Assignment Part A: Discussion on the audit report
The audit report is the key product of the auditing and assurance process. Using an essay format, discuss the values, issues, and future of the audit report. You are required to cite at least three readings, and two of them must be academic articles from the literature (use the Google Scholar or UoN's library/database). The textbooks such as Moroney, et al. (2017) do not qualify as an article. APA 6 th is required with an appropriate reference list.
Why do we need the report....the value of the report, auditor liability, rely on it to make decision, future of audit report - what is current academic stand point.
Assignment Part B: Report
Report is for your manager - not the client!! Your recommendation and planning to your manager!! I understand the client and this is what we need to do...
Review Cloud 9 - solutions went through in class and apply to this! Create report that looks like business document about your planning the audit, i.e. Audit Planning Report.
Requirements:
Assume you are one of the audit team members who will conduct the financial report audit - year ending 30 June 2020 - for CurtainsMaster. Using the company's information given above, prepare a report dated June 10, 2020 for the audit manager outlining the audit plan. As it is the beginning of the audit do not prepare a final audit report/opinion. The report should cover the following areas under the suggested headings:
1. Risk Assessment
From the background and financial information given (attached):
List six (6) potential significant risks, including both inherent risk and control risk,
For each risk listed, identify the type of risk (inherent risk or control risk) and its level ('high', 'medium', or 'low' in relation to the likelihood and materiality of the risk occurring), the associated financial accounts, and key assertions that would be affected. (A risk should be classified as 'high', 'medium', or 'low' if it is 'highly likely', 'maybe', or 'unlikely' respectively to be present and material.)
2. Planning Materiality
The audit firm dictates that one planning materiality amount is to be used for the financial statement as a whole. The planning materiality bases are as follows:
|
Base
|
Threshold (%)
|
|
Profit before tax
|
05-Oct
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Turnover
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0.5-1
|
|
Gross profit
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2.0-5
|
|
Total assets
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0.5-1
|
Based on the information given and your risk assessment,
Select the base for planning materiality that you believe is most appropriate, and provide three reasons justifying the base you have chosen,
Calculate the planning materiality.
3. Analytical Procedures
As part of the risk assessment phase, you conducted analytical procedures and the results. Using the attached analysis and financial information given, discuss the results of the analytical procedures outlining six (6) potential problem areas (that is, where possible material misstatements in the financial reports exist) and any other special concerns (for example, going concern). Specify the account balances and related assertions that would require particular attention in the audit.
4. Conclusion
Based on the risk assessment processes and analytical procedures undertaken in the previous sections, conclude the overall level of risk, materiality of the firm and recommend the areas of audit focus.
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Attachment:- Auditing and Assurance.rar