Auditing Issues and Recommendations for Nanosonics

ASSIGNMENT
BAO3306 AUDITING
REPORT

Semester 1, 2018
1. Executive summary
The main purpose of the assignment is to discuss the issues of auditing that has been
answered in the answered. The answer need to be given by the external auditor of corporate
entity of Nanosonics. The company has been asked to conduct the audit of the business
operations for the financial year of 2017 of the corporate entity,
The main objective of the study is to provide a summary into the principles of auditing and
recommendations that are needed in order to start an auditing framework essential for the
assessment and evaluation of the accounting statements of the chosen business entity.
Moreover, the accounts that have been preferred for the purpose of assessing the degree of
materiality are Cash and Cash Equivalents Account, Trade and Other Receivables Account,
Inventories Account, Prepayments and Other Current Assets Account and Non-current
Borrowings Account.

2. Introduction
The auditing procedure of the financial statements of a company are essentially carried
out for the purpose of evaluating the fact as to whether the financial report that is prepared for
a stipulated financial year reflects the true image of the corporate entity. This means that the
controlled set of guidelines or structures should be necessarily complied with for the purpose
of reflecting the fairness of the accounting statements of the selected corporate entity.
Furthermore, the primary logic behind the financial reporting activity in case of a selected
organization refers to the fact that the third party investors or the stakeholders of business
will receive a clarified image in regards to the business operations of the particular firm
whose financial reports are being prepared. In this particular study, the selected organization
is Nanosonics which is a listed organization. This fact however, redoubles the significance of
the accounting statements.
It has been further mentioned in the case study that has been presented that as an external
auditor it has been asked to carry out the audit of the accounting statements of the corporate
entity of Nanosonics. The audit fees that has been conveyed to the client in the particular
letter in regards to Audit engagement is $100,000. The particular auditing standards that have
been utilized in order to carry out the required evaluations are ASA 315.
Thus this report that has been prepared aims to give an overview of the particular auditing
procedures and regulations that would have to be adopted for the purpose of executing the
required procedures.

3. Key information
a) Our understanding of the client
The client firm that has been chosen for the purpose of this particular study is
Nanosonics. This particular corporate entity has been founded in the accounting year
of 2001. The headquarters of the business entity has been based in Sydney, Australia.
The management of the corporate entity of Nanosonics have been an innovator in
regards to the prevention of infection. The unique product that has been manufactured
by this organization is the automated trophon ERP high level disinfection device that
has paved the way around the world in regards to the establishment of a new standard
that are utilized in ultrasound probe disinfection practices (William Jr, Glover and
Prawitt 2016).
Moreover, the particular organization has been listed on the Australian Securities
Exchange in the financial year of 2007. Next, in the financial year of 2009 the
corporate entity had launched trophon which had been an automated technology for
the HLD of intra-cavity and ultrasound probes in regards to the surface. Next, in the
financial year of March 2015, the corporate entity had been included in the Australian
Stock Exchange ASX300 Index. In the following year the corporate entity got
included in the list of the ASX200 Index. In the recent times the corporate entity of
Nanosonics has offices in North America, Canada, Europe, United Kingdom and
employs more than 150 people.
The core values can be developed as follows:
 Safety – trophon, an unique product that has been developed by the corporate
entity of Nanosonics has led to the development of a new benchmark in
regards to the protection of the patients, staff and the environment in regards
to the potential hazards that is reflected from the utilization of the chemical
soaking methods.
 Versatileness – the particular features that have been reflected by trophon has
been that the product is self-contained and compact in nature. This means that
the installation procedure of the product requires no critical or complicated
processes. Moreover, the compatibility of the product with different brands of
ultrasound probes has increased the scope of utilization of the product.
 Simplicity – the operations in regards to the utilization of trophon has been
simple. Moreover, the particular process required minimal training on the part
of the staff utilizing the probe.
Therefore, it can be concluded from the operations of the particular corporate
entity that Nanosonics has been a successful corporate venture and has achieved a
higher degree of success in a very short period of time. Moreover, the success story of
this particular corporate entity can be summarized with the help of the following
attachment (William Jr, Glover and Prawitt 2016).