Auditing | Case Studies | Report

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

1AUDITING
Executive Summary
The aim of making this report based on two case studies of different companies is to
demonstrate the idea of research and critically analyze the trends and issues in auditing and
assurance services. The auditing of these case studies of the company has to identify the key
assertion at risk associate with inventory and intellectual property. Further, the study
demonstrate the substantive audit procedure that to follow in each identified of both the
companies. In conclusion, of the report it has found that the auditors play a critical part while
assessing the data of the company to presenting in a transparent manner to the investors as
well as to the company they are capable to show a true and fair status of their information.

2AUDITING
Table of Contents
Introduction................................................................................................................................3
Introduction on Inventory Measurement and Valuation............................................................3
Computing Solutions Pvt. Ltd................................................................................................4
Requirement (a)..................................................................................................................4
Requirement (b).................................................................................................................4
Requirement (c)..................................................................................................................5
Introduction to AASB 138, AASB 136 and AASB 3................................................................7
Case Study 2: Beautiful Hair Ltd...........................................................................................8
Requirement (a)..................................................................................................................8
Requirement (b).................................................................................................................9
Requirement (c)..................................................................................................................9
Conclusion................................................................................................................................11
References................................................................................................................................12

3AUDITING
Introduction
The companies are cautious to maintain a good image amongst the public to have a
position for themselves in the competitive market. Therefore, it becomes necessary for every
company to show a true and transparent information about them and can deal with their
shortcomings. The company chosen in this report for auditing and assuring services are
computing solutions ltd. and Shimmer pvy ltd.Audit is a technique that helps to provide a
systematic evaluation of an organization’s data, records, performance and operation in order
to verify the authenticity and reliability of the data provided by the organization for internal
control (Shore & wright, 2015).Assuring services is the part of audit, when auditor completes
his/her auditing they provide assuring services.Every company has some risk factor exiting in
them. Some are able to identify it and make a proper decision before any miss happening and
some missed to identify it. This report aims at analyzing and identifying the problems in these
companies through proper auditing and to find the risk assertions for both the companies.
This report further deals with the requirement of ASA 701.
Introduction on Inventory Measurement and Valuation
The valuation and measurement of inventory is considered as a crucial aspect for the
business organizations; and AASB 102 Inventories prescribes the required accounting
treatments for inventories. As per Paragraph 9 of AASB 102, states that the it is needed for
the firms to measure inventories at lower of cost and net realizable value. As per Paragraph
10 of AASB 102, the cost of inventories comprises all purchase costs, conversion cost and
other costs acquired to bring the inventories in their personal location. As per Paragraph 21 of
AASB 102, standard cost method or the retail method can be used in order to measure the
cost of inventories. Two important aspects in the measurement of inventories are cost
formulas and net releasable value (aasb.gov.au, 2019).