CLIENT RISK PROFILE
December 21, 2014 financial statements are being prepared in the form of annual report in accordance with IFRS with the previous year corrections and restatements. In 1967, Suncor was established for the first time as development of Canada’s oil sands. Suncor energy inc. is an energy provider company, where it is headquartered in Calgary, Canada. Suncor Inc. operates in the energy sector where its primary operations include crude oil extraction, its conversion to oil, gas and, diesel; further trading the manufactured product in the open market. Across our operations, we intend to achieve production of one million barrels of oil equivalent per day. Across our operations, we intend to achieve production of one million
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The client had seen a record oil sand production through important milestones and operational performance. Building strong midstream capabilities had provided Suncor with triple their production to compete the market. During 2002, with the major competitors Suncor was not doing well, however once they bought petro Canada over, then they came to the second place in the energy industry. Suncor has made an improvement through the use of technology to lower the long run costs through innovation for sustainable energy development. Suncor has started decline with the market, for pipeline constraints, new entry of energy companies, and by higher costs to produce oil. In order to find the risks of this company, client risks must be identified, testing according to the plan must be done to improve the profit and revenue.
As I was reviewing the financial statements of 2013, I have found that, the company has more volatile industry which makes the investors to buy and sell. Through their improvement globally, their oil sands had become effective and efficiency through the public. Business risk of this client will be very high since the energy sector is more volatile, especially the oil sands of energy sector. Since Suncor has the lowest prices and operating costs, they will face huge competition within Canada and internationally. Such risks will affect the auditor’s assessment of audit risk for this client. Therefore, the auditor can
Financial statements could be examined with varied degrees, as part of the client acceptance procedures Paige CPA got to perform a horizontal and vertical analysis, and financial ratio analysis of Vinand Petroleum financial statements. These procedures are not as in depth as other procedures used by auditors on financial statements, but these procedures may show areas of concern for auditors. From 2006 to 2007, Vinand’s long term debt tripled and its interest expense paid for the year did not reflect this drastic increase. This could mean that Vinand has taken on a large amount of debt with a low interest rate, which will not bode well for the financial health of the company in the future. In the same breadth,
This project presents an audit risk assessment on Telstra Corporation Limited using advanced accounting techniques
Knowledge about risks related to the company evaluated as part of the auditor 's client acceptance and retention evaluation; and the relative complexity of the company 's operations. ( Auditing Standard No. 9 //. (n.d.).
1. For what purposes does Mortensen estimate Midland's cost of capital? What would be the potential consequences of a too high estimate compared to the firm's “true” cost of capital? What about a too low estimate?
Canada ranks among the leading energy producers in the world, through oil production. These oil deposits rank oil sands of Canada as the largest oil deposits in the world after the Saudi Arabia and Venezuela. The only challenge with the oil sand deposits is that oil deposits are seen as unconventional. In effect, tar sands are recognized as one of the dirtiest energy sources in the world (Bailey & Droitsch, 2015). This fact is founded on the production factor; in producing one barrel of tar sands oil, the hazardous emissions are three to five times that of producing the equivalent of conventional oil. The Alberta oil sands are viewed as the single largest economic project in human history. The Canadian government and oil
An assessment of the company’s financial statements will highlight the firm’s management of its risk and opportunities.
Audit risk is the risk that the auditor gives the wrong opinion – this can either be stating errors when there are none or when there are errors stating that there are none. This risk cannot be eliminated as auditors can only provide a reasonable assurance and not absolute, but instead this can only be managed and reduced to a minimum.
CAS 300 requires auditors to their audit using a risk based model where the nature, timing and extent of audit procedures are based on the assessed risk of material misstatement. Pickett (2006) argues that for audits to be effective and efficient, much of the audit effort should be focused on areas that are considered to pose the highest audit risk. Additional audit procedures should be linked to individual audit assertions whereas other audit procedures need to be performed as and when needed. Thus, for an audit plan to be put in place, it is necessary for an auditor to come up with a risk profile of the client comprising an understanding of the business operating by the audit client, assess business risk and also perform its preliminary analytical review.
This 1.4 trillion-dollar industry has been able to benefit Albertans. To elaborate, Alberta’s upstream energy sector, which mainly includes the oil sands, conventional oil as well as gas and mining has provided 133,053 jobs for Alberta residents, according to Statistics Canada. As well, having the third largest oil reserves in the world, Canada is able to use the oil reserves as a trading asset, as it is currently providing 1.4 million barrels of oil to the USA everyday, which is equivalent to $49.7 million at current stock prices. As well, $52 billion dollars in royalty were accounted for during 2013-14. In this way, the oil sands industry provides jobs, billions of dollars in royalties and boosts national income and prosperity through the trading of this resource. This affects my stakeholder since this would give Ed Stlemech a healthy financial resume/profile to an otherwise terrible environmental and societal resume while he was Alberta’s
This business has strong position in some segments; the demand for oil and gas would be increased by next years, annual prices for oil and gas will also increase. The consultant felt that demand and supply picture is increasing and would be favorable for those firms that had developed the business earlier. However, according to the consultant, it would not be favorable to invest more in exploration and production, so Mensa should expand this business through intensification strategy. As the production would peak from 2002 to 2010, they advised that their existing reserves and the land they own would only increase in value over time, even though Mensa could never grow to be competitive within this industry due to the size of their existing competitors. The Florida pipeline in this sector is a significant tool for improvement in profits, as the cash flow for this business was estimated to increase $100million to $300million in year 5. For exploration and production division, if divestment strategy is followed then the division could be sold for $1,560,000,000 at present and it will be increased up to $2,000,000,000 within 5 to 6 years. The profits would be increased by 8-10%, with a focus on building supplies of both oil and gas.
In Part I of the case, you performed preliminary analytical procedures for Pinnacle (pp. 245–247). The purpose of Part II is to identify factors influencing risks and the relationship of risks to audit evidence.
Suncor Energy Inc. is a company that was founded in 1967; it is Canada 's premier integrated energy company, and the fifth largest North American energy company. Suncor provides thousands of well-paid jobs, puts millions of dollars in Canadian businesses every year, takes action on environment issues and supports our communities by funding local initiatives. (Suncor Website, 2012) Suncor is leading the way in oil sands operations and development while investing in technologies to improve environmental performance. A considerable part of Suncor’s portfolio is invested renewable energy
The case study of NewGrade Energy is based on data analysis from 2009. A privately owned company located in Regina, Saskatchewan that operates heavy oil upgrader, The Company’s ownership structure consists of the Government of Saskatchewan and Federated Co-Operatives Limited each owning 100% of the company and Crown Investment Corporation (CIC) and Consumer’s Co-Operative Refineries Limited (CCRL) both owning 50% (Ivey, 2009). At the time of its $ 770 million dollar, inception in 1988 CIC and its third-party lenders financed $150 million to the project and the government of Saskatchewan and Canada guaranteed the capital venture (Ivey, 2009). The
Exxon and Chevron are no doubt some of the leading incorporated oil companies on the globe. Exxon Corp. is the second largest oil firm after Royal Dutch Shell, it is respected for getting the biggest revenue return in 2008 which no company in the U.S. have ever reported before. According to Wilson (2009) Chevron has managed to show a lot of profitability in the market despite the decease in its oil production. It graded as one of firms which made a billion dollars profit within a week in the period of July to September 2008. Regardless of profitability trends set by the two oil firms in the U.S. market, they have been facing financial decline like the rest of the companies in other industries. The two firms are like two sailing ships which are taking longer time to sink. In the last few years, the production capacity of Chevron and Exxon has decreased and their listings on the stock market have become weak. The continuation of construction and drilling which requires billions of dollars in expense of oil production might make them experience a bigger financial crisis (Wilson, 2009).
BP (British Petroleum) is one of the leading companies that are delivering energy products and services to the people around the world. In this report, we studied BP’s risk management plan for preventing oil spill. The main reason for choosing BP and its oil spill preparedness plan is that the oil companies have become increasingly vulnerable to unwillingly cause disasters and BP is one of them. An event that highlighted this vulnerability and subsequently drew attention to the need to investigate, is the BP oil spill in 2010 was one of the worst oil disasters that affected environment adversely. Issues such as these have been a serious concern for the oil companies around the world.