Report On Narrative and Auditing 2022

Running head: NARRATIVE REPORTING
AUDITING
Name of the Student
Name of the University
Author Note
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Table of Contents
Executive Summary...................................................................................................................2
Introduction................................................................................................................................3
Financial Ratio of Company......................................................................................................3
Risk in the business....................................................................................................................3
Inherent Risk..........................................................................................................................3
Response to above mentioned risk.............................................................................................4
Accounting System in Company................................................................................................4
Internal Control System in Company.........................................................................................5
Conclusion..................................................................................................................................6
Reference....................................................................................................................................7
Appendix 1.................................................................................................................................8
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Executive Summary
The report is based upon the audit process as it show how the company is able to get audited
its financial statement, it show how the auditor is able to inspect and examine the financial
statement of the company so that it can able to give proper opinion about the company
financial statement. The report show how the auditor able to ascertain material misstatement
in company with the help of financial ratio of the company, the report all show how the
auditor is able to ascertain the risk which is associated in the company financial statement. It
also show the procedure which the company have to follow in regards of financial statement
of the company. The last part of the report shows about the new accounting system which the
company is able to utilize in their business activities and also show the meaning of the
internal control in the business.
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Introduction
Auditing help the company to gain proper information about the company financial
statement to the user of the company. Auditor is able to inspect and examination the company
financial statement so that it can know about the company financial performance and how the
company is able to maintain the financial aspects in the company (Alzeban and Gwilliam
2014). It should able to carry many procedures which help them to gain the value in the
company financial statement. Auditor have to gain many audit evidence which help it to gain
proper amount of knowledge about the company business activities. The auditor have to
access the internal control system so that it can know about each company problem more
easily as all the main problem always remain in the internal control (Chen et al., 2014). The
company having lack of management is also have less amount of control internally so this led
to increase in overall risk in the company financial system. It should also take into
consideration all the aspects in the company business activities so that the company is able to
have proper amount of activities in regards of financial statement of the company. The report
show about the company audit process so this will help the user to gain proper amount of
information and also show different company ratio in the business. It also show about the
company risk matter in the business as well as how the company is able to manage its
business operation in the company.
Financial Ratio of Company
These ratios show about the company performance as it takes into consideration about
the different aspects of company financial position. It takes into consideration the liquidity
aspects, profitability, efficiency and leverage ratio. All the ratio is able to show about the
company different aspects of the company and how the company is able to carry all the
operation easily and effectively in the business.
Risk in the business
Each business is able to have to proper amount of risk in the business as this help the
company to manage its business operation more easily and effectively in the business. the
auditor have to check many activities so that it can access have proper strategies in regards of
risk of the company (De Simone, Ege and Stomberg 2014). There are two types of risk in the
company financial statement, which are inherent risk and control risk in the company.
Inherent Risk
This are the risk which are associated with company financial statement as this are the
risk which happen in the company due to error and omission in the business (DeFond and
Zhang 2014). This risk happens due to some proper error or omission of the company
financial information so this should be taken into consideration by the auditor in the company
financial statement.
The Inherent Risk involved in company financial statement are:
As the company is having less amount in liquidity ratio so it signifies that the
company is having an error in company financial statement so due to that there can be mis-
statement in company current asset so that this can help the company to reduce the liquidity
ratio of the company. As due to these company is having a bad ratio as it can keep on
reducing from 2016 to 2018 it keep reducing in company financial statement so it is found
that the company is having some inherent risk in their liquid ratio (DeFond and Lennox
2017). The auditor should able to analysis the internal control system so that it can able to
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