Bsbwor501 Unit 1 Assignment
MAA705 – Corporate Auditing
Trimester 2, 2014
GROUP ASSIGNMENT
Due Date: 8th September 2014
Word Count: 1300 (Including references)
NAME
Student ID
Surbhi Gujral
212251014
Varun
212518186
Pratik Modi 212445608
PART A
Beer Brewing Limited is a publicly listed company on ASX since 5 years. It’s into manufacturing of beer. XYZ is a firm of chartered accountants established in 2002. This firm is growing at good pace and increasing its client base. However, XYZ is bidding for first time to audit an ASX listed company, in past it has been auditing small and medium sized businesses. Its experience in Beer manufacturing company audits is quite limited, but has some experience with drinks manufacturers …show more content…
This risk is generally associated to mistake and is not done by the auditors on purpose. Analyzing and testing data further can minimize this risk to a great extent. (Vandervelde et al 2008).
Major transaction and accounts that warrant increase the audit effort.
In case of BBL omission of average collection 10% in 2011 from 33.56 to 40.32.when average collection period increases it means that company is taking extra time in collection debts from debtors increased period. Considering the increase in average collection period the doubtful debts should have increased as if the information is not taken seriously it may lead to bad debts that affects the profits of the company. Though, the management confirmed that necessary steps have already been taken for fast debt recovery.
Other threshold of materiality is qualitative in nature. These include trends in profitability, misstatement that changes a loss into income, effect of statement on segment information, existence of statutory reporting requirements, implications of misstatement involving frauds possible illegal acts, misclassification in operating and non-operating …show more content…
When the control risk is deemed to be low more extensive undertaking and documentation of controls is performed. Whereas when the control risk is low more focus is on performing detailed substantive procedures on balances and transactions is considered and less extensive understanding and documentation of control is performed.
When the entity's internal control system is not considered to be effective the preliminary assessment is determined to be high and once it is high it is not necessary for further audit testing of controls.
Since the BBL Company's internal controls are questionable auditor should determine the company's control risk level and based on that assessment one can use both substantive procedures and test of
Trimester 2, 2014
GROUP ASSIGNMENT
Due Date: 8th September 2014
Word Count: 1300 (Including references)
NAME
Student ID
Surbhi Gujral
212251014
Varun
212518186
Pratik Modi 212445608
PART A
Beer Brewing Limited is a publicly listed company on ASX since 5 years. It’s into manufacturing of beer. XYZ is a firm of chartered accountants established in 2002. This firm is growing at good pace and increasing its client base. However, XYZ is bidding for first time to audit an ASX listed company, in past it has been auditing small and medium sized businesses. Its experience in Beer manufacturing company audits is quite limited, but has some experience with drinks manufacturers …show more content…
This risk is generally associated to mistake and is not done by the auditors on purpose. Analyzing and testing data further can minimize this risk to a great extent. (Vandervelde et al 2008).
Major transaction and accounts that warrant increase the audit effort.
In case of BBL omission of average collection 10% in 2011 from 33.56 to 40.32.when average collection period increases it means that company is taking extra time in collection debts from debtors increased period. Considering the increase in average collection period the doubtful debts should have increased as if the information is not taken seriously it may lead to bad debts that affects the profits of the company. Though, the management confirmed that necessary steps have already been taken for fast debt recovery.
Other threshold of materiality is qualitative in nature. These include trends in profitability, misstatement that changes a loss into income, effect of statement on segment information, existence of statutory reporting requirements, implications of misstatement involving frauds possible illegal acts, misclassification in operating and non-operating …show more content…
When the control risk is deemed to be low more extensive undertaking and documentation of controls is performed. Whereas when the control risk is low more focus is on performing detailed substantive procedures on balances and transactions is considered and less extensive understanding and documentation of control is performed.
When the entity's internal control system is not considered to be effective the preliminary assessment is determined to be high and once it is high it is not necessary for further audit testing of controls.
Since the BBL Company's internal controls are questionable auditor should determine the company's control risk level and based on that assessment one can use both substantive procedures and test of