Auditing: Materiality, Disclosures, and Financial Ratios

Running head: AUDITING
AUDITING
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction................................................................................................................................3
Section 1.....................................................................................................................................3
Materiality in Audit................................................................................................................3
Review of Disclosures............................................................................................................5
Section 2.....................................................................................................................................5
Analytical Review of Company.............................................................................................5
Section 3...................................................................................................................................10
Analysis of Cash Flow Statement........................................................................................10
Going Concern.....................................................................................................................10
Analysis of Auditor Report..................................................................................................11
Key Audit Matter.................................................................................................................11
Conclusion................................................................................................................................11
Reference and Bibliography.....................................................................................................13

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Introduction
Auditor should audit financial statement so it can gain proper information, so this help
the financial user to know various activity in the business. Company has to get its financial
statement audit so this will help them to ensure that the company is able to follow all the rules
in the preparation of financial statement (Coppage & Shastri 2014). Auditor has to ensure that
it able to follow the norms while preparing the financial statement so it have to carry many
different procedure which will help the auditor to know about the company financial
statement and on that basic auditor will able to give its opinion upon the company financial
statement. It have to check the internal control of the company, which help the auditor to
know how the company is able to manage the business risk and able to carry its business
operation easily in the market (DeFond & Zhang 2014). The report deal with a company
name Crown Resort which is an Australian Gaming company and business operation in
Australia. The company is the largest gaming company in the country and its was founded in
31st May 2007. The report is divided into three section as first section show about the
materiality in the business, the second section shows about the analytical procedure in the
company and last section show the analysis of company annual report.
Section 1
Materiality in Audit
This section deal with the materiality and scope of audit that is involve in company
financial report. Each company has to maintain many operation in order to carry its business
activities which lead to overall increase in company error and omission so this will directly
affect the company financial statement (Eilifsen & Messier Jr 2014). It show the materiality
which is involve in the company and how the auditor is able to address the same while
carrying its audit procedures in the company financial statement. Auditor has to give its

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opinion upon the company financial statement so to know the proper detail of company
financial statement it have to ascertain the amount of materiality which is involve in the
company business as this will help the auditor to know the amount of risk which the company
is having in their financial statement.
Auditor have to ascertain the amount of materiality in the business at the planning
stage so that it will able to know the procedure which has to be followed in the auditing of
company financial report. The assumption and estimation which the company is able to take
should be disclose properly to the auditor which will help it to know the amount of risk in the
business. It have to calculate the planning materiality which will help them to know about
the company more details and help them to give proper opinion in the company business
(Elder et al., 2013). The planning materiality is calculated while taking into consideration the
total sales, total asset and equity. Auditor usually take the amount which the largest one so
this give them a proper planning materiality so as per the calculation of planning materiality
is concern, the total asset is been taken as base and the calculation is shown below:
Planning Materiality=Total Asset∗5 %
¿ $ 8171700
¿ 5 %
¿ $ 408585
The above figure shows the planning materiality which is involve in the business so the
auditor have to carry the audit procedure properly while taking this into consideration so this
will help it to give proper opinion in company financial statement and able to give an
independent opinion on the company business activities.