Comprehensive Audit Report: DHL - Business Risks, Planning and Testing

This report, prepared for the audit of Dudley Health Limited (DHL), a new client of Samway Baker Fitzgerald (SBF), addresses key aspects of the audit process. It begins by identifying and analyzing business risks, including those related to fraud at Pellegrino Shores, and their impact on financial statement assertions such as completeness and accuracy. The report then delves into audit risks, particularly the risk of material misstatement and detection risk, and the importance of internal controls. It explores the role of internal audit in fraud detection and prevention, including how internal audits provide services in connection with fraud. The report discusses audit strategy, including the direction, scope, and timing of the audit, and the procedures to gather audit evidence. It examines key account balance assertions and testing procedures for customer accounts and salary accounts. Finally, it proposes additional audit procedures such as random sampling for confirmation and testing of customer payments to ensure the integrity of financial reporting and the effectiveness of internal controls.