSURANCE SERVICES
Table of Contents
Introduction:....................................................................................................................................3
Question 1: Advanced Computer Solutions....................................................................................3
1.1 Key assertions at risk in relation to inventory:......................................................................3
1.2 Substantive audit procedures for each identified risk:...........................................................5
1.3 Requirement of ASA 701 Communicating Key Audit Matters:...........................................6
1.4 Reasons behind the selection of key audit matters:...............................................................6
1.5 Disclosures in accordance with ASA 701:............................................................................7
Question 2: Green Machine Limited...............................................................................................7
2.1 Key assertions at risk in relation to inventory:......................................................................7
2.2 Substantive audit procedures for each identified risk:...........................................................9
2.3 Requirement of ASA 701 Communicating Key Audit Matters:.........................................10
2.4 Reasons behind the selection of key audit matters:.............................................................11
2.5 Disclosures in accordance with ASA 701:..........................................................................11
Conclusion:....................................................................................................................................12
References:....................................................................................................................................13
Table of Contents
Introduction:....................................................................................................................................3
Question 1: Advanced Computer Solutions....................................................................................3
1.1 Key assertions at risk in relation to inventory:......................................................................3
1.2 Substantive audit procedures for each identified risk:...........................................................5
1.3 Requirement of ASA 701 Communicating Key Audit Matters:...........................................6
1.4 Reasons behind the selection of key audit matters:...............................................................6
1.5 Disclosures in accordance with ASA 701:............................................................................7
Question 2: Green Machine Limited...............................................................................................7
2.1 Key assertions at risk in relation to inventory:......................................................................7
2.2 Substantive audit procedures for each identified risk:...........................................................9
2.3 Requirement of ASA 701 Communicating Key Audit Matters:.........................................10
2.4 Reasons behind the selection of key audit matters:.............................................................11
2.5 Disclosures in accordance with ASA 701:..........................................................................11
Conclusion:....................................................................................................................................12
References:....................................................................................................................................13
3AUDITING AND ASSURANCE SERVICES
Introduction:
The auditors need to take into account various aspects at the time of carrying out audit
operations such as assertions that the management of an organisation use for developing
financial statements (Cohen and Simnett 2014). Such assertions could be considered in the form
of implicit or explicit claims on the part of management in order to develop and represent the
financial statements. At the time of assessing the audit assertions, there are presence of various
standards and guidelines necessary for the auditors to follow, since these standards deliver them
with the essential guidelines for identifying assertion risks along with communicating the same
(Junior, Best and Cotter 2014). The current report would evaluate two cases of two different
organisations for detecting risks related to assertions, use of substantive audit processes and
accordingly, disclosures need to be made.
Question 1: Advanced Computer Solutions
Audit assertions are those that are claimed explicitly or implicitly accountable in order to
prepare financial statements along with their feasibility and transparency.
1.1 Key assertions at risk in relation to inventory:
By analysing the scenario of advanced Computer Solutions, the auditor could identify
two assertions at risk, which mainly include completeness and accuracy. The reasons behind
such identification are enumerated briefly as follows:
Completeness:
Introduction:
The auditors need to take into account various aspects at the time of carrying out audit
operations such as assertions that the management of an organisation use for developing
financial statements (Cohen and Simnett 2014). Such assertions could be considered in the form
of implicit or explicit claims on the part of management in order to develop and represent the
financial statements. At the time of assessing the audit assertions, there are presence of various
standards and guidelines necessary for the auditors to follow, since these standards deliver them
with the essential guidelines for identifying assertion risks along with communicating the same
(Junior, Best and Cotter 2014). The current report would evaluate two cases of two different
organisations for detecting risks related to assertions, use of substantive audit processes and
accordingly, disclosures need to be made.
Question 1: Advanced Computer Solutions
Audit assertions are those that are claimed explicitly or implicitly accountable in order to
prepare financial statements along with their feasibility and transparency.
1.1 Key assertions at risk in relation to inventory:
By analysing the scenario of advanced Computer Solutions, the auditor could identify
two assertions at risk, which mainly include completeness and accuracy. The reasons behind
such identification are enumerated briefly as follows:
Completeness:
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