Vintage Energy LTD: Financial Health, Risk, and Audit Analysis Report

This report provides an analysis of Vintage Energy LTD's financial health, focusing on key areas such as financial statement analysis, risk assessment, and audit procedures. The report examines the company's internal controls, the impact of competitive pressures, and changes in government regulations. It emphasizes the importance of materiality, and the different types of risk including inherent risk, control risk, detection risk, and audit risk. The report details how these risks can impact the company's financial statements and how auditors can mitigate these risks through various audit procedures. The conclusion highlights the importance of assessing the financial health of the company and the need for proper accounting practices.

VINTAGE ENERGY
LTD

Introduction
 It help to know the company financial health
 Checks whether company is showing true and fair view or not
 Proper Internal Control system in company business
 Proper formulation of accounting standard in company business

Risk in Company Business
 Lack of business
 Competitive Pressure
 Changes in Government Regulations

Lack of Business
 Company is not able to gain the proper amount of business in the
market; as a result, the overall profit of business will fall.
Management of the company has to change its marketing
strategies in order to gain more revenue in the business.

Competitive Pressure
 Industry in which the company is carrying its business operation
is very competitive. This competition can affect the company
power to earn profit in the business, and even the company may
lose its market position in the industry.

Changes in Government
Regulation
 Government keeps on changing its regulation in regards to the
company carrying its business operation in the country. As the
change can give a negative impact on the company business
activities; as a result, it will not able to carry its operation easily
in the market.

Planning Materiality
 Estimation of materiality done by the auditor
 Helps in carrying different audit procedure in company business
 Helps in assessing the business risk in the company financial
statement

Types of Risk
 Inherent Risk
 Control Risk
 Detection Risk
 Audit Risk

INHERENT RISK
 It occur due to error and omission in company financial
statement
 It cannot be controlled by company management
 Internal control cannot detect such kind of risk

Control Risk
 These are the risk which can be control by the management
 Lack of proper internal control can increase the amount of risk in
company business
 Company can minimize this risk by implementing risk
assessment procedure

Detection Risk
 It signifies the risk which auditor will not able to find in company
financial statement with the help of audit procedure
 Auditor is responsible to manage the amount of detection risk in
company business
 Auditor can minimize the risk by conducting additional
substantive procedure in company business.
 Auditor can only be to minimize the risk but still company will
have some amount of detection risk in their business

Audit Risk
 It signify that the company is having material misstatement even
if the audit opinion indicate that the statements are free from
material misstatement
 It can be risk of material misstatement and risk of materiality in
company business
 Auditor can reduce the risk by carrying audit procedure in
company business.