Chalmers Limited Audit Program: Risk Assessment and Audit Procedures

This report presents a detailed audit program developed for Chalmers Limited, focusing on risk assessment and planning. It begins by understanding the entity and its industry to identify key business risks and potential material misstatements in the financial report. The report considers factors affecting both inherent risk and control risk, applying the audit risk model [AR = f (IR, CR, DR)] to Chalmers Limited. It assesses the company's inherent risk and control environment, ultimately determining the appropriate risk rating. The audit program outlines substantive tests of balances to substantiate the ending balance of accounts at year-end. This document is available on Desklib, a platform that offers a range of study tools for students.

Developing an Audit Program for Chalmers
Limited
Student Name
University Name
Unit Name
Unit Code

Assessment of Inherent Risk,
Detection Risk, and Control Risk
Inherent Risk
•Remember that the inherent risks are independent of
the auditor. To better understand the inherent risks.
Companies in the high-tech industry are more prone
to risk/inventory obsolescence
1.Customer's information technology environment
•Companies with more complex and
decentralized processing systems are more
vulnerable to higher inherent risks

Control Risk
Control risk refers alludes to risks or issues of material misquote of
the budget reports because of the nonappearance or disappointment
of the activity of the substance's connected controls. The association
must have proper inside controls to forestall and recognize occasions
of misrepresentation and mistake.
Detection Risk
Testing risk is that the reviewer neglects to distinguish material errors in
the fiscal summaries. The reviewer must apply a review procedure to
check for material misquotes in the fiscal summaries, regardless of
whether because of extortion or mistake.

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