Developing an Audit Program for a Selected Publically Listed Company
Added on -2021-02-21
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DEVELOPING AN AUDIT PROGRAMFOR A SELECTED PUBLICALLYLISTED COMPANY
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................31. Selecting listed company....................................................................................................32. Nature and industry along with identifying key business risks and factors impacting inherentand control risk.......................................................................................................................33. Performing analytical procedures of statement of financial position and financialperformance over last three years with ratios.........................................................................44. Discussing that account balances which are considered as material..................................75. Selecting different material account balances with five assets and liabilities....................76. Listing relevant financial report assertions of material account with reason.....................87. Designing comprehensive set of audit work steps for every material account balances..108. Including sampling plan with use of every material account balance..............................12CONCLUSION .............................................................................................................................13REFERENCES..............................................................................................................................14Books and journal.................................................................................................................14
INTRODUCTIONAuditing is referred as detailed examination of financial reports of company and is usedfor offering confidence for every stakeholders about accurate accounting reports of organizations.In simple words, it is known as accumulation and evaluation of evidence to identify and report ondegree of correspondence among reflected information and established criteria. The present reportis analysing ASX listed company Legend corporation Limited with its nature and identify and thiswill determine key business risks. There will be consideration of factors which impacts inherentand control risks along with application of Audit Risk model. It will perform analyticalprocedures of statement of financial position and performance over last three years and materialbalances will be considered. This report will discuss different material account balances with fiveassets and liabilities and designing comprehensive set of audit works for every material accountand addressing assertions for every account. Lastly, this will include sampling plan for everymaterial account balance to be tested.1. Selecting listed companyLegend Corporation Limited2. Nature and industry along with identifying key business risks and factors impacting inherentand control riskLegend Corporation Limited is an Australian engineering solutions providers whichoperates in information technology, electrical, power utility and semi conductor industries(Annual report of Legend Corporation Ltd, 2018). It is listed on Australian Securities exchangesince March 2004 as this operates through three segments asGas and Plumbing Supplies,Electrical, Power and Infrastructure and Innovative Electrical Solutions.Key business riskHighmediumLowInterest rate riskMediumForeign currency riskLowLiquidity riskLowCredit risk analysisLowInterest rate risk: The exposure of this risk increase with financial assets and liabilitiesrecognised at reporting date where alteration in interest rate impact future cash flows of fair valueof fixed rate financial instruments (Wen, Xiao and Wang, 2018). Its policy is to minimise orreduce interest rate cash flow risk exposure on funding for long term perspective with use of blendof floating and fixed interest rate debt which is at medium level.
Foreign currency risk: It is low because organization is having its overseas operations as of salesand purchases which are denominated in US dollars. The nature of USD is relatively very smalland frequent and formally designate forward contracts as hedging instruments instead ofconsidering contracts to be part of arrangements of economic hedge.Liquidity risk: It is very low as debts has been settled along with obligation on basis offinancial liabilities (Kogan, Sudit and Vasarhelyi, 2018). This group has managed risk bymaintaining reputable credit profile and to invest in surplus cash with major financial institutions.3. Performing analytical procedures of statement of financial position and financial performanceover last three years with ratiosLiquidity ratio201620172018Current assets598165679269562Current liabilities251172310934870Current Ratio2.382.461.99The above graph and table is stating liquidity of Legends Corporation Ltd over past threeyears as it is capable for repaying its current liabilities. However, negative signal could beobserved as it is decreasing in 2018 so it should imply the implications for improving ormaintaining it.Leverage ratio201620172018
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