SYZ conducts Independent Audits in Accordance with Australian Auditing Standards - Accounting Assignment Help

Assignment Task:

Task:

• Brendan Hale Jason Sugathi
• Audit Responsibility
• SYZ conducts independent audits in accordance with Australian Auditing Standards in order to provide assurance that this report is free of material misstatements. The audit is influenced by factors such as:
• Professional judgment
• Selective testing
• Inherent limitations
• Availability of conclusive evidence
• This Audit cannot guarantee that all misstatements will be detected.
• Risk Assessment
• Risks that potentially affect materially of Financial Statements Level of Risk
• High
• Medium
• Low
• Comments:
• Existing valuations of infrastructure and sale of assets
• High Large sale or assets reported giving rise to high to large transactions that can be reported
• Contracts and Procurements Medium Disclosed that the Finance director’s husband, Peter James is now supplying electronic components to Stronghold Limited with no formal agreement in place.
• Key information Disclosed. Medium Stronghold Limited in has entered many interwind dealings with family and friends. Resulting in dealings that affect the Companies P&L.
• Revenue – transactions, invoicing and sales High The company has a large volume of transactions that need to be manual impute and accurate. This leaves for a high possibility of inaccuracies or falsified transactions
• Audit Key focus areas
• This is where we will collect our Audit evidence on our chosen key areas of focus which includes
• assessing internal controls
• substantive testing
• Reaching out to management for additional information
• Below is a number of key issues I have summarised from the information that was provided in the assessment. Please choose an area you would like to focus on and prepare finds and evaluation of this area.
• No formal agreement with suppliers / 1 major supplier has gone bankrupt
• Current lease at lower than market rate from CEO’s brother ($5000 per month)
• Factory acquired four years ago at 6million with useful life of 40years. No independent valuation has been carried out. Current value est at 4.5million
• The auditor has obtained the account of internal control for the cash receipts and billing functions in Stronghold Ltd as the preliminary investigation. The accounts receivable supervisor at Stronghold Ltd independently verifies the pricing and other details on the charge form by reference to a management-authorised price list, corrects any errors, prepares the invoice, and supervises a part-time employee who mails the invoice to the customers. The accounts receivable supervisor electronically posts the details of the invoice in the accounts receivable subsidiary ledger; simultaneously, the transaction’s details are transmitted to the bookkeeper. The accounts receivable supervisor also prepares a monthly computer-generated accounts receivable subsidiary ledger without a reconciliation with the accounts receivable control account, and a monthly report of overdue accounts
• The bookkeeper receives the details of transactions from the accounts receivable supervisor and the cashier for journalising and positing to the general ledger. After recording the remittance advices received from the cashier, the bookkeeper electronically transmits the remittance information to the accounts receivable supervisor for subsidiary ledger updating. The bookkeeper sends monthly statements to customers with unpaid balances upon receipt of the monthly report of overdue balances from the accounts receivable supervisor. The bookkeeper authorises the accounts receivable supervisor to write off accounts as uncollectible when six months have passed since the initial overdue notice was sent. At this time, the credit manager is notified by the bookkeeper not to grant additional credit to that customer.

Evaluation

• This is where we will put our finds on the company and disagreements, we have on managements reporting.
• We will use this for our debate with management to bring up any issues we have.

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