Auditing Assurance Services for Altium Limited

Running head: AUDITING ASSURANCE SERVICES
Auditing Assurance Services
Name of the Student:
Name of the University:
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AUDITING ASSURANCE SERVICES
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Executive summary:
The EA Partners, a firm of chartered accountants, has been appointed as the auditor of Altium
Limited to conduct the audit of its financial statements for the year 2018. As a preliminary step
to discharge the responsibilities as an auditor effectively it is essential to conduct through risk
assessment of the new client. Hence, the senior auditors of the firm have been assigned with the
task of risk assessment of the new client to identify inherent, control and detection risk in the
audit of financial statements of Altium Limited. A detailed discussion in this document on the
various aspects of financial statements of the company shall be made with the objective of
assessing the inherent, control and detection risk in the audit of financial statements of the
company.

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Contents
Executive summary:........................................................................................................................1
Profile of Altium Limited:...............................................................................................................3
Audit planning:................................................................................................................................3
Inheritance, detection and control risk factors in audit of Altium Limited:....................................4
Business of the company:..........................................................................................................11
Risk in relation to the nature of business:..................................................................................11
Analytical review and procedures:............................................................................................11
Ratio analysis and interpretation:..............................................................................................11
Profit margin and Return:......................................................................................................11
Liquidity position:.................................................................................................................13
Efficiency:..............................................................................................................................13
Beta value:.............................................................................................................................14
Analysis of previous audit reports:........................................................................................14
Conclusion and recommendation:.................................................................................................15
References:....................................................................................................................................16

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Profile of Altium Limited:
Altium Limited is an American-Australian software company known as Protel Limited until
2001. The company provides electronic design software for engineers used in computers. The
business operations of the company is stretched to different parts of Australia and America.
Established in 1985 by the Protel Systems Pty Ltd the company has come a long way since its
inception. A detailed and closure look at its financial statements over the years shall be helpful in
risk assessment of the company for the purpose of audit (Farrar, 2017).
Audit planning:
Auditing and Assurance Standards Board in Australia is an autonomous body of the Australian
government responsible to formulate and issue auditing and assurance standards to guide the
auditors in the country to discharge their responsibilities as auditors effectively. ASA 300 on
planning and performing an audit of financial report states the requirements to be followed by
the auditors in auditing the financial statements of companies. It is important to comply with the
guidelines provided in ASA 300 to properly discharge the responsibilities as an auditor. Planning
an audit in case of new client is much more detailed and braid as opposed to the planning of
audit of an existing client. The difference is mainly in risk assessment of the new client as the
auditor must conduct thorough risk assessment of a new client to unearth all possible areas of
risk in the audit of its financial statements (Glover, 2015).
In this case audit planning of Altium Limited include a thorough review of the affairs of the
company to understand the entity and its environment as per ASA 315. This will help the auditor
to have preliminary idea about the kind of transactions and nature of business of the company.
Subsequent to that a thorough review of its financial statements over the last few years or more