Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Gray is the partner at the Gray Auditing firm which have provided annual report audit for Cotton On for many years. Cotton On Ltd has
Gray is the partner at the Gray Auditing firm which have provided annual report audit for Cotton On for many years. Cotton On Ltd has retail stores around coastal regions around the country. Before COVID, Cotton On Ltd has benefited from the boom of tourism in Australia's coastal regions. Due to the lockdown and the border closure in 2020 and 2021, the business has suffered losses and many stores were forced to close down. As doubt about its ability to operate in the current year spreads, Cotton On's share price has fallen over the last two years. The CEO and other senior management have large bonuses linked to both share prices and company profitability. Cotton On has a monthly reporting system for internal management, but the audit team noticed that the reports are being replaced by a new system which has caused delays in generating reports. Required a. Identify the circumstances described above that could affect the audit risk assessment. b. How would Gray audit Cotton On's closing procedures? c. What potential errors would be of most interest? Explain
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started