Auditing and Assurance in Australia - Study Material

Running head: AUDITING AND ASSURANCE IN AUSTRALIA
Auditing and Assurance in Australia
Name of the Student:
Name of the University:
Author Note

1AUDITING AND ASSURANCE IN AUSTRALIA
Table of Contents
Answer to Question A................................................................................................................2
Answer to Question B................................................................................................................2
Answer to Part 1.....................................................................................................................2
Answer to Part 2.....................................................................................................................2
Answer to Part C........................................................................................................................3
Answer to Question 2.................................................................................................................3
Answer to Part a.....................................................................................................................3
Answer to Part b.....................................................................................................................3
References..................................................................................................................................5

2AUDITING AND ASSURANCE IN AUSTRALIA
Answer to Question A
The two significant financial statements of financial assertion account at risk for
Matrix are the accounts receivable account and the goodwill account. The accounts
receivable is an account that appears under the head of asset especially the current asset of the
balance sheet. The goodwill account will also be affected. The account appears under the
head of intangible asset in the balance sheet.
Answer to Question B
Answer to Part 1
One key assertion at risk regarding the accounts receivable account is the valuation
and allocation assertion. The disclosure made by the management regarding the receivables
as to who were the customers, who have purchased the most controversial products and the
terms for such purchase. If the purchase have been done on credit then such assertions in the
financial statements are at risk.
The key assertion at risk (inherent risk) regarding the goodwill account is the
valuation and accuracy assertion associated with the account. As the valuation of such an
account is difficult, the assertion by the management regarding the goodwill of the company
is likely to change and observe a diminishing trend in all probabilities.
Answer to Part 2
The accounts receivable is at the risk of valuation and allocation assertion because the
transactions that may have been recorded in the books of accounts may not be appropriate.
This is because the product sold by the pharmaceutical firm that resulted in the
hospitalization of a number of customers may not have been properly accounted for. These