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Auditing Master - Essay Example
We have laid down an audit report identifying weaknesses in the systems of accounting and internal control that could have led to the preparation of accounts that do not reflect the true picture of the company. We have had a preliminary discussion with the Chief Accountants and the Managing Directors of the subsidiary companies also…
May be owing to your big size, the previous audit company needed additional resources in terms of man and woman power and facilities to meet your needs. When the previous audit company held a meeting with the directors in which their responsibilities and the responsibilities of krypton were discussed in details. The Audit Company and krypton agreed on the terms of the audit engagement. The terms of engagement which they agreed upon were documented in a form of a letter of engagement. They then discussed and agreed on the basis on which the audit fee was to be computed and any billing arrangements. We then do not understand why this is still a problem yet to be solved
The last audited accounts were those for the period ended 31st December 2003. As we conduct this audit, making comparatives to the year 2004, it will make good sense if we first conduct an audit for the year 2004.
To determine the implications of the figures, analytical procedures are usually performed on the financial information. Analytical procedures consist of mainly trend and ratio analysis with information being inferred from the resulting figures. From the financial statements of the company the following was established.
Ordinarily a 10.16% increase in cost of sales should lead to a corresponding de ...