Plan an audit and have access to the preliminary trial balance for your client.

Details of your task
You are planning an audit and have access to the preliminary trial balance for your client.
You would like to use the trial balance to identify accounts that are likely to require significant
audit attention. To access the trial balance for your client, open the document called ‘Trial
balances for task 2’ and follow the directions to the appropriate worksheet.
Your task:
You must choose five (5) accounts from the trial balance for audit testing. In doing so, you should:
 Complete an analytical review using horizontal analysis
of the Income Statement and Balance Sheet using the
trial balance provided,
 Make a preliminary judgement of materiality and complete an
overall (for the financial report as a whole) and performance materiality,
justifying your selected level.
 Use the analytical review and materiality assessment to identify
accounts that are at-risk of material misstatement.
 Consider whether there are any accounts that should be selected regardless of their
quantitative materiality, including one that may be at
risk of fraud.
 Provide a brief rationale for the selection of each of the 5
accounts.
 For each account that you have selected, identify one
assertion that is at risk (i.e. identify 5 assertions in total). Please include an
explanation as to why the assertions are at risk.
 For each account/assertion briefly explain an audit procedure
that could provide evidence relevant to the assertion

Answer preview:

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