Auditing & Assurance Assignment - Forest Ltd
Added on 2020-05-16
5 Pages646 Words59 Views
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Running head: AUDITING & ASSURANCEAuditing & AssuranceUniversity NameStudent NameAuthors’ Note
2AUDITING & ASSURANCEIdentification of two different factors in the information provided that in turn can enhanceaudit risk:-i.Accounts payable: Forest Ltd has modified and upgraded the accounts payable structure to afully assimilated package that routinely can update the general ledger ofthe firm. However, there are certain issues associated to amounts that aredivided into $US as well as AUD. Essentially, specific cases can beobserved where USD is registered as AUD erroneously, leading toinaccurate balance of creditors. Therefore, in this case, the auditor mightencounter the risk of declaring an unqualified declaration owing to failureof the evaluator to detect material misstatement either owing to error orelse fraud (Chandler 2014). Again, month end rollovers also pose risk as credit balances aremechanically set to amount zero at the beginning of each and every month.This calls for the need of entering the credit balances manually everymonth and this process involves committing the mistake of wronglyentering the credit balances that in turn can lead to unqualifiedmisstatements. ii.Commitments and contingenciesDisclosure of commitments mainly comprise of the nature, amounts aswell as any unusual terms along with uncertainties of company’scommitments (William Jr et al. 2016). Contingent liabilities refer to the future expends that might possibly occurin the upcoming period. General instances consist of lawsuits, particularlywarranties on products as well as unsettled taxes of corporations (Chandler
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