Risk Assessment

0RISK ASSESSMENT
Risk Assessment
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Running head: RISK ASSESSMENT
Table of Contents
Introduction................................................................................................................................2
Knowing the Company..............................................................................................................2
Significant Business Risk...........................................................................................................2
Analytical Review......................................................................................................................2
Significant Audit Risk (ASA 200).............................................................................................3
Audit Risk Model...................................................................................................................3
Significant Inherent Risks......................................................................................................3
 Inventory:........................................................................................................................4
 Intangibles:......................................................................................................................4
 Fixed Assets:...................................................................................................................4
 Foreign Exchange Transaction........................................................................................5
Control Risk...............................................................................................................................5
Corporate Governance...........................................................................................................5
Impact on Audit Testing.............................................................................................................5
Appendix:...................................................................................................................................7
Reference:................................................................................................................................11

Running head: RISK ASSESSMENT
Executive Summary:
The report is about the analysis of audit procedure and the applicability of accounting
standards by the company Bega Cheese. The report provides the overview about the different
types of risk associated and the auditor’s opinion.

Running head: RISK ASSESSMENT
Introduction
As per ASA 300 para 4 the objective of the auditor for planning audit is to assess the
devoting suitable attention to significant parts of the audit, recognition of problem and
providing effective solution to it on a timely basis, selection of proper audit team and
coordinate the work with team to complete audit in a proper time.
The auditor of Bega Cheese framed the audit in order to give a rational declaration
regarding the fiscal report for stating that it’s free from any material misstatement. This can
arise if fraud or error prevails in the accounting process. For trailing the scope of audit the
auditor team takes into consideration the geographical location as well as the management
structure in which the company is operating. The audit team is skilled, competent about the
industry to audit the multifaceted manufacturing as well as distributing company Bega
Cheese Limited.
Knowing the Company
The company is located in Bega town of New South Wales Australia. Company runs
the business of dairy goods in Australia. In the year 2011 the company was publically listed
in Australia Stock Exchange. Maximum percent of the shares of the company is being hold
by the suppliers of farmers. At the end of year 2016 the value of Bega Cheese crossed AUD
775 million. Capitol Chilled Foods Australia Pty Ltd held twenty five percent stake of Bega
Cheese. The interest was controlled by the multinational company Lion.
As per para A36 in ASA315.11 Bega Chesse belongs to food manufacturing industry
that produces processed cheese and dairy products. It follows AASB for preparing its
financial statement as well as IFRS for preparing consolidated statements. All the business
risk associated with the company is compiled and recorded as per the AASB. The
organization of the business is obligatory to abide the Federal and State Environmental