Prepare an audit program which responds to risks identified.

Description / Main assumptions

• The audited hotel is a luxury hotel located in the centre of Nice.
• The hotel is also known for his prestigious restaurant, and organize seminars

Foreign clients represent approximately half of the occupation each year.

Objective:

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

1. 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

2. Identify significant accounts

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

4. 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, …).

 

Balance Sheet & Income Statement are presented here below: 3 Income Statement Balance Sheet (in ) Sales Reversal on provisions Other products Intangible assets Buildings (net) Property, plant & equipments (net) Other tangible assets (net) Other financial assets LT assets Raw materials Finished products Trade receivables Other receivables Cash Prepaid expenses Total Assets Equity Financial debt Trade payable Other payable Debt on fixed assets suppliers Total Liabilities 12/31/N 108 635 10 596 051 2 465 846 59 171 115 645 35 292 316 485 156 486 1 245 813 1 348 596 5 016 485 246 957 21 711 462 10 706 816 5.148 687 1 021 458 1974 856 2 859 645 21 711 462 12/31/N-1 104 597 11 465 978 3 295 476 59 645 134 589 35 292 318 478 186 478 1 348 596 1 548 964 7 284 647 348 594 26 131 334 14 715 425 4 896 485 3 185 496 1 847 964 1 485 964 26 131 334 Material Inventory variation (mat.) Other expenses Taxes Salaries & wages Social charges Amortization expenses Financial income Financial expenses Non recurring income Non recurring expenses Result before tax Income tax 12/31/N 16 485 963 500 485 132 856 -1 285 964 -10 582 -4 785 964 -25 964 -6 789 546 -2 648 596 -1 528 649 1 054 856 -985 874 -28 549 84 472 -25 947 58 525 12/31/N-1 21 524 859 504 685 269 485 -2 859 647 -46 123 -5 864 852 -22 964 -7.854 695 -2 854 965 -1 579 685 1 284 596 -831 528 15 247 1 684 413 -548 591 1 135 822