Auditing Theory and Practice for Trunkey Creek Wines

Running head: FINANCIAL ACCOUNTING
Auditing theory and practice
Name of the University
Name of the student
Authors note

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FINANCIAL ACCOUNTING
Executive summary:
The report is prepared based on the information that has been gained from the given case study
on Trunkey Creek Wines that has the principals’ activities of engaging in distribution and
production of wines, grapes and beef. The audit plan has been prepared with the help of
assistance of an auditing firm that is Miller Yates Howarth. It is required by the auditors to make
assessments of differe4nt accounts such as accounts receivable, property assets, marketing
expenses and investments. Analysis of various audit risks has been done by employing ratio
analysis tool.

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FINANCIAL ACCOUNTING
Table of Contents
Introduction:....................................................................................................................................3
Discussion:.......................................................................................................................................4
Answer to question 1A:...................................................................................................................4
Answer to question 1B:...................................................................................................................8
Answer to question 2A:...................................................................................................................9
Answer to question 2B:.................................................................................................................10
Conclusion:....................................................................................................................................11

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FINANCIAL ACCOUNTING
Introduction:
The report demonstrate the preparation of audit plan of Trunkey Creek wines (TCW)
which one of the important and long standing clients of Miller Yates Howarth (MYH). There are
some areas in relation to different accounts which are the main concern of the audit partner and
the same is addressed in the report. The assessment of the internal control system of TCW has
been conducted and its effectiveness has been evaluated by the implementation of proper tools
and techniques. In addition to this, analysis of audit risks related to several accounts has been
done by the implementation of ratio analysis tool and accordingly rtecommnedi9ng the audit
procedures.
Discussion:
Answer to question 1A:
Ratio Unaudited (2018) Audited (2017) Audited (2016)
Return on equity 10.80 17.5 15.2
Return on beef
production assets
1.67 -0.82 -3.45
Return on grapes and
wine production assets
12.2 14.5 16.2
Gross margin 24.5 30 31.76
Net profit margin 14.38 20.27 17.85
Marketing expense 23.67 17.89 15.2