Auditing Question Answer 2022

Running head: AUDITING
Auditing
Name of Student:
Name of the University:
Authors’ note

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Table of Contents
Audit Report:..............................................................................................................................2
Answer to Question 1:................................................................................................................3
Answer to Question 2:................................................................................................................5
Answer to Question 3:..............................................................................................................10
Answer to Question 4:..............................................................................................................13
Answer to Question 5:..............................................................................................................15
References & Bibliography:.....................................................................................................18

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Audit Report:
To the Member of Las Vegas Group Corporation
Las Vegas Group Corporation (USA)
Nevada.
According to the Apes 110 code of ethics, an auditor needs to maintain the proper ethical
manner in case of performing his audit standards. According to the provision of section 307
of corporations act, it is generally consider as the auditors duty, to present an audit report
along with the relevant accounting provisions. Such report is needed to provide all
information, explanations and true and fair views of financial statements. According to ASA
220 an auditor needs to maintain the quality control for an audit financial report. According
to the ASA 230 an auditor need to present the proper audit documentation while submitting
his audit report. As per ASA240 it is generally the auditor’s responsibility to present any
misconduct in the audit report at the end of audit procedures.
Here the company Las Vegas Group Corporation has five subsidiary companies that facing
some misstatement issues relating to the accounting transactions. While the companies
performing their accounting records they are unable to maintain some relevant accounting
policies, which is turning to the misstatements of accounting materiality.
However those accounting issues are rectified in this present report and it was also suggesting
to this company, to consider the relevant accounting standards and policies while maintain
such documents.
Thank you.

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Answer to Question 1:
A) The AU section 329 normally stated the analytical procedures regarding the audit
planning. Under the sub-section 6 of section 329, it is stated that the main purpose of
applying analytical procedure is to provide assistance in audit planning relating to the nature,
timing and extent to audit procedures, which will be used generally to obtain evidential
matters for particular account balances and transactions details. For such purpose the audit
planning is need to be focused on, enhancing the auditors’ knowledge regarding the clients’
business including the accounting transactions and events that occurred up to the date of audit
process. Along with such an auditor need to identify the key areas that may represent
particular risks relevant with the audit performances. An auditor need to follow the below
mentioned procedures as an analytical review of audit procedures;
 Need to compare the present year’s financial information along with previous years’
data.
 Need to compare the present financial information along with the budgeted or
forecasted reports.
 Provide relevant judgements relating to the accounting growths of an organization
with the using of ratio analysis.
 Comparing between financial and non-financial information.
B) Generally the audit risk is implies the risk that an auditor may not able to detect at the
time of examine the financial statements of his clients. In case of the present scenario the type
of risk relating to companies receivables accounts and inventories, that an auditor is probably
faced during his audit examination is the detection risk. The detection risk is one type of audit
risk that an auditor is unable to detect due to material misstatements.

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C) In an audit procedures, generally three different types of risks are exists. Excluding
the detection risk, two others audit risks are control risk- relating to material misstatements,
which are not be prevented using the client’s controlling system. And the other one is
Inherent risk- such risks are normally susceptible due to the reason of material misstatements
that occurred during the transactions’ recording.
D) According to ISA 320, the concept of materiality is used in both the planning and
performing the audit function. As per the Para 10, the planning materiality is generally set
before the commencement of detailed testing of accounts. In case of any misstatements
relating to accounting information is revealed at the time of onset the audit procedure,
therefore an auditor is needed to implement lower level of materiality. As per the Para 9, the
auditor need to implement performance materiality in case to examine the complete financial
statements and for such propose an auditor need to maintain the higher level of materiality.
Followed the provision of auditing generally in case of set up the levels of materiality,
generally 5%-10% is consider as material level and below 5% is consider as immaterial and
required proper judgements.
E) MEMORANDUM
To: The Partners.
From:
Cc:
Subject: Audit approaches on behalf of Receivables, Inventory and Land and
Buildings.
Date: 25th September 2019.
This memorandum is particularly based on the concept of audit approach for different
accounting components. Those components are the receivables, Inventories and the land and

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building of the company. An audit approach is normally known as the strategy, which is used
by an auditor to conduct an audit programme.
The Company’s 80% of customers are international customer and most of the
transactions are exchanged in foreign currency. Generally, the company is allowing 60days
credit period for individual customers. In case to evaluate the collected amount an auditor
needs to implement some approaches like check general ledger, calculate the receivable total
amount, check the collection details etc.
The company usually followed the standard costing system in case to compute the
value of inventory and the raw materials are normally valued at invoice price. For such
purpose the auditor need to check the invoice details properly.
According to the provision of AASB 116, the company is required to follow the fair
value system in case of compute the value of land and building or any other tangible assets.
For such purpose an auditor needs to check the current fair value of the assets and also need
to check the amount of depreciation and any amortisations losses, if occurred.
It can be concluded from the above discussion that an auditor with the use of
following audit approaches can evaluate the individual prices of receivables, inventories and
Land & Buildings.