Subject Code : PACC6002
PACC6002: Auditing  Assessment Answer
Assessment Task:

Distinguish between analytical procedures required by ASA315 and ASA520

You have learned that ASA 315 stipulates analytical procedures be used as risk assessment procedures, while ASA 520 stipulates their use as substantive procedures. The standards also discuss the nature and purpose, the extent of reliance on analytical procedures and subsequent investigation of unusual items identified. Using the financial report/statements of the company that your Group Assignment and

Presentation has chosen:
a) identify and briefly explain one way you could use analytical procedures as risk assessment procedures, and

b) identify and briefly explain one way you could use analytical procedures as substantive procedures during the audit.

This requires you to use the material from your chosen company to illustrate the application of ASA 315 and ASA 520, using Analytical Procedures to the audit process. You are asked to provide examples from the financial statements to support your explanation.

Use the following templates for your answers.

Analytical procedures as risk assessment procedures (ASA315)
(a) Analytical Procedure Explanation

Analytical procedures as substantive procedures during audit (ASA520)
(b) Analytical Procedure Explanation

Part 2

Assess audit risk, list key assertions and audit evidence of the chosen company From the information available in relation to your chosen company in your Group Assignment:

a) Assuming that going concern is not an issue, identify one key asset accounts at risk. This will be from the Statement of Financial Position (Balance Sheet).

b) For the asset account identified above:

i. Provide a brief explanation as to why the asset account is at risk;

ii. List ONE key assertion (as per ASA315.A128) where the audit effort should be concentrated; and

iii. Describe one substantive test of detail you would perform to gather sufficient
appropriate evidence in relation to the assertion identified in ii. above.

c) Identify one Statement of Comprehensive Income (Income Statement) expense account at risk, which is unrelated to the asset accounts identified in a) above. Provide a brief explanation of why it is at risk and list ONE key assertion (as per ASA315.A128) at risk.

Use the following template for Parts a) & b):
a. Asset Account b(i). Explanation of why a risk

b(ii). Key Assertion (Identify ONE assertion audit should be concentrated)

b(iii). Substantive test of detail (Describe ONE)

 

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  • Posted on : October 29th, 2018

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