Case Analysis : M Ltd Essay

1591 Words7 Pages
Contents
Executive Summary 2
Risk Evaluation 2
(a) Inherent Risk 2
(b) Control Risk 2
(c) Detection Risk 3
Audit Plan 3
i. Understanding the Entity 3 ii. Opening Balance Verification 3 iii. Test of Controls 4 iv. Balance Audit Program 4
v. Determination of Audit Procedures 4
(a) Audit Procedures for Foreign Exchange Rate Risk 4
(b) Audit Procedures for Valuation of Stock 4
Conclusion 5
References 6

Introduction
The report presents an analysis about M Ltd, a company which is specialized in the production and selling of wine. The company has recently been listed on the stock exchange which increases the responsibility of management to prepare unbiased and transparent financial statements that satisfies the needs of shareholders. The initial part of the report focuses on risk assessment strategies and bifurcates it into inherent, control and detection risk. Further, this part of the report also discusses that the allocation of resources will depends on the importance and complexity of business transactions.
The second part of the analysis provides a detailed knowledge about the audit plan and what strategies could be adopted by auditor to gather sufficient appropriate audit evidence. This segment also describes various audit procedures about the valuation and measurement of foreign currency and inventory valuation. At the end, the report provides a conclusion about the overall analysis.
Risk Evaluation
In accordance with ASA 315 Identifying and Assessing the Risk of
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