Auditing and Ethics Question and Answers - Assignment

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Table of ContentsINTRODUCTION................................................................................................................................2MAIN BODY......................................................................................................................................3SECTION 1 Materiality Concept for Altium Limited..........................................................................3SECTION 2. Financial Analysis of Altium Limited........................................................................4SECTION 3 Cash Flow study..........................................................................................................7CONCLUSION....................................................................................................................................9REFERENCES.....................................................................................................................................9
INTRODUCTIONThe term Auditing is defined as a process of making detailed examination or observation of thefinancial statements, accounts, reports or records related to any business organization or company.Auditing process helps the stakeholders as well as investors of the company in seeking confidencerelated to the preparation of accounting reports and statements by ensuring that they are accurate,correct and reliable for making investment related decision. Auditor should always comply withapplicable rules and acts while conducting audit. Also, auditor should conduct its auditing functionin an ethical manner by complying with code of conduct. The present report is based on Auditingand Ethics norms related to Altium Limited which is an American, Australian domiciled ownedpublic software company which is engaged in business of PC based electronics design software forthose engineers who design the printed circuit boards. Report will discuss about materiality conceptand its relevant application in auditing procedure. Also, the report will provide financial analysis ofthe company for the period 2015 to 2018. On the basis of financial ratios of last 4 years, apreliminary analytical review on the financial information will be provided. At last, the report willstreamline about the Statement of Cash Flows related to the Company determining area creating thehighest inflow as well as outflow of cash.MAIN BODYSECTION 1 Materiality Concept for Altium LimitedThe materiality concept of accounting refers to concept where financial information of acompany is considered to be material for preparation of the financial statements, having impact onthe decision making process of the end users of the financial statements. The Financial informationis ma be of material importance for one company & immaterial for another (Duska, Duska andKury,2018).The main objective behind materiality concept is to determine whether the financialinformation disclosed in the financial statement will have any significant impact on the opinions offinancial statement users such as auditors, shareholders, investors etc.Materiality Level of CompanyParticularsMaterialityLevel2018 (in$000)MaterialityAmountOperating Profit5.00%397031985.15Total Assets1.00%2339912339.91Net Profit3.00%374891124.67Shareholders Equity4.00%363531454.12
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