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Audit Risks Assessment Discussion[1821].docx - Audit Risks...

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Audit Risks Assessment Discussion/PresentationCase 1You are employed by Ticker and Company, a firm of certified accountants. Giffnock Corp is a new auditclient recently taken on by the firm. Giffnock Corp is an importer and wholesaler of specialist computerhardware.During the year the company’s chief accountant resigned and in the three months leading up to theappointment of her replacement, no checking had been performed on the monthly reconciliations ofthebank account and the receivables and payables ledgersRequired:a)For the scenario, identify examples of inherent and control risk, clearly explaining the nature ofany misstatements that might arise in the financial statements.b)From the scenario, identify any potential detection risk, and explain how the firm could minimizethis risk.Case 2Lime Ltd is a long established manufacturing company with a year end of September. The senior incharge of the audit has been provided with extracts from the draft accounts for the year ended 30September 20x7 prior to the final audit planning meeting with the financial accountant of Lime Ltd.Extracts from the draft balance sheet as on 30 September 20x7DraftActual20x720x6$’000$’000Property andequipment32,50031,850ReceivablesTrade3,6002,150Other250200Inventoryraw materials1,200870Work in progress350450Finished goods1,8601,610Payables
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Term
Winter
Professor
Dr. Pak Lee
Tags
Balance Sheet, Revenue, Generally Accepted Accounting Principles, Lime Ltd, Giffnock Corp

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