Auditing Coursework Assignment Sample

Assignment Structure

1. Result of an analytical procedure

2. Risk of Material Misstatement (Inherent Risk) at the Financial Report

a. The integrity of management
b. Management experience, knowledge, and changes during the period
c. Unusual pressure on management
d. Nature of the entity’s business
e. Factors affecting the industry in which the entity operates

3. Risk of Material Misstatement (Inherent Risk) at the Assertion Level

a. Explain why the account balance is at significant risk of material misstatement

c) Detail one (1) relevant substantive audit procedures to address the assertion at risk as identified in b) above

d) Detail one (1) relevant practical internal controls that would mitigate the risk in relation to the assertion at risk

Introduction

One of their best quality-based evaluations has been made possible by the fantastic inquiry into the organization's crucial importance. It has been thought that the review-based evaluation in a clear direction through their capability appraisal may be helpful in keeping gotten to capability related to the upcoming part. According to the surveyed hugeness, the storm cellar associated with the administration and dangers account has been valued. Therefore, the offered evaluation and its size would be important for the thorough procedures.

Through its prior and earlier annual reports, the higher number of techniques and this level of value-based fulfillment have been recognized. The unmistakable, as well as unstoppable materials, have been provided, and most of the working criteria have been published as a result. Through the appraisal, better strategies and it's level best places have been understood. Through the approach of top supervisors to be overseen, greater quality and higher competency have been evaluated.

1. Result of The Analytical Procedure

Fortescue Metals Ltd has been successful in maintaining an optimum level of yearly company performance. As a result, the company's financial performance may be accurately calculated in the market with the help of important ratios like the gross profit margin, net profit margin, operating profit margin, current and quick ratio, and others.

Table 1: Fortescue's main ratios calculated (Source: Fmgl, 2019)

In light of the discussion above, it is evident that the company was able to maintain a suitable level of business performance in 2019. Despite the company's financial performance declining in 2018, the potential for business performance stabilized in 2019. Additionally, the organization's cash assets have been found to have increased as a result of the strong sales revenue in the year 2019. (Fmgl, 2019). Therefore, it could assist the company in acquiring a competitive edge and sustaining suitable performance year after year.

Regarding gross profit margin, it can be noted that the company's management effectiveness remained flat in 2018, which reduced the prospective profitability rate. Nevertheless, the potential for profitability has grown quickly as a result of the senior executives accurate evaluation of the financial statement. The operating profit and net profit margins have risen along with the expected gross profit margin in 2019. In recent years, it has assisted the company organization in preventing further financial loss. Additionally, the business may steer clear of unneeded market obligations in the years to come. Fortescue Metals Ltd. was unable to boost the liquidity of its assets in 2018, as evidenced by the liquidity ratios such as quick ratio and current ratio. The potential problem has grown steadily as the assets' size has shrunk in comparison to market obligations. But Fortescue Metals Ltd.'s senior management has assessed the existing circumstance and taken the necessary steps to address them. In 2018, it contributed to a rise in the current ratio rate.

In light of the aforementioned debate on auditing assignments, it can be concluded that the organization's market position has stabilized this year. However, the firm was compelled to adopt effective management practices as a result of the avoidable losses in 2018. The senior executives of Fortescue Metals Ltd. appointed a panel of outside auditors to assess the company's operational efficiency. As a result, the organization's future potential for business performance has increased. Additionally, 2019 will see an increase in the efficiency of audit management as both internal and external auditors examine the financial statements. The quality of audit evaluation has been improved as a result of both internal and external auditor reviews. As a result, the company's potential crisis can be effectively mitigated. Additionally, the corporation may be able to deliver appropriate annual business performance.

2. Risk of Material Misstatement (Inherent Risk) in the Financial Report

a. Integrity of management:

One of the outstanding businesses in the mining and iron ore industries is FORTESCUE METALS LTD. The company has become one of the fastest growing in the nation because of the iron ore extraction and its point-based evaluation. One of the areas of strong growth has been the evaluation based on the internal and external hazards assessment. The internal and external evaluation of the company's fundamentals has been used to manage the managers and the director. One of the remarkable directors whose eligibility has been continually raised is the DirectorMR, Andrew Forrest (Dai & Vasarhelyi, 2015).

The duty and portion of management must be understood through the portion of professionalism, which is dependent on having many activities that could be maintained in accordance with the high standard that has been used. The recent future has been entangled with the healthy and strong link, which has been extremely quality-based work. The management has adopted the right essence in the satisfied key. The high degree of team management and its level-based thoroughness have been successfully managed through appropriate comprehension.

b. Management experience, knowledge, and changes during the period

One of the best chances that would be significant through the direct and indirect examination in perspective has been guaranteed for the company's management. The extremely thorough and significant analysis has been broken down by step-by-step procedures to show off its level of apprehension through the appropriate significance. The ASX Governance Council has been guiding participants via the better way to take its perspective on higher quality. This approach is of the highest quality, and it's level best assessment in the right and enhanced procedure. The openness, including the direct client-based approach and its use at a higher level in its Lela-based component. The more ambitious sections have been more accurately used to gauge management effectiveness and vice versa. The cost-saving strategy has been considered, and it could be applied if they were honest and empowered. The high quality of management that will be applied has allowed the high performance-based work and its evolution to be understood. Both the theory and the practice have been applied simultaneously in the respected position. The governance Amanda the sustainability-based framework that has been done in the organization has dealt with the ethical and unethical-based globe. One of the better characteristics that may have the greatest impact has been acknowledged to be the thorough examination and its level-based methods (Smith & Van Der Heijden, 2015).

The level best arrest and its associated flat have been controlled according to their final significance in terms of better segregation. The high standard of management has been pushed together with the HR management and audit-based management, which might be spartan for the better assessment and establishment of the organization. Most of the suckered measures have been thought to be produced through the diversity and its dependability of keeping the equilibrium.

c. Unusual pressure on management

The management must process the pressure put on it to make increasing amounts of profit in decreasing amounts of time through its highest level of comprehension. Strong management has made use of the use and many sorts of appointments, including sisals and exposure of permeability. The senior chair and the person who is motivated by the improvement of viewpoints must comprehend the right assignments, such as non-executive and executive-based management. Through its right acceptance and complete management, compensation and its faultless assessment have been achieved. Through the development of a better assessment and its associated level of aperture, internal approaches may now make sense of it.

The major responsible assessment that may be useful via the overall existence through the level of approaches is made by the directors and executive management. Through the company's governance, the board committee has established the intense pressure and its level-based approaches. The company's anticipated expansion is predicated on some items needing to be altered in accordance with precedent. The strong performance-based pressure and its significance could increase the growth's engagement a little bit.

d. Nature of the entity’s business

The company's founders and chairman have owned it with a very limited number of shares that have been precisely controlled in the context of techniques relating to improvement. The business has been taken into account by the improvement of each individual property's entirety and overlaps, and the shared basis of development has been taken into account through the statement's total sales volume. The business entity is compared to a business that only makes money through internal and external announcements. The dividend and share basis of the component, which is based on having the consideration to be signaled, has been taken into consideration.

e. Factors affecting the industry in which the entity operates

There are many different types of things that could have a direct or indirect impact and could serve as an excellent foundation for improvement. The overall importance of the growth margin would be taken into account after the influence of entity operation, and it is likely specifications, such as the rate of growth, have been excluded. Entities like the tiered business approach relate to being taken through the higher approaches in terms of obtaining better quality for the goods and other export-related items. Through their work methods, the GDP and other financial-based parts are taken into account in accordance with the overall quantity of consideration (SimMet, Carson & Vanstraelen, 2015).

3. Risk of Material Misstatement (Inherent Risk) at the Assertion Level

a. Explain why the account balance is at significant risk of material misstatement

The corrective procedure has been used to explain the higher risks associated with market opportunities in terms of misstatement. Statements that could be advantageous to the firm could put people in danger, and those who might not normally be at risk could be made to perceive them as such in the statement's potential.

However, according to the comprehensive management of the early and final stage of assessment, the company has exclusive confidentiality to the company director and manager. The entries must be in their specific position due to the material assessment of the company's current assets as liabilities (Beard et al. 2019). The specific situation, such as the excellent foundation of their improvement through the anticipated methods. The assets could have a significant impact on the company's profit and other aspects, which is very beneficial for the best management feasible in terms of company-based accomplishments. The correct management procedure could make extensive use of high-quality-based methodologies.

b) Explain The Key Assertion at Risk of Not Being Valid

c) Detail one (1) relevant substantive audit procedures to address the assertion at risk as identified in b) above

Other Current Assets

Inquiry

The other assessment was made using one of the most accurate bases for calculation and methods that could work after observation. The right number of auditors will be present during the asset observation procedure to assure quality. The value must be significantly greater than other values. It might be far more dependable than other items.

Property, plant, and equipment

Observation

The observation must be carried out carefully and through the equipment based on the outer level of significance, with the final significance being noticed. The use of equipment maintenance is predicated on having higher importance through the final evaluation for a better assignment. Through its associated administration, the suitable implementation through better applications has been fixed.

Intangible assets

Recalculation

The right execution of the recalculation has been taken into consideration, and we also need to be concerned about the points-based assessment.

d) Detail one (1) relevant practical internal controls that would mitigate the risk in relation to the assertion at risk of the many kinds of tasks. For the heavy and accumulated analysis to be used, a computation has to be made first. It must be accurately managed if better services are to be managed in accordance with the document assessment. High levels of evaluation using the convenience assessment's intermittent level of assessment.

Conclusion

One of their top quality-based assessments has allowed for a thorough understanding of the company's significant significance. The audit-based evaluation has been taken into account when providing final advice through their proficiency assessment and may be useful in maintaining accessed competency in relation to the following segment. The foundation around the risk account and management has been understood in accordance with the significance assigned. The awarded evaluation and its associated relevance would be highly pertinent in several ways. Through its previous and preceding yearly reports, the higher level of approaches and this level of quality-based satisfaction have been understood. The majority of the working criteria have been issued using both tangible and intangible assets as criteria. Through the assessment, the better strategies and their level best components have been understood. The general manager's strategy of managing exclusively has been evaluated to produce higher quality and higher competency.

Reference List:

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J. Beard, P. Coram, R. Espahbodi, & T. J. Mock (2016). If adjustments to audit reporting standards are warranted, recent academic research is supportive. 30(2) of Accounting Horizons, 255-275.

Vasarhelyi, M. A.; Dai, J. (2017). Moving toward accounting and assurance based on blockchain. 31(3), 5-21, Journal of Information Systems.

Jones, M. J., Edgley, C., and Atkins, J. (2015). A field study approach to the application of the materiality idea in social and environmental reporting assurance. 47(1), 1-18 of The British Accounting Review.

Fmgl. (2019). (2019). Retrieved on September 20, 2019, from www.fmgl.com.au/docs/default-source/annual-reporting-suite/fy19-annual-report.pdf.

Mohamad, N. R., Salleh, & Hardan, A. O. (2016). Ancestors of human capital A conceptual analysis of the effects of the international standard on quality control 1, or isqc 1, on the performance of audit firms in Jordan.

Schmidt, J. J., Valentine, K., and S. J. Kachelmeier (2017). The consequence of important audit matters being disclosed in the auditor's report serves as a disclaimer. working document

Mayhew, B. W., Tegeler, A. C., and Z. T. Kowaleski (2018). An experimental approach to the effect of advisory services on audit quality. 56(2), 673-711, Journal of Accounting Research.

Carson, E., SimMet, R., and Vanstraelen, A. (2016). International research on archival assurance and auditing: trends, challenges, and prospects. A Journal of Practice & Theory: Auditing, 35(3), 1-32.

S. Smith and H. Van Der Heijden (2017). Analysis of the usefulness, standardization, and assurance of KPIs. 18(1), 63-86 in Journal of Applied Accounting Research.