Auditing & Assurance Services PDF

Running head: AUDITING & ASSURANCE SERVICES
Auditing & Assurance Services
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AUDITING & ASSURANCE SERVICES1
MEMO
Date: 29 November, 2018
To: Chief Audit Executive, Westgate Company Limited.
From: Senior Auditor, WCL.
Subject: Audit procedures to be used to review strategic planning activity of WCL
In order to review the strategic audit planning it is important to have a detailed understanding
about the company’s short term objectives as well as long term goals. Strategic planning must be
effective in order to achieve these objectives and goals. The short term financial and operational
goals are outlined in the table below:
Current Expected
All amounts are in $' million 2016 2017
Sales 930.00 1,030.00
Earnings available after tax 150.00 166.14
The company also has the following objectives which it want to achieve in the recent future:
I. Generation of net return of 15% on the shareholders’ equity.
II. Increase in research and development expenditure to the extent of 5% of sales.
III. Increase the net share in subway car market in North America by 5% (Knechel & Salterio,
2016).
In order to ensure that the strategic planning of the company is an enabler to the company in
achieving the above objectives it must be effective. The auditor should specifically focus on the
short term strategy of the company to see whether it is commensurate for the achievement of