This report provides an in-depth analysis of auditing and assurance principles, focusing on the identification of key audit assertions at risk and the determination of appropriate audit procedures. The report examines two case studies: Computing Solutions Limited and Beautiful Hair. For Computing Solutions, the report identifies accuracy and cutoff assertions related to inventory as being at risk, detailing the potential for material misstatements due to inventory valuation and transaction recording issues. The report outlines substantive audit procedures to address these risks, including physical inventory counts and transaction verification. For Beautiful Hair, the report focuses on the rights and obligations and occurrence assertions related to intellectual property, specifically a secret formula acquired through a business acquisition. It highlights the risks associated with confirming the company's ownership of the intellectual property and the occurrence of the acquisition. The report then outlines substantive audit procedures, such as inspecting acquisition documents and verifying transactions. The report also discusses the requirements of ASA 701 Communicating Key Audit Matters, explaining how the identified risks can be considered key audit matters and how they should be disclosed. The report emphasizes the importance of assessing risk and applying appropriate audit procedures to ensure the accuracy and reliability of financial statements.
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