Auditing Theory and Practice: Resolving Auditing Controls and Assertions

Running head: Auditing
Auditing theory and practice
Name of the Student-
Name of the University-
Author’s note-

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Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................2
Solution to question 1..................................................................................................................2
Solution to question 2..................................................................................................................9
Conclusion.....................................................................................................................................18
References......................................................................................................................................19

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Introduction
The report is emphasized on finding out the appropriate resolution in assessing of the
auditing controls that are generally used to find out the control assertions. There are two parts in
this report which are defines that Jersy Ltd owning a range of fashion stores in the state of
Australia. The report perfectly defines the condition of auditing standards defines the
establishment of overhead cost related to the business impact of the industry. The autonomy
standard, which the company usually inherits to enjoy, is discussed with giving out the
appropriate reasons particularly. During the second part, it is being defined effectively in
measuring the auditing assertions of the company who is the manufacturer of mini-hifi systems.
The types of substantive procedure are also developed and described with evaluating the process
followed to the Australian Accounting Standards. Special sort of risk in relation to the auditing
provisions are discussed and evaluated with the considerations in the same process.
Discussion
Solution to question 1
It is an organization which is focused on manufacturing a range of fashion clothing
business which mainly target the youths of the country. The store managers of the company are
entitled to perform the highest degree of autonomy in regarding the types of quality of the
clothes that they mainly render to buy and sell at a higher value in the market. However, the
main office of the organization is consigned to provide a standard mark-up cost in the business
which are used by the local managers of the company which is used by them in order to receive
the selling price much higher in the market by comparing through several other companies who

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are entitled with the same sort of business. However, the monthly returns are generally
consolidated by the accountants of the accountants of the company about advising the managers
about betterment of the company.
Weakness existing in the system
There are most of the disadvantages related to the expansion of the business which is
inherited to the concluding of top priorities. Rapid amount of growth in the company often leads
to downsizing that leads to curbing the human resources of the organization. It is the generic
function which often create problem in its self-unintended consequences. Commitment attributed
in terms of pushing revenues into a new level where it is quite possible to sustain the resources of
the company in focusing to the breaking point of the company effectively. Management is
entitled to focus on the type of challenges faced by the company on the point of recruiting the
employees who might be able to handle and sustain the resources quite effectively and
efficiently. It is focused in protecting the future generation if the company to reach the road map
and meeting up the estimated target which was planned during the initial period. There are other
sort of problems which are mainly faced by the management in terms of recruiting employees
who are possessing the capability in order to handle expanded responsibilities efficiently. It is
done through enacting by sacrificing the cost and quality control in focusing to the requirements
in the business.
Rapid growth of the company may lead to downfall of quality. Which is encountered
with different sort of examples, it happened with Toyota where executives focused in achieving
15 percent of the world’s auto market by the year 2012. However, in order to achieving the target
the company did not took care about the quality, they just created a benchmark where they

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embedded their focus to become the strongest company in the auto market. To achieve this
target, the company just ignored about possessing the best quality which is the ultimate demand
of most customers. Companies result by compromising its reputation for the inadequate quality,
which they actually maintain. Corporate identity is very hard to achieve in the market place.
Unique, innovations, integrity and honesty are the key words which are generally linked with
achieving the badge of promoting the best quality in the market. Training and recruiting the best
human resource is one of the crucial aspects of the organization. When the companies are usually
expanding in the market, employees skills are most crucial to envied the best out of them. There
are many instances where employee’s skills do not update in accordance to the changes in
associated with the market apportions. There are different aspects which mainly follows the old
structure of the company, they do not obtain to change their working culture as well as the
hierarchical structure. This affects to the ultimate feedback the company where the clients do not
possess happiness to the company functions. Employees who are usually loyal to their companies
are generally found that they are used to provide the best returns out of them.
Financial challenges are one of the major setbacks in terms of this context. Expansion of
the company mainly require appropriate financial investments which can lead to act as a major
backbone of the company who is looking forward for ending the desired business. However, if a
company do not have proper finance then it would be quite difficult for the business to go
further. There are certain issues which occurred in the selected scenario where poor marketing
strategies and also poor pricing strategies harmed the business in which resulted them as poor
performances and they had to incur variable losses. Surges in the accountings standard of the
company leads to improper apportion through focusing on the franchises where they fail to
attract the customers. Improper pricing strategies where they do not even evaluate the