Objective Prepare an audit program which responds to risks identified Description Main assumptions The audited hotel is a luxury hotel located in the center of Nice The hotel is also known for his prestigious restaurant, and organize seminars Foreign clients represent approximately half of the occupation each year Balance Sheet Income Statement are presented here below Balance Sheet (in ) 12 31 N 12 31 N 1 Income Statement 12 31 N 12 31 N 1 Intangible assets 108 635 104 597 Sales 16 485 963 21 524 859 Buildings (net) 10 596 051 11 465 978 Reversal on provisions 500 485 504 685 Property, plant equipments (net) 2 465 846 3 295 476 Other products 132 856 269 485 Other tangible assets (net) 59 171 59 645 Other financial assets 115 645 134 589 LT assets 35 292 35 292 Material 1 285 964 2 859 647 Inventory variation (mat ) 10 582 46 123 Raw materials 316 485 318 478 Other expenses 4 785 964 5 864 852 Finished products 156 486 186 478 Taxes 25 964 22 964 Trade receivables 1 245 813 1 348 596 Salaries wages 6 789 546 7 854 695 Other receivables 1 348 596 1 548 964 Social charges 2 648 596 2 854 965 Cash 5 016 485 7 284 647 Amortization expenses 1 528 649 1 579 685 Prepaid expenses 246 957 348 594 Total Assets 21 711 462 26 131 334 Financial income 1 054 856 1 284 596 Financial expenses 985 874 831 528 Equity 10 706 816 14 715 425 Non recurring income 15 247 Financial debt 5 148 687 4 896 485 Non recurring expenses 28 549 Trade payable 1 021 458 3 185 496 Other payable 1 974 856 1 847 964 Result before tax 84 472 1 684 413 Debt on fixed assets suppliers 2 859 645 1 485 964 Income tax 25 947 548 591 Total Liabilities 21 711 462 26 131 334 58 525 1 135 822 Objective You must prepare a presentation explaining the audit strategy audit program of a hotel for year end, by answering the following questions Identify risks of the activity, and in particular inherent risks related to the following classes of transactions Sales and Trade receivables Purchases and trade payables Human resources process Identify significant accounts Which internal controls could answer audit assertions related to the accounts of your class of transactions During the period, you have been aware that a fraud organized by several employees has been identified Therefore, management has changed during the year, and you cannot rely on internal control Describe your audit plan at year end (tests to perform in relation with audit assertions) for the following classes of transactions Sales and Trade receivables Purchases and trade payables Human resources process (Distinguish between tests of transactions and tests of balances) Describe in detail each step of your audit program (i e provide definition of analyzed ratio, explain how you choose items to be tested, )

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Posted on Jul 14, 2024

Objective:

Prepare an audit program which responds to risks identified.

Description / Main assumptions

Balance Sheet & Income Statement are presented here below:

Balance Sheet (in )	12/31/N	12/31/N-1	Income Statement	12/31/N	12/31/N-1
Intangible assets	108 635	104 597	Sales	16 485 963	21 524 859
Buildings (net)	10 596 051	11 465 978	Reversal on provisions	500 485	504 685
Property, plant & equipments (net)	2 465 846	3 295 476	Other products	132 856	269 485
Other tangible assets (net)	59 171	59 645
Other financial assets	115 645	134 589
LT assets	35 292	35 292	Material	-1 285 964	-2 859 647
			Inventory variation (mat.)	-10 582	-46 123
Raw materials	316 485	318 478	Other expenses	-4 785 964	-5 864 852
Finished products	156 486	186 478	Taxes	-25 964	-22 964
Trade receivables	1 245 813	1 348 596	Salaries & wages	-6 789 546	-7 854 695
Other receivables	1 348 596	1 548 964	Social charges	-2 648 596	-2 854 965
Cash	5 016 485	7 284 647	Amortization expenses	-1 528 649	-1 579 685
Prepaid expenses	246 957	348 594
Total Assets	21 711 462	26 131 334	Financial income	1 054 856	1 284 596
			Financial expenses	-985 874	-831 528
Equity	10 706 816	14 715 425	Non recurring income		15 247
Financial debt	5 148 687	4 896 485	Non recurring expenses	-28 549
Trade payable	1 021 458	3 185 496
Other payable	1 974 856	1 847 964	Result before tax	84 472	1 684 413
Debt on fixed assets suppliers	2 859 645	1 485 964
			Income tax	-25 947	-548 591
Total Liabilities	21 711 462	26 131 334		58 525	1 135 822

Objective:

You must prepare a presentation explaining the audit strategy / audit program of a hotel for year-end, by answering the following questions.

Identify risks of the activity, and in particular inherent risks related to the following classes of transactions:
1. Sales and Trade receivables
2. Purchases and trade payables
3. Human resources process

Which internal controls could answer audit assertions related to the accounts of your class of transactions?

During the period, you have been aware that a fraud organized by several employees has been identified. Therefore, management has changed during the year, and you cannot rely on internal control. Describe your audit plan at year-end (tests to perform in relation with audit assertions) for the following classes of transactions:
1. Sales and Trade receivables
2. Purchases and trade payables
3. Human resources process

(Distinguish between tests of transactions and tests of balances)

Describe in detail each step of your audit program (i.e. provide definition of analyzed ratio, explain how you choose items to be tested, ).