Advanced Braking Technology Ltd. Financial Audit Report

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AUDITING

Table of contents
 Introduction
 Advanced Braking Technology Ltd.
 Audit Risks and Business Risks
 Ratios of the company
 Materiality
 Financial Statement Assertion
 Substantive Approach
 Random Sampling
 Conclusion
 References

Introduction
 Auditing is an important part of the organization which comes after the
Preparation of the financial statement of the company
 Auditing helps in the detection of fraud and any kind of error which is
occurring in the organization.
 It helps in the inspection of the financial statement of the company
and identifies any kind of error in the financial statement.

Advanced Braking Technology Ltd.

Audit Risks and Business Risks
 Risk during the time of unpredictable problems in the business or the uncertainties.
 Risk related to the size and nature of the business.
 Operational and strategic risks.
 Several auditing risk such as detection of error.
 Coherent and inherited risk.

Ratios of the company
Particulars
2016 2017 2018
$ 000 $ 000 $ 000
Current assets 3931 5909 4405
Current liability 3274 2001 3224
Total Liability 3307 3376 3342
Total Equity 1910 3858 2352
Total Assets 5217 7234 5694
Earning before interest and
tax -1758 -565 -1656
Net profit or loss -1758 -565 -1656
Revenue 4392 6738 6974
Ratio Calculations:
Particulars 2016 2017 2018
Current Ratio
1.2006
72
2.9530
23
1.3663
15
Debt equity ratio
1.7314
14
0.8750
65
1.4209
18
Return on capital employed
-
0.9047
9
-
0.1079
7
-
0.6704
5
Net profit ratio
-
40.027
3
-
8.3852
8
-
23.745
3

Materiality
 Balance sheet and income statement of the company
are the basis of the auditing
 It is the responsibility of the auditor to do the correct
Judgment related to Auditing operations.
 Misstatement or the omission of the data can affect
decision making process of the company.

Financial Statement Assertion
 Assertion helps an organization to measure the accuracy
of the financial statement of the company.
 Assertion is actually the right view or the real face of
financial statement of the company.
 Financial metric helps in the identification of the value
of inventories.

Substantive Approach
 Substantive approach is used for the verification and
checking of the transactions.
 This approach can be utilized when there is a weak
control over the financial statement.
 This approach helps in creating the supported proof
related to the assertion of auditing.

Random Sampling Method
 This method is used as it gives important information
related to the assets and liabilities of the company.
 This method Is used to know the relevancy of the
assets and liabilities.
 Under the random sampling 10 items have been
used from the plan.

Conclusion
 Auditing plays a very crucial role in the development of the company.
 There are certain risk related to auditing and business of the
Advanced Braking Technology Ltd.
 Materiality are the information which are used for doing the process
of Auditing.
 Substantive approach is very important is it helps in the measuring
and verification of the financial statement of the company.

References
 Balvers, R.J., Gaski, J.F. and McDonald, B., 2016. Financial disclosure and customer satisfaction: do companies
talking the talk actually walk the walk?. Journal of business ethics, 139(1), pp.29-45.
 Haji, A.A. and Mohd Ghazali, N.A., 2018. The role of intangible assets and liabilities in firm performance: empirical
evidence. Journal of Applied Accounting Research, 19(1), pp.42-59.
 Houston, L., Probst, Y. and Humphries, A., 2015. Measuring data quality through a source data verification audit in
a clinical research setting. Stud Health Technol Inform, 214, pp.107-13.
 Mock, T.J. and Fukukawa, H., 2015. Auditors' risk assessments: The effects of elicitation approach and assertion
framing. Behavioral Research in Accounting, 28(2), pp.75-84.
 Reuters, 2019. Advanced braking technology Ltd. [Online] Reuters. Available at:
https://in.reuters.com/finance/stocks/company-profile/ABV.AX [Accessed: 10 September 2019]
 Toppr, 2019. Nature of business risk. [Online] Toppr. Available at:
https://www.toppr.com/guides/business-studies/nature-and-purpose-of-business/nature-of-business-risk/
[Accessed: 10 September 2019]
 ABT, 2019. Company profile. [Online] ABT. Available at: https://www.advancedbraking.com/about-abt [Accessed: 10 September 2019]