An Audit Risk Assessment On Telstra Corporation Limited Using Advanced Accounting Techniques And Auditing Knowledge

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Contents Introduction 2 Telecom Industry: 3 Audit Risk Assessment 3 Audit Risk Model 3 Inventory Valuation Risk 3 Intangible Asset valuation risk 4 Foreign Currency Risk 4 Tax Risk 4 Compliance Risk 4 BUSINESS RISK 4 Liquidity Risk: The liquidity risk of Telstra can be analysed from the help of these two ratios 5 Quick Ratio 5 Current Ratio 5 Control Risk: 5 Inventory and Warehousing cycle: 5 Sales and collection cycle: 5 Payroll and personnel cycle: 6 Acquisition and Payment cycle: 6 Capital Acquisition Cycle: 6 Planned Detection Risk: 6 Analytical Procedures: 6 Recommendation: 6 Conclusion 7 References: 7 Introduction: This project presents an audit risk assessment on Telstra Corporation Limited using advanced accounting techniques…show more content…
It has three components viz. inherent risk, control risk and detection risk. In today’s world, the role of IT has turned accounting estimated critical in financial reporting and disclosure. Houghton and Fogarty have said that non-accurate or incorrect estimates have often caused to misstatements in audit report (Gray & Manson, 2007). Audit Risk Model Audit Risk Assessment can be done by this Audit Risk Model. This model consists of 3 types of risks i.e., inherent risk, control risk and detection risk. Eventually, audit risk is a product of these 3 types of risks (Griffiths, 2012). Inherent risk: It is the susceptibility of an account balance or a class of transactions to a material misstatement, assuming that there were no internal controls. The inherent risk at Telstra is that there may be certain types of misstatements that may not be identified during the course of audit. The inherent risk associated with the audit of Telstra is ascertained based on the nature of the business. Telstra Corporation Limited have these kinds of risks:- inventory valuation risk, intangible assets valuation risk, foreign currency risk, interest rate risk, tax risk, amendment risk and compliance risk. All the above stated risks pose potential material misstatements on the financial statements and thus need to be addressed (Telstra

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