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Essay sample - Auditing - report on the audit of Perfect Pies Lmt
Finance & Accounting
Pages 7 (1757 words)
Report on the audit of Perfect Pies Limited – Financial year ended March 2012 Perfect Pies Limited is regarded as one of the prominent when it comes to selling and marketing edibles. The company is involved in selling pies, pastries and pizzas. It holds a considerable market share and manages its operations through a well established supply chain…
The company’s reserves have also increased during the current financial year which shows that its investors are considering the company lucrative and are planning to have a long term association with it. The company’s current ratio is also very much stable and presents the fact that the company is utilizing its resources prudently. We have been appointed as the statutory auditor of the company, for the financial year ended March 31, 2012, in order to express an opinion whether the financial statement of the company are free from any misstatement and represent a true and fair view of the affairs of the company. By analyzing the financial performance of the company in the prior year, and considering the asset base, the company has been classified as SME (small and medium sized entity). The audit methodology, risk coverage and materiality have all been considered and devised which are relevant for the audit of a SME. The materiality has been calculated by averaging out the profit of the current year and prior year and applying a haircut of 5% which is suitable for SMEs. After the completion of the interim audit, no such event was identified which could question that the financial statements of the company are materially misstated. ...
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