TACC608 Auditing and Assurance Services- Assignment

Added on -2020-02-19

| TACC608| 14 pages| 3225 words| 197 views

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AUDIT & ASSURANCE
Commonwealth Serum Laboratories (CSL)ContentsIntroduction.................................................................................................................................................2Audit risks....................................................................................................................................................3CSL Ltd.........................................................................................................................................................3Areas susceptible to audit risks...................................................................................................................4Research and development (R & D).....................................................................................................4Effect of the audit risk on company’s financials..........................................................................................4Audit process to verify balances of account................................................................................................6Contingent liabilities............................................................................................................................6Revenue...............................................................................................................................................6Deferred Income..................................................................................................................................6Acquisition of business........................................................................................................................6Liabilities and provisions......................................................................................................................6Litigations............................................................................................................................................7Effect of such risk on the company’s financials...........................................................................................8Audit procedure to verify account balances................................................................................................8Conclusion.................................................................................................................................................10References.................................................................................................................................................112
Commonwealth Serum Laboratories (CSL)IntroductionIn the year 1916, Commonwealth Serum Laboratories (CSL) was established. The main objective of the company is related to vaccination services but during the initial stages, it encountered severe issues that caused massive troubles. However, the hard work of the company allowed it to become effective in the manufacture of antivenom that gained widespread attention.Furthermore, other developments of CSL include the production of tetanus vaccines, polio vaccines, diabetics, etc. All these developments in the field of medicines allowed the company toprosper in the competitive world, thereby assisting it to become a multi-special organization in the development of various medicinal items. Moreover, the largest area of operations of the company is blood plasma derivatives because it is the only organization engaged in the same. In other words, Australia does not have any other company engaged in the same activity. 3
Commonwealth Serum Laboratories (CSL)Audit risksAudit risks are those risks that occur because of incapability on the part of auditors to identify whether the financial statements are free from material misstatements or errors (Messier & Emby, 2005). In such a scenario, the auditor will clearly provide an ineffective opinion on the company’s financials. Such material misstatements arise because of faulty internal control mechanisms in the organization thereby playing a key role in enhancing the risk levels of a company. Besides, in relation to an auditor, material misstatements are caused due to detection risks wherein the capability of an auditor to identify major issues is inappropriate (Cappelleto, 2010). Such detection risk arises because of the auditor’s inefficiency and negligence to conduct the audit process. On a whole, the auditor must look at this issue because it may result in dangerous situations.CSL LtdThe purpose of the study is to evaluate the audit risks of the company, its significant impact uponthe company’s affairs, and several processes that can play a key role in verifying the balances of accounts affected by such risks.The company pursues a risk and audit management committee within its framework that allows it to take into account every audit risk prevailing within the organization especially in segments like environment, safety, health, compliance, physical assets, etc. Further, many other committees communicate with this committee so that every key issue is communicated and addressed effectively (Vause, 2009). This clarifies the fact that the company is having proper strategies to ensure that every major issue is being taken into account. Moreover, effective internal control mechanisms are also needed within the company affairs to ensure that market disclosures, infringement of copyright or trademark, insider trading, etc are taken into due consideration (CSL, 2016). However, it must be noted that risks can only be mitigated by these procedures and elimination of the same is not possible. These risks are the inherent risks that exist in an organization even though proper internal control policies are in place (Hoffelder, 2012).4

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