Auditing Report for Nanosonics Limited

ASSIGNMENT
BAO3306 AUDITING
REPORT

Semester 1, 2018
Contents
Executive summary....................................................................................................................2
Introduction................................................................................................................................3
Key information.........................................................................................................................4
Our understanding of the client..............................................................................................4
Our assessment of significant accounts..................................................................................4
Our planning materiality........................................................................................................7
Our assessment of what can go wrong...................................................................................8
Conclusion..................................................................................................................................9
Appendix..................................................................................................................................10
References................................................................................................................................12
Executive summary
Financial statements of the company represent the financial positions at the end of the
year and the financial performance for the reporting period. Through this financial
positions and the financial performance, the company’s health is verified and
considered and accordingly the necessary action takes place. Auditing of the same
financial statements is done on yearly basis so as to ensure that the financial
statements confirm the true and fair view of the state of affairs of the company. The
report has been prepared with the three major aims. First aim is to gain an
understanding of the company of whom the audit has been planned. Second major aim
is to assess and identify the risky accounts which the account which has been
materially misstated. Third major aim is to identify these risky accounts with the help
of the financial statements which are the part of annual report of the company. Last
and the major aim are to identify and assess the audit risk which is referred to as what
can go wrong if the material misstatements remain present or remains undetected.
With these four major aims in consideration, the report has been prepared with the
proper divisions and subdivisions if necessary.

Introduction
As the title of the report suggest, the whole report will be revolved around the audit.
Without the audit of the financial statements of the company no users, including the
stakeholders of the company and shareholders of the company will not rely upon the
financial working and the condition of the organisation. Therefore, audit is defined as
the backbone and supporting hand to the functioning of the organization. Audit
includes the independent function which involves the checking and verification of the
books of accounts. Before starting of an audit, the auditors shall develop the audit
plan. The audit plan includes the activities that are required to be performed and
majorly includes the heads of accounts which are required to be checked on an
independent basis. Heads of accounts are classified on the basis of the materiality of
the items present therein and in case any further decision is required then the same
shall be adopted and implemented frequently.
For the purpose of the report the company – Nanosonics have been selected. At first
the knowledge of the company is required to be done as to the name of company, its
origin, date of incorporation, purpose of the company. Thereafter, from the annual
report of this company, five significant accounts have been identified and obtained in
addition to the item, included in five able, the most significant accounts which are the
high risk level. Then the materiality level has been judged for each of the items so
identified level has been selected for the month of March 2018. After that what can
go wrong in each of the item has been discussed in detail with respects to the process
of the audit risk assessment. Then the report will end after the conclusion and
interpretation.