Auditing and Assurance : Computing Solutions Limited

Running head: AUDITING AND ASSURANCE
Auditing and Assurance
Name of the Student
Name of the University
Author’s Note

1AUDITING AND ASSURANCE
Executive Summary
Discussion on the audit assertions and the risks in those audit assertions is the main objective
of this study. After the identification of assertions at risk, this report discusses about the
adoption of appropriate substantive audit procedures for these two cases. Another major part
of this report is to shed light on the necessary requirements of key audit matters in accordance
with the requirements of ASA 701 Communicating Key Audit Matters.

2AUDITING AND ASSURANCE
Table of Contents
Introduction................................................................................................................................3
Computing Solutions Limited....................................................................................................3
Requirement a........................................................................................................................3
Requirement b........................................................................................................................4
Requirement c........................................................................................................................5
Beautiful Hair.............................................................................................................................7
Requirement a........................................................................................................................7
Requirement b........................................................................................................................8
Requirement c........................................................................................................................9
Conclusion................................................................................................................................10
References................................................................................................................................12

3AUDITING AND ASSURANCE
Introduction
In the auditing profession, the auditors are responsible to examine and inspect the
financial records and reports of the firms so that any type of material misstatements can be
detected and it can be ensured that they have been prepared as per the required accounting
regulations (William Jr, Glover and Prawitt, 2016). The auditors are needed to consider to
test different factors and the testing of management assertions is one of the most crucial
aspects. An audit assertion can be explicit and implicit claims from the end of the
management for the purposes of preparing and presenting the financial reports. It is a crucial
aspect that incorrect assessment of the management assertions can contribute to audit risks in
the company’s financial reports (William Jr, Glover and Prawitt, 2016). Therefore, it is
needed for the auditors to identify the risks involved in the used management assertions and
then, they are required to undertake the appropriate audit procedures for the mitigation of the
identified risks (William Jr, Glover and Prawitt, 2016). This main objective of this report is
the recognition of the key assertions at risk along with the determination of appropriate
substantive audit procedures for the given companies. Based on the outcome of the whole
discussion, a conclusion is drawn on the auditing treatments of the companies.
Computing Solutions Limited
Requirement a
Accuracy and cot off are the two most relevant assertions for this particular case study
and the below discussion analyses and evaluates the related aspects of these two assertions.
Accuracy – Accuracy is one of the assertions for inventory and it assist in the determination
of the fact that whether the management has accurately done the valuation of inventory or
not. This assertion states that the managements are responsible to undertake the accurate
process of physical inventory count because of the aspect that any mistake in this process can