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Annual Reports on Paying Corporate Taxes

   

Added on  2020-02-24

10 Pages2397 Words52 Views
By student name ProfessorUniversityDate: 27 August 2017.

1ContentsQuestion no 1..............................................................................2Question no 2..............................................................................6Question no 3..............................................................................7Refrences....................................................................................91 | P a g e

2Question no 1With the increased regulation by ACCA on the companies and the introduction of IFRS, the auditof companies financials have gained special importance and with the signed audit report, nothing can betaken on records and verified. There has been an increased regulation at the Stock exchange where thelisting requirements also ask for the signed audit report. Besides this, audit report is also required incase of sanctioning of the loan or filing of the annual reports or paying corporate taxes. The purpose ofaudit is to give reasonable assurance to the users of the financial statements, both internal and externallike employees, customers, banks, shareholders, financial institutions, government, taxation authorities,creditors, etc. Audit is an independent examination of the books of accounts of an entity, whether profitmaking or not, public or private with the view to express an opinion on the viability of the financialstatements being prepared and to comment whether it has been prepared on an unbiased basis. Whilestarting the audit, the auditor needs to know the ins and outs of the business in which the companydeals in, the business environment and the industry, the external and internal macroeconomic andmicroeconomic factors to give a proper view on the financials. They also test the estimates andjudgements being taken by the management to see whether the same is appropriate or not. They needto spot the risk areas where there is a chance of material misstatement and hence point out the same tothe management. They also check the basic assumptions of accounting like materiality, consistency andwhether the entity is a going concern[ CITATION Son17 \l 1033 ].For giving effect to all this, they may take help of the substantive and analytical auditprocedures. Substantive audit procedures is done via inspection of the books of accounts, ledgerscrutiny, etc. and observation of the key activities being done in the company. They also take theexternal confirmation from the parties like banks and the financial institutions, creditors and debtors onthe year-end balances, etc. and in some case make inquiry from the external parties like vendors andcustomers. Besides this, they also do re-performance and recalculation of certain critical numbers likeearning per share, taxes, etc. to check the arithmetical accuracy. Further, besides this, reporting of theassets and liabilities is also seen whether they are recorded completely and without any errors. Inaddition, the related party disclosures and other crucial information, which needs to be disclosed, arechecked.Once the auditor is done with substantive procedures, he applies the analytical procedures todetermine the nature of the audit processes to be applied, the time to be taken for each activity and theextent to which the materiality level should be set and checked. He checks the level of internal control2 | P a g e

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