Question 1 Planning, analytical and risk assessment (20 marks)
You have recently been promoted to an audit team leader role and assigned the 2019 audit of a listed entity.
Chose one (1) entity that is listed on the Australian Stock Exchange (ASX) and, in relation to the selected entity, provide a report that:
1. provides an analysis of the most recent financial statements, including:
i. a simple comparison of the last two years of financial information (including all workings).(2 marks)
ii. a common size statement of the Income Statement and the Balance sheet (including all workings).(2 marks)
iii. ratio analysis of the listed entity's profitability, liquidity, solvency, and efficiency. (2 marks)
2. provides background information; including market cap, total assets, total staff, number of countries the company operates in.(3 marks)
3. uses information from part (a) and (b) to identify three account areas (except for cash and the equity accounts) which might be at risk of material misstatement.(3 marks)
4. identifies and justifies two key assertions for each account area identified in (c).(6 marks)
5. assesses the going concern position of the listed entity.(2 marks)
The report is to include a cover page, an executive summary, a contents page, an introduction, responses to the above requirements with appropriate headers/sub-headers, and a conclusion.
The entity's financial statements (excluding notes) must be included as an annexure within the report.