Auditing and Assurance: In-depth Case Study of Jertsy and Sweet Sound

This case study analyzes the auditing and assurance practices of Jertsy Ltd and Sweet Sound Ltd. The assignment explores the internal growth strategies of Jertsy Ltd, focusing on market expansion, product development, and the importance of effective management systems, internal controls, and risk mitigation. It delves into the challenges of managing staff turnover, inventory, and financial reporting in the context of business expansion. The study emphasizes the significance of adhering to accounting standards (AASB), the role of technology, and the need for strategic decision-making. It also touches upon the operations of Sweet Sound Ltd, particularly regarding sales growth and warranty provisions. The analysis considers the implications of these factors on stakeholders and suggests improvements in areas such as employee recruitment, product pricing, and inventory management to enhance overall business prospects and mitigate risks associated with expansion.

Running head: AUDITING AND ASSURANCE
AUDITING AND ASSURANCE
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AUDITING AND ASSURANCE 1
Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
In Response to Question 1......................................................................................................2
In Response to Question 2....................................................................................................10
Conclusion................................................................................................................................15
References................................................................................................................................17

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Introduction
The assignment actually deals with the chosen company which are the Jertsy ltd and
Sweet sound ltd and other aspects related to audit is conducted in this case. The glitches in
the system have been depicted in the conducted study along with the board of directors in
order to take the most significant decisions which is actually involved in that case. The
company in this case must adopt the strategy in order to expand the business. The initiatives,
which the management of the company must undertake in order to good enhance the overall
business prospects of the company based on the long term objective of the firm. The case
study of another firm which is the Sweet Sound ltd (SS) where the company is deciding to
increase the sales of the business for the period of about 3 to 5 years of the business. The
warranty period claim is actually related to the new products in the business of the company.
The risk which are associated with the provision of the company along with the provision of
warranty is further taken into consideration are further depicted in the conducted study.
Discussion
In Response to Question 1
The case study is related to the internal growth of the business of Jertsy ltd and further
the expansion of the business also falls under the internal related growth of the company. The
company is actually working in to expand the business and further to enhance the overall
business prospects. The growth strategy is basically one of the most competitive strategy
which takes place in order to enhance the market position of the company. The overall
growth of the company is impacted based on the economic development, which actually takes
place in the firm. The resources of the firm will further lead to the growth of the company
along with that effective or optimum utilization of resources. Some of the general growth
strategies in the business are the market expansion, market penetration, product expansion,
diversification and acquisition of the company (André et al. 2016).

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In the internal growth, strategy of the company some of the significant actions are
accordingly performed which includes designing and developing of the existing products in
the business of the company. The products of the business in that case must be experimented
by the company along with the other aspects which are associated with it. The chosen
company in this case is the Jertsy Ltd which deals with the fashion clothing stores which is
situated in Australia state capitals. The monthly income and expenditure of the company is
kept in record by the company along with the other aspects which are associated in that case.
In case of expansion, the company needs to adopt some of the significant business strategies
which is that the finance department of the company must be large in order to deal with the
potential customers in the market (Ma’Ayan and Carmeli 2016).
The monthly return is evaluated accordingly by the senior level management of the
company along with the detailed evaluation which is associated along with it. The senior
level management of the company must understand the other parameters which creates
impact on the business prospects of the company. At the time of audit of the company, it is
actually needed by the company to follow the rules and regulation which is associated with
the business. The accounting treatment of the company must be complied with the norms
which is listed in the AASB act of the company (Kung, Chang and Zhou 2019). At the time
of business expansion it is quite important for the senior level management of the company to
follow the rules which are particularly laid on the AASB act of the company. The internal
management control of the company must be effective so that at the time of expansion it is
needed by the management of the company to mitigate the risk and the other factors which is
associated with the business.
The management system of the company at time of expansion must take some of the
significant business steps in order to enhance the sales which will automatically increase the
revenue in the business of the company. The business growth of the company is actually

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depended on the effectiveness of the management system along with that maintaining the
rules and regulations which are associated with the business of the company.
The weakness of the company is basically related to the management system of the
company and the reason behind that is the expansion in the business of the company will
further help the business of the company to grow. It further falls under the accountability of
the company to understand the changes in the senior management of the company along with
the other factors which are quality control, effectiveness in the communication plan, maintain
the growth of the key business stakeholders and risk which are associated with the business.
If the internal management system of the company is effective then the management in that
case needs to execute the plans along with the schedule which actually includes the
implementation of such plan in the system of the company.
In case of the potential weakness of the company it is needed to take some of the
significant measurement regarding the risk which is associated with the business of the
company. The market aspects must be outlined by the company along with the potential
objective which are associated and steps in that case must be taken by the company in order
to accomplish the task which is associated with the business of the company. The strategies
which is associated in developing the additional products along with the current market price
of the company. The product development strategies on the other hand enhances the sales in
the business of the company along with the revenues which are associated with the business.
The other two aspects of business which are the market penetration and the market
development of the company. In case of the market development of the company it is needed
by the company to understand the new market segment of the existing products of the Jertsy.
The market development actually help the company to expand the sales in the new market by
the process of expanding the geographic representation of the business. The product must

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also try to developing the strategy regarding the additional products in order to aim the
current market in that case.
The market penetration on the other hand helps the business of the company to
compete with the current competitors in the market. The increase the usage of a company
helps the business of the company to grow which drives out the potential competitors in the
market and the products used by the current customers. These are some of the internal
strategic growth which must be taken into consideration by the managements system of the
company. The strategic implementation of the business will further help the business of the
company to grow (Ehrhardt and Brigham 2016). This are some of the key areas which is
needed to be improved by the company so that the weakness can be mitigated along with that
it will automatically attract the potential stakeholders in the business.
The expansion strategy is mainly adopted by the business in order to achieve growth
in comparison to the past accomplishment of the business and in case of any loopholes it is
actually taken care of by the management system of the company. The main objective of the
firm is to achieve the growth of the business along with the other factors which are associated
with it. The technological enhancement of the company in this case plays the significant role
in the business. In todays world artificial intelligence of the company actually plays one of
the most significant role in the business. The constant upgrade ion the technological system is
very important from the company in order to achieve growth in the business. It is quite
significant for the business o Jertsy to mitigate the potential threat or risk associated with the
business along with the weakness in the system of the company. The key elements in the
expansion strategy are the concentration, integration and diversification in the products of the
business in order to attract the potential customers in the business. In order to accomplish the
highest growth it is needed for the company to take care of the change in the taste and

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preferences of the customers and in that case it is also needed to build an effective strategy in
order to enhance the business growth.
The growth in the business of the company through the process of diversification is
particularly significant at the same time in the business which actually can be pretty riskier.
Marketing Research in that case is quite important for the company in order to determine the
consumers in the new market along with the potential new products in that case. At the time
of expansion in the internal business system it is quite significant for the business to make the
potential investment in the project which are actually having minimum risks with the highest
return in the market (Kluczek and Olszewski 2017). The company must concentrate to
enhance the market share in the business of the company along with the business prospects of
the company based on the long term objective of the business. The diversification in the
products of the company also plays some of the significant business role along with the other
aspects.
Some of the significant steps which is needed to be taken by the managements system
is to enhance the overall business prospects of the company which are as follows:
 It is needed to hire the potential employees in the business so that the operations of
the company are effective.
 The other factor is that the senior management system must evaluate the potential
risk and then evaluate the business strategies.
 The recruitment and the selection process of the company must be effected so that the
business can get the potential employees based on the job profile.
 The quality along with the price of the product must be optimized so that the
company can accomplish the highest growth in the business.

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 In case expansion the storage of the products will also increase and in that case the
company needs to refurbish the storage or rather the warehouse of the company.
The inventory control management of the company must be effective as due to the
expansion of the business. The store manager in this case plays a significant role in order
to enhance the overall inventory management system which is actually based on the two
significant techniques which are the FIFO and LIFO. This is the basic concept regarding
managing the business prospects of the company. Effective inventory control of the
company is needed in order to enhance the productivity of the business based on the long
term objective of the firm. The senior management system must adopt the significant
tools and strategy which is important for the business.
It also falls under the accountability of the company to enhance the interest of the
potential stakeholders in the business along with the other aspects of it. The stakeholders
in the business plays important role in terms of maintaining the stakeholder’s interest will
help the business growth to achieve the growth in the business by taking on the top
project in the business. Then it is the responsibility of the top level management to
achieve the highest return in the business by considering the potential risk and the threats
which are associated with the business (Soros 2015). The pricing strategy at the time of
expansion of the business plays the significance role as grabbing the interest of the
customers will enhance the profitability of the business.
The long term objectives must be accomplished by the company which is
Jertsy and certain aspects which are further associated with it. The investors in the
business concentrates on the status in the financial statement of the company and the
other reports before making the investment decisions in the business (Pilbeam 2018). If
the business performance of the company after the expansion is satisfactory then it will

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attract the potential investors in the business. The decisions of the management depend
on the environmental sustainability of the company which needed to be taken into
consideration by the company. The retrenchment strategy is another strategy in this case
which must be taken into consideration by the company. The business must be able to
maintain the records of the customers of the business and further it is needed to track the
choice and preferences in that case (Griffith et al. 2015). The rules and regulation in that
case must be followed by the company in order to ensure that the financial statement of
the company is free of material misstatement or any kind of fraud which takes place
within the business. The audit of the company must be conducted each and every year so
that the performance of the business can be enhanced at the same time.
The expansion in the business also takes place by the method of external factors
which takes place by the method of acquisition and merger in the company. This is
actually another process of expansion which actually takes place within the business of
the company. This kind of expansion actually takes place within the business based on
the financial performance of both the company. In this case the expansion which is
actually related to Jertsy Ltd is different and it is actually based on the internal related
expansion an initiative taken by the senior level management of the organization. On the
other hand, the technological upgradation in the system of the company must be taken
into consideration by the senior level management of the organization. Effective
optimization and upgradation of the system of the company will definitely help the
business of the company to prosper in the future (Cao, Chychyla and Stewart 2015). It is
also important for the company to create a finance department for the purpose of
managing the internal finance related business matter of the company. Based on the
current business position it will be better for the company to have separate departments
which are the finance, HR, systems and operations. This will further help the business to

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prosper in the right direction along with the other aspects which are associated in that
case.
The technical aspects of the company must be evaluated based on the certain significant
parameters involved with it. The expansion strategy will further help the business to prosper
as the management system of the company is effective and in case of any business
manipulation must be identified by the senior level management of the company. The
changes in the system of the company must be identified and accordingly it is significant tap
new sales and the delivery channels included in that case. The expansion strategy on the other
hand is processed with the help of the diversification strategy which is involved in the
process. The growth strategy is further significant for various purposes in order to accomplish
the goals which is related to the management policies. The expand growth strategy will
further help the business to prosper based on the future aspects of the firm.
The constant promotion in the industrial system is very important from the company in
order to complete development in the business. It is quite significant for the business of Jertsy
to alleviate the potential threat or danger related with the business along with the faintness in
the scheme of the company. The key rudiments in the expansion plan are the attentiveness,
addition and change in the products of the commercial in order to entice the potential
clienteles in the business (Kogler, Mittone and Kirchler 2016). In order to achieve the highest
development it is needed for the company to take care of the change in the taste and
preferences of the clienteles and in that case it is also needed to shape an real plan in order to
enhance the business growth.
The development in the business of the company through the procedure of
diversification is particularly important at the same time in the business which actually can be
pretty chancier. Marketing Research in that case is quite significant for the company in order

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to determine the customers in the new souk along with the possible new crops in that case. At
the time of expansion in the interior business system it is quite significant for the business to
make the potential asset in the project which are actually having least dangers with the
uppermost reappearance in the market. The company must distillate to improve the market
share in the business of the company along with the business forecasts of the company based
on the long-term objective of the business. The change in the products of the company also
plays some of the significant commercial position along with the other features.
In Response to Question 2
The case study is actually based on the company which is Sweet Sound Ltd where the
company is looking for increase the warranty of the products from 3 years to 5 years. The
increase in warranty falls under the provision of the company’s act. The warranty services
actually depends on the durability of the product along with the other factors. The policies of
the warranty regarding each of the product which is sold by the company are further taken
into consideration. The term audit assertion is referred as the certain claims which is made by
the management at the time of preparation of the financial statement of the company. In this
the financial statement of the company will further be based on certain rules and regulation
which is the asset liabilities, income and expenses of the company. There are actually various
assertions which takes place in the business which actually involves the occurrence and
completeness of the transactions (Avis, Ferraz and Finan 2018). The existence of the
transaction in that case also plays some of the significant business role where the transactions
of the business are dependent on the mainframe situation.

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The provision of warranty in this case plays significant role which is needed to be
increased by the company. The main aspects of the business is to show the profit and an
increase in the warranty will definitely create impact on the business. The increase in the
warranty of the business will definitely create a positive impact on the business prospects of
the company. The sales of the company will definitely increase along with the overall
production of the company. It is quite important for the company to take a note in the changes
in the system of the company along with the other factors which are associated with it
(Gitman, Juchau and Flanagan 2015). The management must evaluate the effect on the
increase in the provision of the warranty on the goods and services which actually varies
based on the variety of the products.
There is also certain risk which is associated in the increase in the provision of
warranty of the product which will be sold by the company which is SS ltd. The management
of the company must take care of the other aspects which are associated with the business
along with the significant fluctuation in the business of the company. The customers of the
company will further be happy in receiving an extension in the warranty on the new products
which will be sold by the company. The company in that case needs to maintain or rather
develop the quality of the new products which automatically the sale related transaction in the
business. There are various factors which is needed to be considered by the business of the
company along with the potential fluctuation in the sales of the company. The business of the
company must gather the relevant facts which are currently associated with the provision of
warranty. It is quite the responsibility of the management system of the company to mitigate
the risk associated with the business of the company.
The warranty of the business will further help the prosper as it is quite an effective
strategy where there is also certain loss for the business. In order to mitigate the loss in the
business it is quite important for the company to understand the potential areas of loss in the