Auditing and Assurance of Schrole Group Ltd

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Auditing and Assurance

Table of Contents
INTRODUCTION.................................................................................................................................1
ABOUT SCHROLE GROUP LTD.......................................................................................................1
ANALYTICAL PROCEDURES USING RATIOS...............................................................................2
PLANNING MATERIALITY...............................................................................................................4
MATERIAL ACCOUNT BALANCES.................................................................................................5
SAMPLING PLAN.............................................................................................................................11
Conclusion...........................................................................................................................................12
REFERENCES....................................................................................................................................13

INTRODUCTION
This report emphasises upon the financial performance, audit and assurance and
material account balance of company. In this report, Schrole group ltd software company has
been chosen. The real success of a company depends on the number of stakeholders the entity
s able to satisfy. Satisfaction of the primary stakeholders, i.e. shareholders comes from the
increase in their wealth. They are ready to invest more and potential investors are also
attracted only when they are certain regarding the company’s financial standing. The
certainty cannot be provided by the company through oral publicity. Solid evidence is
required to be given to the users. In the light of this requirement, the audit function comes
into the whole scenario. The entity presents its financial position to the users with the help of
financial statements. However, the users cannot blindly rely on those financial statements and
need some independent body to confirm the truth behind.
To do with this requirement the company does the function of external audit. An independent
professional accountant is hired. The responsibility of that independent professional is to do
an unbiased checking and appraisal of the internal control and the financials. An opinion is
referred to the shareholders as a result of the appraisal (Chintrakarn, Treepongkaruna,
Jiraporn, & Tong, 2017). The opinion relates to the fairness of the financial information and
related controls. However, to give this opinion certain audit procedures are required to be
done on the part of the auditor and the same are discussed in the report below. The discussion
shall revolve around audit risk model, materiality, financial risk assertions, analytical
procedures, sampling, and etc. The company chosen for preparation of report is Schrole
Group Ltd (Schrole Group Ltd, 2018).
ABOUT SCHROLE GROUP LTD
Being listed on Australian Stock Exchange, Schrole Group Ltd is a company in the industry
of Software & Services. The company is in the business of providing the facility of providing
best skilled teachers required with requisite skills to the international schools.

Audit Risk Model
NATURE OF THE ENTITY AND INDUSTRY
The company makes use of the unique software that it possesses. This helps the schools in
recruiting the teachers in the lowest time span with lower costs (Schrole Connect). Further,
the company is engaged in provision of customised training and assessment facilities (Schrole
ETAS). The function of background screening of the required school administrators is also
provided (Schrole Verify). Moreover, the facility of casual staff is also provided (Schrole
Cover)
The company being in the software and services industry uses information technology to
provide and administer its business. All kinds of solutions for technology and training are
being provided. Dual parties are benefitted by the business the company is transacting in. The
job seekers get job opportunities and the schools get the staff requirement fulfilled (Schrole
Group Ltd, 2018).
AUDIT RISK MODEL
This audit risk could be defined as risk that an auditors express an inappropriate opinion on
the financial statements.
Audit Risk = Inherent Risk x Control Risk x Detection Risk
Audit risk is associated with the inherent risk, control risk, detention risk faced by auditors in
the audit report.
Inherent risk- Schrole Group Ltd has been facing inherent risk of material misstatement in
financial statement. It might happen due to the error and mistakes while recording the
financial statements.
Control risk- This is the risk which reflects the issues and manipulation in the financial
statements. It is the risk which happens due to the material misstatement recorded by the
accountant to Schrole Group Ltd.
Detention risk- This risk arise material misstatement in the financial statements which happen
due to the fraud and errors, misapplication, fraud, omission, and other issue in the financial
statements.