You are the audit manager for Cautious Counters. You are asked you to prepare a report covering the points below and how they are likely to affect the initial strategy adopted in the Audit Planning Memorandum.
- a) You have been specifically asked to consider materiality and the factors which should be taken into account in its consideration.
- b) What other audit concepts are relevant?
- c) Audit risk is made up of inherent risk, control risk and detection risk. Outline the key risks of Cook Club and how you propose to mitigate these through the audit.
- d) Discuss the procedures which should be included in the audit work plan to cover the identified areas of audit risk. What recommendations would you make?
– Trade payables
– Revenue recognition
Ensure you cover the specific concerns Jilly Jones (the Finance Director of Cook Club)