ACC5218: Auditing Assignment - University of Queensland

Internal Code: MAS 4477

Auditing Assignment Help

Question 1: You are the senior auditor conducting the audit of Grasslands Pty Ltd, a large distributor of lawn mowers and garden accessories. This is the first year your audit firm has performed the audit of this company. As part of the planning work, you have performed analytical procedures on an annualised basis and compared the results to industry averages and lasts year’s audited financial information. The results are given below: Required: Based on the information given: (a) explain the general meaning of each of the above ratios; (b) discuss the conclusions that you can draw about Grasslands Pty Ltd financial position; (c) identify potential audit risks to be investigated further. Question 2: Corroboratory evidence inspected by an auditor in the course of an audit includes: a) a letter from the bank confirming the company’s bank balance, which is sent directly to the auditor b) the creditor’s monthly statement from the company’s files c) copies of sales invoices sent to customers from the company’s files d) delivery notes, sent with goods, receipted/signed by customers and held in the company’s office e) title deeds for the company’s properties, which are held at the company’s safe deposit box at the bank f) a bank statement from the client’s files g) material requisitions filed in a storeroom h) a board minute authorising purchase of new equipment. Required: For each item, discuss and comment on its reliability as audit evidence. Is the evidence highly reliable, reliable or of low reliability?