INS3013 - Financial Auditing - Case Study - Finance Assignment Help

Assignment Task

SCENARIO

You are the audit manager of a medium-sized firm and have just received a package from Rachel Jones, the financial controller of Telechubbies Ltd, a toy manufacturer. This is your firm’s first year as auditor of Telechubbies. The information contained in the statement of financial position and income statement overleaf was prepared for a board meeting and Rachel felt it might be useful to you in preparation of the forthcoming audit for the year ended 31 December 2020.

During a brief telephone call with Rachel, you made the following notes:
1.    One of the conditions of the long-term loan is that the company is not to exceed a debt to-equity ratio of 2:1 at any time. The loan is reviewed each year on 31 December.
2.    Provision against inventory obsolescence is provided for at a flat rate of 10%. The amount provided in previous years was 20%. Rachel said that the company believes it has been overly conservative in previous years and 5% is a more realistic level, given the nature of its products.
3.    The long-term loan receivable is from a company involved in the development and production of computer software. It is owned by one of the directors.

Required
(a)    Suggest possible sources of information that would help you gather sufficient knowledge of the business to perform the audit of Telechubbies Ltd.
(b)    Perform preliminary analytical procedures using the information provided. Identify the key areas that would require special attention during the audit of the 31 December 2020 financial statements
(c)    Outline ways in which the analytical procedures performed could be extended using the information collected in (a).
(d)    Suggest ways of using analytical procedures as a substantive test during the audit of Telechubbies Ltd.

This INS3013 - Finance Assignment has been solved by our Finance experts at My Uni Paper. Our Assignment Writing Experts are efficient to provide a fresh solution to this question. We are serving more than 10000+ Students in Australia, UK & US by helping them to score HD in their academics. Our Experts are well trained to follow all marking rubrics & referencing style.
Be it a used or new solution, the quality of the work submitted by our assignment experts remains unhampered. You may continue to expect the same or even better quality with the used and new assignment solution files respectively. There’s one thing to be noticed that you could choose one between the two and acquire an HD either way. You could choose a new assignment solution file to get yourself an exclusive, plagiarism (with free Turnitin file), expert quality assignment or order an old solution file that was considered worthy of the highest distinction.