Auditing Issues and Practice for Azure Enterprise Income Statement

Running head: AUDITING ISSUES AND PRACTICE
Auditing issues and practice
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AUDITING ISSUES AND PRACTICE 1
Executive summary
The main objective of the report is to consider the income statement of Azure Enterprise and
establishing the materiality level. Based on the materiality level the report will identify
material items from the income statement and will determine the assertion involved with
those account. Further, the report will state the audit procedure that will be carried out by the
auditor while audit will be carried out for the identified items. The report will further
determine whether any fraud risk detected from the analytical review.

AUDITING ISSUES AND PRACTICE 2
Table of Contents
1.0 Audit planning.................................................................................................................4
1.1 Analytical review.............................................................................................................4
1.2 Preliminary judgement for materiality.............................................................................6
Accounts regarded as material...................................................................................................8
2.0 First account – Sales.........................................................................................................8
2.1 Rational for selection.......................................................................................................8
2.2 Assertion and explanation...........................................................................................8
3.0 Second account – Other income..................................................................................8
3.1 Rational for selection.......................................................................................................8
3.2 Assertion and explanation................................................................................................9
4.0 Third account – Depreciation...........................................................................................9
4.1 Rational for selection.......................................................................................................9
4.2 Assertion and explanation................................................................................................9
5.0 Fourth account – Wages............................................................................................10
5.1 Rational for selection.....................................................................................................10
5.2 Assertion and explanation..............................................................................................10
6.0 Suggested audit procedure.................................................................................................10
6.1 Audit procedure – sales..................................................................................................10
6.2 Audit procedure – other income.....................................................................................11
6.3 Audit procedure – depreciation......................................................................................11

AUDITING ISSUES AND PRACTICE 3
6.4 Audit procedure – wages................................................................................................11
7.0 Fraud..................................................................................................................................11
8.0 Conclusion..........................................................................................................................12
Reference..................................................................................................................................13
Appendix..................................................................................................................................15