Audit and Assurance Report Analysis: Coca-Cola Amatil Company Review

This report provides an audit and assurance analysis of Coca-Cola Amatil, examining the company's financial reporting practices, particularly concerning AASB 112 and AASB 136. It identifies key asset accounts at risk, including plants and machineries and accounts receivables, detailing the associated risks and relevant audit assertions as per ASA315. The report also highlights risks related to operating expenses and the potential for misstated financial information. It emphasizes the importance of proper audit control mechanisms to ensure accurate asset valuation, compliance with accounting standards, and reliable financial reporting. The analysis underscores the need for transparent financial reporting and robust internal controls to mitigate financial risks and ensure the integrity of the company's financial statements. The report concludes by recommending the implementation of effective audit control mechanisms to safeguard assets, ensure legal compliance, and achieve organizational goals efficiently and effectively.

COCA COLA AMATIL
Audit and Assurance
Audit and assurance analysis
Name of Author

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Introduction
In this report, audit and assurance services provided by the auditors to a business have
been analysed. This report is prepared on the Coca-Cola Amatil Company. The company applies
AASB 112and AASB 136 in its financial reporting practices as well. AASB 112 implies that the
company should account for the future and current tax consequences of its transactions while
AASB 136 applies to the impairment of assets.
Identify two (2) key asset accounts at risk.
 Plants and Machineries
 Account Receivables
Key assertion (as per ASA315) where the audit efforts
1.
Asset
Account
2(a).
Explanation of
why
the account is at
risk
2(b).
Key Assertion
(Identify ONLY
one
assertion that you
consider to be the
most important for
each asset account)
2(c).
Substantive test of
detail
Plants and
machineries
The plants and
machineries are
showing high
It states that the
company must
ensure that its
The company also
applies AASB
112and AASB 136
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fluctuation in the
price and covers
more than US $ 2
billion
investment
which is 12% of
the overall total
assets (Mohseni,
2014).
assets are
accounted at their
recoverable
amounts
(Štangová, (2017).
in its financial
reporting practices
as well. AASB 112
implies that the
company should
account for the
future and current
tax.
Account ReceivablesAs.
The account
receivable and
provision for the
doubtful debts in
the books of
account is too
high which
reflects the
material risk to
business.
As per the
information
observed, BML
has opened new
account
receivables as new
contracts have
been cracked, yet
the current
ratio/quick ratio
doesn’t show any
improvement. This
stands a risk of
manipulated
financial accounts.
Complete
transactions seem
not to be recorded
Company needs to
follow proper
work program and
audit principles in
recording of its
plants and
machineries in its
books of accounts.
It will have to keep
the reporting
framework
transparent for its
stakeholders.
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Identify one Statement of Comprehensive Income (Income Statement) expense
account at risk
Expense account Explanation why a risk Key Assertion (Identify
ONLY one assertion that
you consider to be the
most important for the
expense
account)
Operating expenses It is observed that
company has also
complied with the AASB
110 which states that the
company should include
the events occurring after
the reporting period in its
financial statements. It
should disclose the details
of the occurrence of such
events in its financial
reports. It may directly
impacts the recording of
the operating expenses
Existence- Auditors will
revalue whether the
expenses incurred are in
real existences or not.
There is chance of wrong
data of asset which may
lead to falsified
information
Bad debts recording Coca Cola Amatil stands
at the risk of the
possibility of no possible
buyers for the old
machines lying in the yard
that might bring huge
Control procedure should be
used to overcome the
associated risk as Key
Assertion by the auditor
(Porter, Hatherly, &
Simon, 2008).
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financial losses
Mainardi(Mainardi, 2011).
Conclusion
Coca Cola Amatil needs to undertake proper audit control mechanism to ensure that the
assets are used for the purpose they are meant, laws are followed, the goals are achieved with
efficiency and effectiveness and the financial reporting is in compliance with the reliable
accounting practice.
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References
Mainardi, R. (2011). Harnessing the power of continuous auditing. Hoboken, N.J.: John Wiley.
Mohseni, A. (2014). Audit Approach to Audit Risk Management, Quantitative Determination of
the Components of Audit Risk and Determine the Impact on the Components of Audit
Risk in Audit Sampling. SSRN Electronic Journal.
Porter, B., Hatherly, D. & Simon, J. (2008). Principles of external auditing. Chichester, England:
John Wiley.
Štangová, P. (2017). Financial Audit as a Tool for Management Control. Account and Financial
Management Journal.
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