Auditing Theory and Practice: Fraud, Aggressive Accounting Policies and Misappropriations

Running head: AUDITING THEORY AND PRACTICE
Auditing Theory and Practice
Name of the Student:
Name of the University:
Author Note:

2AUDITING THEORY AND PRACTICE
Table of Contents
Executive Summary.........................................................................................................................3
Introduction......................................................................................................................................4
Methodology....................................................................................................................................5
Findings...........................................................................................................................................8
Implications of findings.................................................................................................................10
Conclusions and Recommendations..............................................................................................12
References and Bibliography.........................................................................................................14

3AUDITING THEORY AND PRACTICE
Executive Summary
In this assignment, proper emphasis has been given to research on issues like Fraud,
aggressive accounting policies and other misappropriations. The company selected for this
assignment is BC Iron Limited that deals in mining, crushing as well as screening and trucking.
The current segment explains about the company, risk assessment procedures used by an audit,
audit procedures. The objective of an auditor is explained in the study where it is the
responsibility of the auditor to engage in obtaining true and fair value and performing audit
procedures. Audit procedures related to fraud, aggressive accounting policies and other
misappropriations. Risk-based auditing approach, auditing concepts as well as auditing standards
and case laws had been used in the report and applied it with the case company (BC Iron
Limited). The requirements of the Australian Auditing Standards are made to help auditor for
achieving the objectives as highlighted in the Australian Auditing Standards and need to follow
the overall objectives of an auditor. The study properly explain each of the audit procedures that
relates to fraud, aggressive accounting policies or any of the other misappropriations found in the
financial statement of BC Iron Limited.

4AUDITING THEORY AND PRACTICE
Introduction
The current study deals with highlighting the key areas of research that should cover
issues such as Fraud, aggressive policies and other misappropriations (Yao, Percy and Hu 2015).
The current segment had selected BC Iron Limited as the case company and the area of research
is to discuss about Fraud, aggressive accounting policies as well as other misappropriations
present in the case company. BC Iron Limited is a smaller mining company where they manage
operations such as mining, crushing as well as screening and trucking (Alles, Kogan and
Vasarhelyi 2018). The report properly introduces the topic and discusses about these research
areas in detail and linking with the company (BC Iron Limited). The Auditing Standard used in
this study is ASA 200 and 240 as it discuss about fraud detection and how to minimize it as far
as possible. Risk-based approach had been used in the study where risk need to be appropriately
identified as well as managed. The information relates with financial, managerial and operational
needs to be accurate and reliable way (Purcell 2016). It is the responsibility of an auditor to
perform the audit in accordance with Australian Auditing Standards as well as auditing standards
for given company and country. Proper application of the requirement of the AAS (Australian
Auditing Standards) by the auditor is expected for providing sufficient basis for achieving the
objectives of an auditor. Due to these audit engagements, it varies largely on the basis of
situations that cannot be predicted in accordance to Australian Auditing Standards (Yang, Brink
and Wier 2018). Therefore, the study had been conducted to discuss on the issues governing to
fraud, aggressive accounting policies and other misappropriations.