Auditing Risks and Procedures in Golden State Mining

This presentation discusses the auditing risks and procedures involved in the Golden State Mining company. It covers topics such as audit risk, materiality, financial analysis, and sampling methods.

HA3032 AUDITING

• The golden state holding has been taken for the undertaking of
the audit process.
• The risks which have been included and identified in the business
have been used.
• The analytical procedure has been performed.
• There is the consideration of material misstatements which are
involved.
• The material accounts which are involved have been identified.
• The audit procedure and sampling method for all have been
identified.
INTRODUCTION

COMPANY OVERVIEW
• The incorporation of the company is made in August 2017.
• It is situated in western Australia.
• The acquisition of the quality exploration assets will be
made in this.
• The registered office of the company is in west Perth.

AUDIT RISK
The risk which is involved in the prices of the auditing is covered in the audit
risk. In this there are various types of risks and they are as follows:
• Inherent risk
• Control risk
• Detection risk

RISKS IN GOLDEN STATE MINING
The company is involving various risks which have been mentioned in
the report of the company and they are as follows:
• Market risk
• Cash flow Interest rate risk
• Credit risk
• Liquidity risk

FINANCIAL ANALYSIS
The analytical procedure is followed which involves the ratio analysis and
that is presented below:
Ratio Formula 2018
Return on total assets Income/Total assets *100 -149.88%
Current ratio Current assets/current liabilities 2.43
Total asset turnover ratio Revenue / Total assets 0
Debt to equity Total debts/ Equity capital 0.58

MATERIALITY
The material accounts are to be identified in the business and for that there
is the consideration of various aspects. In that several factors are involved
and they are as follows:
• Value of the transaction
• Nature of the company

MATERIAL ACCOUNTS
The material accounts are required to be identified and this has been done in the
given case. The main accounts which are determined are as follows:
• Cash and cash equivalents
• Accounts Receivables
• Prepayments
• Capitalized project acquisition cost
• Property plant and equipment
• Trade and other payables

In the process of evaluation of the material accounts there is the use
of certain assertions. All of the assertions which have been used in
the given case are as follows:
 Valuation
 Existence
 Completeness
 Right and obligation
AUDIT ASSERTIONS

The sampling is the process in which some of the transcations are
selected from the total events and then they are used for the purpose of
testing. The evaluation has been made and the main methods which are
being used in the given case are as follows:
Random sampling method
Judgemental sampling
Selective sampling
SAMPLING

 The consideration of the risks which are involved in business have been
identified.
 The audit risk model is taken into account and by that relationships which
are present are identified.
 The ratio analysis is performed and in that various calculations have been
made.
 The main material accounts have been identified and used for audit
procedure.
 The sampling technique is used and all the methods which can be used are
identified.
CONCLUSION

REFERENCES
Golden state mining. (2018) Annual report. [Online] Available at:
https://goldenstatemining.com.au/wp-content/uploads/2018/11/Gold
en-State-Mining-Limited-June-2018-Report-v4.1-FINAL-
withAuditReports.pdf [Accessed 21 Sep. 2019]
Golden state mining. (2019) About us. [Online] Available at:
https://goldenstatemining.com.au/ [Accessed 21 Sep. 2019]
Keune, M.B. and Johnstone, K.M. (2012) Materiality judgments and
the resolution of detected misstatements: The role of managers,
auditors, and audit committees. The Accounting Review, 87(5),
pp.1641-1677.