HA3032 Auditing: Financial Performance and Assurance of Schrole Group

This report provides an analysis of Schrole Group Ltd's financial performance, audit, and assurance procedures. It includes an examination of analytical procedures using ratios as per ASA 520, planning materiality assessments, and evaluations of material account balances such as cash equivalents, receivables, and non-current liabilities. The report also outlines a sampling plan for transaction verification and discusses the implementation of this plan within Schrole Group Ltd. Key aspects of the audit and assurance test are analyzed, and recommendations are made to strengthen the company's liquidity, profitability, and capital management. The analysis uses completeness, existence test and rights & obligations, valuation should be used to valuate the assets and liabilities. The report concludes by emphasizing the importance of managing financial leverage and cost of capital, along with the effective implementation of the audit and assurance program.

Assertion test and audit
an assurance of group ltd
Student Name:
Student Id:

Introduction
This presentation emphasises upon the
financial performance, audit and assurance
and material account balance of company.
Opinion certain audit procedures are required
to be done on the part of the auditor.
Key assets and liabilities have been asserted
in the audit and assurance program to
determine true and fair view of assets.
The company chosen for preparation of report
is Schrole Group Ltd (Schrole Group Ltd,
2018).

ANALYTICAL PROCEDURES
USING RATIOS
Analytical procedures are being
performed by the auditors as per
the ASA 520.
Schrole Group Ltd has lower
down its liquidity by divesting its
investment in currents assets.
Profitability of company has also
decreased (Heikal, Khaddafi, &
Ummah, (2014).

PLANNING MATERIALITY
For Materiality, the balance among
the revenue, expenses, equity,
net asset value, or the net
income which is lease volatile
gets selected.
This table shows the materiality
test of the undertaken project
(Delen, Kuzey, & Uyar, 2013).

Financial performance of
company
Company has faced loss in its
busienss and reduced its
profitability.
High solvency risk may result to
destruction of the busienss
Assertion test may also result to
increased cost of capital.

MATERIAL ACCOUNT
BALANCES
Cash & cash equivalents-
Existence, completeness
assertion test.
Trade and other receivables-
Completeness, existence
Non-current financial
liabilities- valuation test
(Ehiedu, 2014).

SAMPLING PLAN
It focuses on transactions to be checked
with a certainty.
check all the transactions and of course
no affordability to lack efficiency
Auditor in setting the transactions that
are must to be checked and to lay an
opinion for the whole set of financials
based on that sample check.
Sample plan may be revised by the
auditor as the audit progresses and the
auditor generates new information

Implementation of Sampling plan in Schrole
Group Ltd,
sample plan may be revised by the
auditor as the audit progresses and
the auditor generates new
information.
There is auditor regarding the
sample chosen and the criteria
involved.
Auditor assertion test is used while
analyzing the financial statement of
Schrole Group

Analysing the audit and
assurance test
Company decides the exact
materiality level is decided at $
80,000.
Provide the reasonable level of
assurance in the opinion that he
provides.
Evaluation of audit program by
setting up the
harmonization(Schrole Group Ltd,
2017).

Recommendation to Schrole
Group Ltd is
 Strengthening the liquidity position
and profitability.
Focused on keeping the financial
leverage low.
Manage the capital to increase the
effectiveness of capital deployment.
It will increase the return on capital
employed and also reduce the cost
of capital.

Conclusion
Company should focus on
managing the financial leverage
and cost of capital
Implementation of the audit and
assurance program.
Completeness, existence test and
rights & obligations, valuation
should be used to valuate the
assets and liabilities.

References
Delen, D., Kuzey, C. & Uyar, A., 2013. Measuring firm performance using
financial ratios: A decision tree approach. Expert Systems with
Applications, 40(10), pp.3970-3983.
Dietrich, A., Wanzenried, G., & Cole, R. A. (2015). Why are net-interest margins
across countries so different?, 2nd ed, USA Pearson.
Ehiedu, V.C., (2014). The impact of liquidity on profitability of some selected
companies: The financial statement analysis (FSA) approach. Research Journal
of Finance and Accounting, 5(5), pp.81-90.
Heikal, M., Khaddafi, M., & Ummah, A. (2014). Influence analysis of return on
assets (ROA), return on equity (ROE), net profit margin (NPM), debt to equity
ratio (DER), and current ratio (CR), against corporate profit growth in
automotive in Indonesia Stock Exchange. International Journal of Academic
Research in Business and Social Sciences, 4(12), 101.
Schrole Group Ltd, 2017, Annual report, retrieved from
https://www.investsmart.com.au/shares/asx-scl/schrole-group-ltd
Schrole Group Ltd, 2018, Annual report, retrieved, from
https://www.investsmart.com.au/shares/asx-scl/schrole-group-ltd
Susilowati, Y. (2017). Pengaruh debt to equity ratio, current ratio, Dan total
asset turnover Terhadap Roa (Studi Empiris Pada Perusahaan lq 45 Non Bank
Yang Terdaftar Di Bursa Efek Indonesia). Students' Journal of Accounting and
Banking, 6(1, pp.11-26