Auditing and Assurance Report for Cheetah Ltd: Financial Analysis

This report provides a comprehensive analysis of the auditing and assurance practices of Cheetah Ltd. It begins with an introduction to auditing and its importance in decision-making, followed by a summary of key risks such as interest rate risk, operational risk, and credit risk. The report then explores financial decisions like the choice between flotation and long-term borrowing, and the purchase versus lease of vehicles. Furthermore, the report examines the corporate governance structure of Cheetah Ltd, considering its compliance with regulations and its impact on financial performance. The conclusion emphasizes the critical role of auditing in risk management and financial analysis. Finally, the report references relevant literature and academic sources to support its findings. The report is designed to provide a clear and detailed understanding of the financial practices of Cheetah Ltd and the impact of auditing and assurance on its operations.

AUDITING
AND
ASSURANCE

TABLE OF CONTENT
 Introduction
 Summary of key risk
 Flotation vs longer term borrowing
 Purchase vs lease to expend fleet of vehicles
 Governance structure
 Conclusion
 References

INTRODUCTION
 Auditing plays an important role in decision making of any
business.
 Auditing is an examination of books of accounts undertaken with
a view to establish whether the company is abiding by all
accounting principles and ethical working.
 The current presentation is based on Cheetah Ltd a retail industry
selling a range of sports and fitness products in Europe.

SUMMARY OF THE KEY RISKS
Risk Mitigating
Interest rate risk Use of hedging strategies
Operating risk More investment in technology
Credit risk Appoint of factoring agency for recovery of
bad debt
Inventory risk Implementation of advance inventory
management system
Market risk Continuous monitoring and research
Economic risk Emphasis on forecasting technique

FLOTATION VS LONG TERM
BORROWINGS
Flotation Long term debt
Flotation is the cost that are incurred at the
time of issuing new securities or converting
private into public company
It is a debt in which interest rate remains
same throughout loan repayment period.
flotation expenses affect the amount of
capital that can be raised by issuing new
securities
Cheetah Ltd used flotation method for further
expansion because it provides new access to
sources of capital
It does not vary either change in lending
rates of bank or change in repo and reverse
repo rate
Cheetah Ltd already have several borrowings
at flotation interest rate so for further
expansion company go for flotation on stock
exchange

PURCHASE VS LEASE TO EXPAND FLEET
OF VEHICLE
Purchase Lease
The term purchase defined as the
acquiring of assets by paying full price in
lump sum or instalment.
leasing is an agreement between lessor
and lessee to use of asset by paying lease
rental for a fixed period of time
Buyer has right to transfer or sell the
assets
On the other side but lessee has no right
to sell the assets to anyone

GOVERNANCE STRUCTURE OF
CHEETAH IS INTENDING TO LIST
 Corporate governance is the rules, regulation and processes or laws which are used by
companies for operation, control and regulation.
 If In accordance with company's constitution
 To acts with in powers
 To promote the success of the company
 Company must meet out its security requirement of listing
 To avoid conflicts between the parties
 Not take benefits from third parties
 To exercise skills, diligence and reasonable care

CONCLUSION
 The above presentation concludes that auditing play crucial role in decision
making as it is a systematic examination of books of accounts of an entity.
 The main objective of auditing is detection and prevention of fraud and errors.
 By evaluation of current presentation it was analyzed that Cheetah Ltd may face
interest rate and operating and other risk in near future.

REFERNCES
 Anderson, D., 2017. COSO ERM: Getting risk management right: Strategy and
organizational performance are the heart of the updated framework. Internal Auditor.
74(5). pp.38-43.
 Chiarini, A., Castellani, P., Rossato, C. and Cobelli, N., 2020. Quality management
internal auditing in small and medium-sized companies: an exploratory study on factors
for significantly improving quality performance. Total Quality Management & Business
Excellence. pp.1-21.
 Drogalas, G. and Siopi, S., 2017. Risk management and internal audit: Evidence from
Greece. Risk Governance and Control: Financial Markets & Institutions.7(3). pp.104-110.
 Knechel, W. R., Thomas, E. and Driskill, M., 2020. Understanding financial auditing
fromservice perspective. Accounting, Organizations and Society. 81. p.101080.