Audit Planning and Control, Accounting Assignment Homework Help

timer Asked: May 14th, 2016
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Question Description

Audit Planning and Control

It is common industry knowledge that an audit plan provides the specific guidelines auditors must follow when conducting an external audit. External public accounting firms conduct external audits to ensure outside stakeholders that the company’s financial statements are prepared in accordance with generally accepted accounting principles (GAAP) or International Financial Reporting Standards (IFRS) standards.

Use the Internet to select a public company that appeals to you. Imagine that you are a senior partner in a public accounting firm hired to complete an audit for the chosen public company.

Write a four to six (4-6) page paper in which you:

  1. Outline the critical steps inherent in planning an audit and designing an effective audit program. Based upon the type of company selected, provide specific details of the actions that the company should undertake during planning and designing the audit program.
  2. Examine at least two (2) performance ratios that you would use in order to determine which analytical tests to perform. Identify the accounts that you would test, and select at least three (3) analytical procedures that you would use in your audit.
  3. Analyze the balance sheet and income statement of the company that you have selected, and outline your method for evidence collection which should include, but not be limited to, the type of evidence to collect and the manner in which you would determine the sufficiency of the evidence.
  4. Discuss the audit risk model, and ascertain which sampling or non-sampling techniques you would use in order to establish your preliminary judgment about materiality. Justify your response.
  5. Assuming that the end result is an unqualified audit report, outline the primary responsibilities of the audit firm after it issues the report in question.
  6. Use at least two (2) quality academic resources in this assignment. Note: Wikipedia and other Websites do not qualify as academic resources.

Your assignment must follow these formatting requirements:

  • Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
  • Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.

The specific course learning outcomes associated with this assignment are:

  • Plan and design a generalized audit program.
  • Determine the nature and extent of evidence accumulated to conduct an audit after considering the unique circumstances of an engagement.
  • Evaluate a company’s various risk factors and the related impact to the audit process.
  • Evaluate effective internal controls that minimize audit risk and potentially reduce the risk of fraud.
  • Use technology and information resources to research issues in auditing.
  • Write clearly and concisely about auditing using proper writing mechanics.

Tutor Answer

School: Purdue University

External Audit
Student Name

Audit planning consists of process involving three steps necessary to be taken by external
auditor. Audit committee analyzes it. The audit process involves these three steps: understanding
of the business, its environment and control systems which are internal to organization. The
purpose of the audit planning is to take everything in account for the performance an audit. It is
necessary for the auditors to know the nature of the business, the industry, the firm belongs to. The
inconsistencies point out to the malfunctioning in the internal systems and pinpointing the mistakes
and flaws and to correct them is the ultimate objective of the audit.
An important reason of audit planning is to know the industry and business of the client.
This is done for the assessment of risks of audit, risks of business of client and risk of the
misstatements relating to financial statements. The other allied components of the audit planning
are to ensure the materiality and analyze the risks pertaining to audit including inherent risks. An
analysis into the risks of the fraud is also carried out. It also aims at a conclusive audit plan and
program. (Charan, 2005).

The analytical procedures involve the data relating to industry. The data related to past,
the expectations of the client in term of results, what auditor expects to be the results and the
expectations regarding results by employing non financial information.
Apple Inc should understand the business thoroughly it is in, the company is in the
business of manufacturing the software and hardware products. Apple should also understand the
environment of the business along with the internal control systems. Apple should also look into
the misstatements in the financial statements and should carry out the design procedures in line
with the analysis of the risk level.

The two performance ratios I have picked are: cash ratio and accounts receivables turnover.
Companies are in a need of certain level of liquidity. The cash ratio is effective to analyze the
ability to pay debts instantaneously. The activity ratios in terms of accounts receivables are of
extreme importance to the auditors. The account receivables turnover ratio is used to analyze the
extent of accounts which are uncollectable.
During the audit I would analyze the balance sheet and income statement of Apple. The
three analytical procedures I would use during the external audit. I would perform preliminary
analytical review to gain an insight into comprehension about business and the environment of the
business. (Charan, 2005)
In order to minimize the risk linked with misstatements of the financial statements. To
ensure, that the financial statements of Apple are in line with my comprehension. If would find
any malfunctioning I would go for risk assessment again and would employ and augmented...

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awesome work thanks

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