Review of client business and perform audit risk analysis

Assignment Help Risk Management
Reference no: EM13290373

Objectives: understanding planning stage of the audit process: review of client business and perform audit risk analysis

Assume that you are audit senior in an accounting firm. Your firm has recently won an audit for a company that you selected in assignment 1. The whole assignment 2 should be prepared based on your selected company from assignment 1 in the form of report. The assumptions are that your firm does not have any other clients that operate in this industry and your audit partner is concerned about his lack of knowledge of the industry the company is operating in. He is aware of the requirements of ASA 315 (par 25 and 26).

Your audit partner asks you to prepare a memo/ report on the 'state of the company's industry' and associated risk factors. Your report must cover the requirements below and exhibit effective communication (attributes such as coherent writing style, proofreading and proper referencing)

Required:

a) Prepare a list of three useful sources (the relevant information from the particular source must also be listed) that you can use to obtain the required industry knowledge. An example of a valid source of research material would be Australian Bureau of Statistics

b) Prepare a memo to the audit partner on the 'state of the company's industry' and associated risk factors.

c) Identify a relevant general balance-related and a transaction-related audit objective based on the finding from the risk factors in part b). The required audit objectives here must be specific to the company that you are working on and causal relationship with part b) must be established.

d) Perform overall analytical procedures to identify significant changes in the financial positions or results of the business which require detailed investigation and explanation. The overall analytical procedures / risk analysis should at least cover the areas in liquidity, (can the business meet present obligations?) solvency (can the business continue to operate for the foreseeable future?) and profitability (is the business profitable?)

General requirement:

The length of the writing / report must not exceed 1000 words. Words in Bibliography or Reference Lists section are not included in the word count.

4 marks will be given for the contents (sources and understanding of industry and able to link audit objectives with findings) and 1 mark will be given for correct referencing (Harvard or APA) and clear paragraph structure (topic sentences in paragraphs and show coherence with careful proofreading)

The information required to work on this assignment includes company's annual report (directors' report and financial report) and any media releases related to the company. There are Excel files on financial statement line data (historical) for all ASX listed companies provided for your needs (optional) in performing the analytical procedures.

Reference no: EM13290373

Questions Cloud

What condition determines the accuracy of this assumption : During an electrostatic field experiment, you assume that the electric field lines are in the plane of the paper, What condition determines the accuracy of this assumption
Effective in increasing the likelihood that a baby : The Genetics & IVF Institute conducted a clinical trial of the XSORT method designed to increase the probability of conceiving a boy. As of this writing, 291 babies were born to parents using XSORT method, and 239 of them were boys. Use a 0.01..
Find your average speed for the trip : You drive west at 74km/h for 25min , then follow a road that goes 41^\circ south of west, driving at 93km/h for another 36min. Find your average speed for the trip
Calculate the cost of equity using the sml method : Floyd Industries stock has a beta of 1.21. The company just paid a dividend of $0.70, and the dividends are expected to grow at 6 percent. The expected return of the market is 12 percent, and Treasury bills are yielding 5 percent.
Review of client business and perform audit risk analysis : Understanding planning stage of the audit process- review of client business and perform audit risk analysis
Estimate of country roads cost of equity is find percent : If the stock sells for $31.2 per share, your best estimate of Country Road's cost of equity is FIND percent. (Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16))
Determine the initial acceleration of the mass : Two 1.7 kg masses are 1.7 m apart on a frictionless table. Each has +1.1 µC of charge. What is the initial acceleration of the mass if it is released and allowed to move
Comparing the variability of the power of a laser at current : An engineer was interested in comparing the variability of the power of a laser at current levels of 16 amps (X) and 20 amps (Y). To do so, random samples of 25 observations of power readings were obtained at each current level. The samples ..
Advantages-disadvantages of standardized test methods : What are the advantages and disadvantages of standardized test methods for materials ? " american society for testing and materials"

Reviews

Write a Review

Risk Management Questions & Answers

  A project report on mutual funds

This project report speaks of the core and future aspects of Mutual Funds and the present challenges to cope with.

  Evalaute the theoretical option price

Evalaute the theoretical option price

  Risk and return

Investing in the stock market and Risk-free investment and inflation

  Evaluate the gross profit

Evaluate the gross profit

  Discuss concepts of risk and management

Risk lies at all levels of business activity. There are many different kinds of risks within an management as well as ways to manage risks.

  Determine the average risk premium

Here are stock market & Treasury bill percentage (%) returns between 2006 and 2010: Determine the average risk premium

  Hypothetical healthcare organization ratios

Discuss and explain why one should apply caution when using financial ratios for analyzing a healthcare management's current financial position and future viability.

  Discuss role of risk assessment

The financial information has been dominated currently by stories of financial institutions that have mis-measured risk as part of subprime mortgage crisis.

  Calculate maturity risk premium

The real risk-free rate is 3 percent, & inflation is expected to be 3 percent for the next two years. A 2-year Treasury security yields 6.3 percent.

  Selcting best option for portfolio

Suppose you are planning investing in two stocks to form a portfolio. Assume you do not like risk. Which one of given stock combinations will you select for your portfolio?

  Result of systematic or unsystematic risk

It has been a little over one year since the collapse of Lehman Brothers which was the first major event in the downturn of our stock market & economy.

  Determine risk management

Determine risk management? Discuss the importance of risk management in an organization? How does risk management mitigation create value for an organization?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd