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ACC707 Auditing and Assurances Assignment

   

Added on  2020-05-28

11 Pages3019 Words77 Views
Running head: AUDITING AND ASSURANCEAuditing and Assurance Name of the StudentName of the UniversityAuthors NoteCourse ID

1AUDITING AND ASSURANCETable of ContentsIntroduction................................................................................................................................2Areas of higher assessed risk of material misstatement and risk as per ASA 315.....................2Significant judgement of auditor relating to areas of financial report involving importantmanagement judgement.............................................................................................................4Effect on the audit of significant transactions which took place during the period...................6Conclusion..................................................................................................................................7References..................................................................................................................................9

2AUDITING AND ASSURANCEIntroductionAuditor’s judgements relating to areas of financial report is considered withsignificant management judgement along with the development of the New Standard forAuditing and the significant role or purpose of Auditing standard as per “ASA 701 involvingKey Audit Matters in the Independent Auditor’s Report”. Current research has decided therationale of the audit standard to ensure consistent representation of the Australian equivalent“ISA 701”. The implementation and introduction of “ASA 701” is illustrated as per the“AUASB’s” obligation to confirm with the present enhancements based on the auditor’sreport which in conformity with “International Auditing and Assurance Standards”. Some ofthe key issues needs to be facilitated by the implementation of the ASA 701 standards.The communication of the KAM is considered to be within the possibility of theauditor’s report based on the present and well listed entities. The new standards have aimed atassisting the auditors on deciding to include the “KAM” within the auditor’s report. Theformation of the new standard involves the guidelines prescribed in Amcor Limited (Carson,Fargher and Zhang 2016). Areas of higher assessed risk of material misstatement and risk as per ASA 315The main considerations of “A31 under Auditing Standard ASA 315”, includesinvolvement of the nature of revenue sources, markets including the risks of the electroniccommerce, sales and marketing. Several other risk factors are considered as per jointventures, alliances and outsourcing activities, industry segmentations and geographicdispersions. Based on the financial report analysis of “Amcor Limited”, the business facessignificant risk relating to the cost and availability of the funds to meet the business needs,movement in the foreign exchange rate and interest rate (Sun et al. 2017). A large share ofAmcor’s business report creates potential exposures in terms of the total incomes and net

3AUDITING AND ASSURANCE“asset values” based on the instability in the exchange rate of the Euro with US dollar. Therisk factors associated to Mergers and acquisition (M&A) risks, is viewed in terms of thefailure to be controlled in the selection of effective integration which has focused oncapturing value and the impact it may have on the operations along with the consequences ofthe expected financial benefits (O’Donnell, Hicks, Streeter and Shantapriyan 2015). Thegeographic risks are viewed as the country risks with the company operating across 40countries. This is seen along with broad array of “political, legal, regulatory and politicalsystems which may be subject to rapid changes pertaining to civil unrest”. The profitability ofthe company related to the operations and the ability to maintain and repatriate the funds toAmcor may affect adversely by the changes pertaining to the fiscal or regulatory regimes.The impact of this has been evident with the variations in the fiscal and controlling regimes,difficulties in interpreting and fulfilling with the local laws of those countries and “setback ofthe administrative, judicial or political judgements” (Carson, Fargher and Zhang 2016).As per the depictions made in “Auditing Standard ASA 315” based on the“Conditions and Events That May Indicate Risks of Material Misstatement” includes thesupply chain risk, volatility of markets. Based on the“A13 under Auditing Standard ASA315” the risk factors are associated to the matters related to the noncompliance and theapplicable laws. Some of the other risk factors are taken into attention with the deficiency inthe internal control over the financial reporting. The supply risk in Amcor is depicted with thedisruption in the “Amcor’s supply chain” for interruption in accessibility of the keycomponents and raw materials. This is further viewed in terms of adverse impact on the priceof raw materials and failure in the technology which may have an effect on the price of theraw materials, customer relations, sales volume and resulting unexpected costs. Thesignificant nature of the disruption of supply chain risk of Amcor is viewed with theavailability of the key components and the raw material which is seen with the technology

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