Auditing and Professional Practice Assignment

Added on - 15 May 2020

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Running head: AUDITING AND PROFESSIONAL PRACTICEAuditing and professional practiceName of the studentName of the universityAuthor note
1AUDITING AND PROFESSIONAL PRACTICETable of Contents1.0Audit planning.................................................................................................................31.1 Analytical review.............................................................................................................31.2 Preliminary judgement for materiality.............................................................................32.0First account selected – Cost of sales..............................................................................42.1 Rational for selection...........................................................................................................42.2 Assertion and explanation................................................................................................42.3 Recommended audit procedure........................................................................................43.0Second account selected – Other income........................................................................53.1 Rational for selection...........................................................................................................53.2 Assertion and explanation................................................................................................53.3 Recommended audit procedure........................................................................................54.0Third account selected – Inventory.................................................................................54.1 Rational for selection.......................................................................................................54.2 Assertion and explanation................................................................................................64.3 Recommended audit procedure........................................................................................65.0 Fourth account selected – Cash............................................................................................65.1 Rational for selection.......................................................................................................65.2 Assertion and explanation................................................................................................65.3 Recommended audit procedure........................................................................................7
2AUDITING AND PROFESSIONAL PRACTICE5.0Fifth account selected – Superannuation.........................................................................76.1 Rational for selection.......................................................................................................76.2 Assertion and explanation................................................................................................76.3 Recommended procedure.................................................................................................7Reference....................................................................................................................................8
3AUDITING AND PROFESSIONAL PRACTICE1.0Audit planningAudit plan is the particular guideline that is required to be followed during theprocedure of audit. Before carrying out the audit the auditor shall determine to what extentthe audit procedures shall be carried out for obtaining required evidence (Coetzee and Lubbe2014). This is required for getting assurance that the financial statement of the company isfree from any material misstatement. Audit planning includes the establishment of overallstrategies for audit to develop and engage the audit plan. Planning is not a particular phaserather it is a iterative and continuous process that starts immediately after the completion ofprevious period audit (Ruhnke, Pronobis and Michel 2014).1.1 Analytical reviewIt is the study of significant trends and ratios and the investigation of unusualfluctuation in the balance sheet or income statement (Titera 2013). The level of reliance thatis placed by an auditor on the financial statement depends on the materiality of itemsincluded under assessment. Analytical review is carried out –For assisting the auditor to plan the extend, timing, nature of audit processAs the overall review for financial statement in final audit review stage.As the substantive procedure while its use can be more efficient and effective ascompared to the detail tests for reducing the detection risk to assert the particularfinancial statement (Kharisova and Kozlova 2014).1.2 Preliminary judgement for materialityThe preliminary judgement for materiality is the set for financial statement. Tolerancelevel is the maximum misstatement that will be considered as material for the particularaccount balance. The amount for tolerable misstatement for the particular account will be
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