Audit and Assurance on Schaffer Corporation Limited

This presentation analyzes the financial performance and audit test on the Schaffer Corporation Limited. It suggests recommendations to strengthen the liquidity position and profitability of the company. The audit risk model and sampling plan have been used to analyze the performance of the company. The subject is Audit and Assurance, and the college/university is not mentioned.

Audit and Assurance
Student Name:
Student Id:

Introduction
This presentation reveals the
financial performance and audit test
on the Schaffer Corporation Limited.
The audit risk model and sampling
plan have been used to analysis the
performance of company.
Schaffer Corporation Limited is
indulged in operating the branches,
being property, building materials
and automotive leather

Analytical review
financial performance
Schaffer Corporation Limited has
high profitability and low financial
leverage.
Company should increase the
debt funding to lower down the
cost of capital.
Increased return on capital is
based on the cost of capital of
company.

PLANNING MATERIALITY
MATERIAL ACCOUNT BALANCES


 ASSETS LIABILITIES
Cash & short term deposits 1. Trade & other payable
Trade & other receivables 2. Interest bearing loans
Inventories & borrowings
Property, plant & equipment 3. Provisions
Investment properties 4. Non-current interest
Deferred income tax assets bearing loans &
Other financial assets borrowings
5. deferred income tax liabilities

Financial performance of
company
High profitability.
Low efficiency ratio
Increased return on capital
employed.
Company should focus on issue
of debts if it wants to raise funds.

MATERIAL ACCOUNT
BALANCES
Cash and other items-
Assertion Test
Bill receivables-
Completeness and assertion
The below format is used to
test materiality test
ACCOUNT
BALANCE
AMOU
NT
($)
ASSERTION AUDIT
PROCEDURE
AUDIT
EVIDENCE

SAMPLING PLAN
Setting parameters for the
materiality planning.
Use of regression analysis to
measure the detention risk in
gathered information.
High inherent risk and detention
risk

Evaluation and implementation
of Sampling plan
Sampling plan is based on the
audit risk model.
It will have high detention and
control risk.
These both risk will also increase
the audit risk of the organization.

Analysing the audit and
assurance test
Materiality level calculated has
been amounting to $ 1,933.
Amount of $ 1,900, the asset and
liability account balance that
form the materiality zone are
listed in assets and liabilities.

Recommendation to Schrole
Group Ltd is
 Strengthening the liquidity position
and profitability.
Focused on keeping the financial
leverage low.
Manage the capital to increase the
effectiveness of capital deployment.
It will increase the return on capital
employed and also reduce the cost
of capital.

Conclusion
Financial leverage should be
increased by increasing the debt
funding.
Use of assertion testing will lower
down the audit risk of company.
AASB 136 should also be followed
to identify the true and value of
the assets and liabilities in timely
manner.

References
Raiborn, C., Butler, J.B., Martin, K. and Pizzini, M., (2017). The
Internal audit function: A prerequisite for good governance. Journal
of Corporate Accounting & Finance, 28(2), pp.10-21.
Schaffer Corporation Limited, (2018) Available at
http://www.schaffer.com.au/wp-content/uploads/2010-Annual-Repo
rt.pdf
., ., Accessed on 21st September. 2018
Sirois, L.P., Bédard, J. and Bera, P., (2018). The informational value
of key audit matters in the auditor's report: evidence from an Eye-
tracking study. Journal of Accounting Horizons. 14(2), 12-50.
Tepalagul, N. and Lin, L., (2015). Auditor independence and audit
quality: A literature review. Journal of Accounting, Auditing &
Finance, 30(1), pp.101-121.
Wu, C.Y.H., Hsu, H.H. and Haslam, J., (2016). Audit committees,
non-audit services, and auditor reporting decisions prior to
failure. The British Accounting Review, 48(2), pp.240-256.
Jones, P. (2017). Statistical sampling and risk analysis in auditing.
3rd ed, Australia: Routledge.