ACCT1059 Auditing

1.Sheridan AV is a new client to your firm. Discuss factors that will influence your:

Client acceptance decision (2 points)

Audit planning (2 points)

Preliminary risk assessment (2 points)

Preliminary materiality calculation (1 point)

(7 points)

2.Identify THREE inherent risks that are involved in Sheridan AV and its industry, name the account and audit assertions that would potentially be misstated, give a risk assessment of "high", "medium" or "low" in relation to the likelihood and materiality of the inherent risks occurring and propose the relevant substantive procedures. Answer in the following tabular format:

Inherent risk description (including Accounts and Assertions affected)

Inherent risk assessment (likelihood and materiality)

Proposed substantive procedures

1

2

3

(3 x 3 = 9 points)

3.Identify THREE control weaknesses in Sheridan AV, name the account and audit assertions that would potentially be misstated, give a risk assessment of "high", "medium" or "low" in relation to the likelihood and materiality of the control risks occurring and propose the appropriate internal controls to minimise control weaknesses. Answer in the following tabular format:

Control weaknesses (including Accounts and Assertions affected)

Control risk assessment (likelihood and materiality)

Proposed internal controls

1

2

3