Auditing Analyse 1 Auditing Analysis Author Note Introduction

Running head: AUDITING ANALYSIS
Auditing Analysis
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Author Note

1AUDITING ANALYSIS
Table of Contents
Introduction................................................................................................................................3
Auditing Overview.................................................................................................................3
Quantitative Risk 1.....................................................................................................................4
Auditing Procedure................................................................................................................4
Management Assertion...........................................................................................................5
Quantitative Risk 2.....................................................................................................................6
Auditing procedure.................................................................................................................6
Management Assertion...........................................................................................................7
Quantitative Risk 3.....................................................................................................................7
Auditing procedure.................................................................................................................7
Management Assertion...........................................................................................................8
Qualitative Risk 1.......................................................................................................................9
Auditing Procedure................................................................................................................9
Management’s Assertion........................................................................................................9
Qualitative Risk 2.....................................................................................................................10
Auditing Procedure..............................................................................................................10
Management Assertion.........................................................................................................10
Conclusion................................................................................................................................10
References................................................................................................................................12
Appendix..................................................................................................................................14

2AUDITING ANALYSIS

3AUDITING ANALYSIS
Introduction
The purpose of this study is to identify the potential risk areas of a public company.
This particular project identifies the qualitative and quantitative risks associated with the
auditing of the financial statements of the public company. The Royal Bank of Canada has
been chosen for the purpose of the study. The Royal Bank of Canada is a listed company on
the Toronto Stock Exchange and is a multinational Canadian financial services company. It is
the second largest bank in Canada. The bank covers more than fifteen million clients online
and employs 80000 people worldwide. The bank has its headquarters in Montreal, Quebec
and was founded in 1864 in Halifax. The qualitative and the quantitative risks associated with
the financial operations of Royal Bank of Canada has been supported by the annual reports,
management disclosures and other financial analysis that has been carried out in order to state
the findings with enough evidence (Cooper, Kingyens, & Paradi, 2014). Though the
mathematical figures represent a strong foundation for the proposed ideas, there are certain
limitations to these figures. For instance, the fall in the net income incurred by the company
in a certain financial year may be due to a particular crisis or financial event. Therefore, the
huge loss incurred by the company may offset the total average financial performance of the
company indicating that the company is not doing well. Here comes the role of the auditor
who intends to critically scrutinize the financial statements and the performance of the
company and then recommend accurate steps in order to address those issues (Mohsni &
Otchere, 2015).
Auditing Overview
The Royal Bank of Canada has been the largest Canadian bank based on the market
capital. The bank has been paying consistent or increasing dividends every year since its