Auditing Audit Risk

Question: Discuss about the Auditingfor Audit Risk. Answer: Risk Factors Present in the Audit Engagement: An audit risk (AR) could be stated as unacceptable report, which an auditor develops for failing to detect the manipulation related to transactions or the frauds inherent in that account. The major risk factors involved in this particular audit engagement include inherent risk (IR), detection risk (DR) and control risk (CR) and it is computed as follows: AR = IR x CR x DR As pointed out by Carson, Redmayne and Liao (2014), the risks associated with the nature and types of the business or financial transactions are adjudged as inherent risks. In case of MGC Limited, the cash transactions have greater IR compared transactions settled through cheques. The CR is the risk, which takes place through manipulation of the financial transactions or conduction of an error in the books of accounts that the internal control systems of an organisations have failed to identify or correct the same. For MGC Limited, the appraisal related to internal control has been higher, as there is absence of job separations. The probability of obtaining the misstatements, manipulations and undetected frauds is regarded as detection risk (Kumar and Mohan 2016). The main reasons that these risks have aroused in MGC Limited are due to the sampling factors and human factors, while the control risks took place because of the inefficiency of the internal control systems. Analytical Review with Key Financial Ratios and Identification of the Key Areas Requiring Special Audit Attention: The aim of financial auditing is to evaluate the statement of financial transactions of an organisation along with providing an accurate overview of its business transactions (McGain et al. 2015). Therefore, the financial auditor has applied ethical and professional judgement at the time of carrying out the audit process of MGC. The approach of the auditor has been neutral for depicting an accurate overview of the financial transactions associated with the business. After evaluating the financial ratios of MGC, the same has been compared with the industrial average. The financial ratios of MGC Limited for the years 2014-2016 have been provided in the form of a table (Refer to Appendix). It has been found that the solvency position of the organisation has deteriorated in 2016 in contrast to the past two years. The current ratio of MGC has been 1.60 in 2016, while the industrial average has been 2.01 in the same year, although the ratio has improved compared to the previous two years ( Parker 2013). In addition, the industrial average of quick ratio has been 1.15 in 2016 and the same for MGC Limited has been 0.54 in 2016, which has improved in contrast to the previous year. The debt-to-equity ratio of MGC denotes that the firm has deployed greater debts in its capital structure, as highest debt amount has been realised in 2016 and the lowest debt amount has been realised in 2014. The times interest earned ratio denotes that the firm has the highest capability of repaying its debts in 2014 and lowest in 2015; however, the ratio has been below the industry average in 2015 and 2016. The average collection period for MGC Limited has increased in 2016 (39 days) compared to the past two years. This signifies the poor liquidity position, as the industrial average has been 32 days in 2016 (Scaife et al. 2016). From the average payment period, it has been found that the company has blocked its cash assets for the longest time in 2014 (104 days) compared to 2015 and 2016. The inventory turnover of MGC has been lowest in 2015 (187 days) and it has been highest in 2016 (233 days). The gross profit of MGC has been highest in 2014 and the lowest in 2015 and the same trend is observed in case of net margin as well; however, both the ratios have performed well below the industrial standards (Singh et al. 2014). The auditor has not found any misstatement in materiality and as a result, there is absence of audit risk. The organisation is needed to minimise the debt level in capital structure to settle off its debt obligations effectively. In addition, it is necessary to minimise the credit terms and increase the rate of inventory turnover. Finally, MGC needs to reduce its costs for enhancing revenue level in order to achieve higher gross and net incomes. Recommendation of the Overall Audit Strategy for the Engagement: The audit needs to focus on substantive procedures to address the issues of risk controls and material misstatement. Thus, the combined approach would be deemed fit for this engagement in relation to the below-mentioned values: According to the audit evidence, MGC Limited realises unnamed revenue. In this case, issuance of qualified opinion is required for rectifying the same. It is necessary to determine if there are cases related to early realisation of income. The allowances account and sales return need to be considered. It is crucial to assure the recording of discounts provided to the customers. In case, they are unrecorded, it might result in overstatement of sales account. References: Carson, E., Redmayne, N.B. and Liao, L., 2014. Audit Market Structure and Competition in Australia.Australian Accounting Review,24(4), pp.298-312. Kumar, E.P. and Mohan, B., 2016. Origin And Development of Auditing.PARIPEX-Indian Journal of Research,4(9). McGain, F., Jarosz, K.M., Nguyen, M.N.H.H., Bates, S. and OShea, C.J., 2015. Auditing operating room recycling: a management case report.AA Case Reports,5(3), pp.47-50. Parker, R.H., 2013.Accounting in Australia (RLE Accounting): Historical Essays(Vol. 58). Routledge. Scaife, W.A., McGregor-Lowndes, M., Barraket, J. and Burns, W., 2016. Giving Australia: Literature Review Summary Report. Singh, H., Woodliff, D., Sultana, N., and Newby, R., 2014. Additional evidence on the relationship between an internal audit function and external audit fees in Australia.International Journal of Auditing,18(1), pp.27-39.

The Seriousness of Dui and the Army Regulations That Govern It free essay sample

Driving while under the influence is a serious charge and there a several different army regulations that govern it. The primary regulation that governs it is article 112 of the uniformed code of military justice. DUI is a very serious offense, but when faced with a DUI while serving in the military, it means the consequences can and usually are much more severe. If someone who is a member of the armed forces finds him or herself facing a Military DUI charge, there are a number of differences regarding a military DUI compared to a civilian DUI charge. The first difference is that when a person is in the military, their case can be tried in a military court. The military has a different criterion for evaluating the state’s legal blood alcohol level. In a military court, if the blood alcohol limit is lower than the state’s legal limit, it doesn’t necessarily matter. If the military court feels that the blood alcohol level was high enough to impair the ability of the person driving a vehicle, they can still be charged with a military DUI. Intoxicated in the military is defined as the presence in the blood of any amount of alcohol, however small. It is very possible for a military person to be DUI or DWI even if a Breathalyzer or BAT, blood alcohol test, discloses that the blood alcohol concentration is considerably below the state’s legal level. Anyone in the military facing a DUI can expect that it will destroy their military career. The reason being is because a dishonorable discharge usually and often occurs when a military person is arrested for a DUI, and that means a career in the military will probably end. There are times when the relationship of the service person with their commanding officer can have an affect on the end result, but more often than not, an alcohol related arrest bears great consequences. If a person in the military faces a court-martial because of military DUI charges, their good name, along with their military career, benefits and freedom are at great risk. More than likely a positive alcohol test will lead to the end of a military career in addition to federal conviction and jail time. There are several repercussions for service members of all branches caught driving while intoxicated. Under Army Regulations, if a service members BAC is between 0. 05 and 0. 079, their driving privileges and military driver’s license can be suspended for 90 days. If their BAC is 0. 08 or more, the license will be revoked for a year. Two DUI convictions within five years will result in a five-year revocation of the license, and three alcohol-related traffic offenses will result in the permanent loss of their military driver’s license. To reinstate their drivers license after a DUI incident, service members must complete the ASAP training, take remedial drivers training, and possess a valid state drivers license before they can obtain a letter from their commander recommending reinstatement. In addition to a license suspension, service members who are caught driving with a BAC of 0. 05 or more may receive a General Officer Memorandum of Reprimand, which can be filed locally or in their permanent file. Those caught driving with a BAC of 0. or more are in violation of the Uniform Code of Military Justice and face either a court-martial or, more commonly, a non-judicial action (Article 15) from their commander. Under Article 15, the maximum punishment could include for E-4 and below: loss of all rank to E-1, loss of half of one months pay for two months, and up to 60 days of extra duties and restriction to the garrison. For service members rank, E-5 to E-6, loss of one rank, loss of half of one months pay for two mont hs, and up to 60 days of extra duties and restriction to the garrison. For service members rank, E-7 and above, they may lose rank if punishment is imposed by a general officer, loss of half a months pay for two months, and 45 days of extra duties and restriction to the garrison. For service members who are Officers, they have no loss of rank, restriction for 30 days, arrest in quarters for 60 days, loss of half of one months pay for two months. Driving with a BAC of over 0. 1, or any level of intoxication sufficient to impair the mental or physical faculties, could be tried at a court-martial. At a court-martial for drunken driving, the maximum punishment a service member could receive is, If a personal injury is caused; dishonorable discharge, forfeiture of all pay and allowances, and confinement for 18 months. If no injury is involved then; bad-conduct discharge, forfeiture of all pay and allowances and confinement for six months. In 2009, Army Regulation 600-85 was amended to require that Soldiers be initiated for separation if they receive two convictions of DUI during the course of their career or if they are involved in two incidences of alcohol-related misconduct per year. Intoxicated driving is a serious offense. It puts not only the safety of the driver at risk but the safety of those around him or her at risk as well. It can lead to bodily injury, destruction of property, or even death. It can reduce the effectiveness of the offending party’s unit to effectively complete the mission. It can create an undue emotional and financial stress on the service member’s family as well. The repercussions can be far felt and long lasting. The best way to avoid this entire unnecessary burden is to put down that drink and not pick up those keys.

Using Sample Essay Questions As A Base For Your Own Essays

Using Sample Essay Questions As A Base For Your Own EssaysIf you are just beginning to learn about how to write an essay, you may have noticed that the main way that most college students go about it is by using samples. The reason that so many people use these samples is because they feel that those of us who are trying to learn how to write an essay, should at least understand a few of the basic rules. However, that is not the only reason why people use samples. In fact, there are many reasons as to why you should also utilize samples as opposed to your own work.First of all, sample essay questions can be used by you and as a basis for your own work. Not all of the questions will be the same, but you will have an idea of what you are looking for. When you use this as a base for your own work, you will be able to decide if the specific words that you have chosen fit the tone of your essay. This will give you a better chance of getting it right the first time around. Therefore, you w ill be less likely to need to revise or rewrite the work after all.Some sample questions are made up by different people that they like to see in their samples. They may have chosen them from somewhere else, or they may have taken these questions from an article or some other source. Either way, when you utilize these questions as a base for your own work, you will be able to get a better idea of what you are looking for.Another reason that people use samples as opposed to their own essays is because these samples can be much easier to read. When you start writing for your own essays, there are a lot of things that you have to remember. You have to keep in mind everything from punctuation to grammar to your essay. Many times, this can become overwhelming. On top of that, many times, you will also have to know how to use a spell checker to catch mistakes and others things like that.Then, when you use sample essay questions, you will be able to let yourself relax and let the words flo w through you. Also, you will not be relying on the assistance of someone else to make sure that you have everything that you need. This is a better option because it is something that you are in charge of doing.The last reason that you should use sample essay questions is because of how long it is going to take you to use the instructions and find your own words. When you write it all out, you are going to start in the middle and work your way out. With these questions, you will just sit down and do the work on your own. That means that you will only have to worry about finding your own words rather than worrying about following the instructions.So, using sample essay questions as a base is great for both you and your own essays. You will be able to enjoy it more, and you will also be able to help yourself in the future.

What are you going to be free essay sample

I remember career day back in my old elementary school. The teacher told us to pick our future career and to come in dressed up. There were firefighters, astronauts, and doctors as far as the eye could see. My career choice back then was to be a veterinarian, like so many of many fellow classmates. Yet as I got older, the answer to the career choice got harder and harder. My future career changed throughout middle school and through high school. Even now when asked about my future, I have no reply. Right now I am at the point when I’m supposed to have a decisive goal and objective for the rest of my life. Although countless amounts of students have made this choice before me, it is not an easy one. It is difficult to imagine myself in the future because I cannot predict what the future will hold. We will write a custom essay sample on What are you going to be? or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page I am only 17 years old. I have not experienced the world yet. I have lived in my â€Å"safety bubble† for 17 years, my friends and family to guide me through tough choices and issues. But this choice is not something I can ask them to do. I know about the world its problems and difficulties, but that is not the same as experiencing it for myself. I do not know what I will be in the future but, I have an idea. I want to take this idea and mold it to my surroundings. I want to face the world head on with this idea and see where it will take me. Whether the outcome is failure or success, I don’t know. If failure is my result than I will adapt my idea for another attempt. I will mold and bend to the world but not break. This tactic is not perfect but it will help define myself and find my place in the world. So the next time someone asks â€Å"What are you going to be†, my answer is simple. â€Å"Let’s just wait and see.†

Iron Ore Price Bubble Essay Example

Iron Ore Price Bubble Essay Example Iron Ore Price Bubble Essay Iron Ore Price Bubble Essay Those who anticipated price bubbles made huge profits. But the key word is ANTECIPATE Therefore, the relevant question is What is the NEXT price bubble? If you dream of profiting from the next price bubble, you should take a closer look at iron ore, which is the mineral used to make steel After 3 years working in metals and mining for Goldman Sacks, I realized some characteristics that lead to price bubble in commodities I will give one example of metals that are already experiencing a price ubble and from there I will show that the iron ore industry has a VERY similar industry dynamics Here is the example: Do you remember the last two rows on the bottom of the periodic table. Those elements are named rare earth metals The rare metals industry 1. Is concentrated: 80% of Worlds supply of Rare earth metals used to come from a single mine in China 2. Has supply constraints: In last December, the Chinese government decided to stop exporting those metals. What happened? Practical results: Rare earth metals prices soared more than 1000% in a few months; farms that worth a few thousand dollars now worth SEVERAL million dollars because of the rare earth metal Similarly, the iron ore industry 1. Is concentrated: 3 big iron ore miners control 80% supply capacity 2. Has supply constraints: The big three control virtually all the expansion in supply Therefore, the suppliers in iron ore industry will make more profits if they reduce supply, in a very similar way to that witnessed in the rare earth metals Iron ore prices are poised to skyrocket. It is going to be a bubble. So buy early, buy now Bullets The Rare earth metals industry First: Is concentrated: 80% of Worlds supply of Rare earth metals used to come from a single mine in China Second: Has supply constraints: In last December, the Chinese government decided to stop exporting those metals. Similarly, the iron ore industry First: Is concentrated: 3 big iron ore miners control 80% supply capacity Second: Has supply constraints: The big three control virtually all the expansion in supply Iron ore price bubble By chofanephilly

Pay for Performance why it doesn't work in the Workplace Essay

Pay for Performance why it doesn't work in the Workplace - Essay Example To show the extensive use of the reward system, the author writes on using rewards to recognize teamwork, monetary rewards for employees for undertaking trainings and gaining new skills. The author states that rewards often impede than they enhance performance on many tasks with specific emphasis to those that require creativity with the example of Japan and Germany countries that do not use reward incentives and are successful in employee motivation. The other further explores the fact that there are no empirical studies linking motivation to rewards showing poor implementation of compensation systems. In fact, research by Jenkins in 1986 shows no relation between quality performance and rewards (p 124). In a case where incentives were withdrawn, production decreased then after sometime rose to reach a better level than when there were incentives further showing that incentives do not motivate workers for quality or higher productivity (p 124). The author then delves into the reasons for the failure of incentives including lack of necessity that is the introduction of incentives unnecessarily resulting in lack of any impact on performance. The second reason is secrecy where there is no transparency on each employees earning leading to overestimation and belief of differences in pay resulting in low morale and turmoil at the workplace. Other reasons are lack of match between performances and pay and expense in rewards solved via using noncash rewards. The other reason is too big versus too small incentives where small incentives do not have an impact while large ones are not received by all the workers resulting in failure of incentives to motivate performance. Short-term versus long-term incentives are the other reasons for incentives failure where employees may make decisions countering long-term interests when incentives base on short-term performance. Objectivity versus subjectivity,

Back Belts Article Example | Topics and Well Written Essays - 500 words - 1

Back Belts - Article Example In spite of knowing that radiation has definite and pronounced, long-term, serious after effects, why after all it’s use is approved to continue, even in the most advanced countries? Obviously, because it is a life saving technique. Similarly to use or not to use DDT is not a matter of option for the underdeveloped countries; it is rather a matter of survival for them. Since there is no replacer available at this point in time, we can not afford to wait (Ban DDT) till tomorrow. When someone is drowning, it is no time to tell him or her, how to swim. Background DDT, â€Å"dichlorodiphenyltrichloroethane, a white crystalline powder along with many other synonyms (Safety Data)†, had been effectively used in preventive control of Malaria, a disease spread by the vector mosquito. It saved thousands of lives but contrarily it polluted the environment right from the depth of lakes to the peaks of mountains through fish and birds of prey, having residues of DDT. Toxicological s tudies have found it hazardous to the health of humans and to that of fauna and flora too. In consideration of serious potentials like being carcinogenic-Cancer producing, Its Use had been banned in USA and many other countries. However, it has renewed the spread of disease and malaria is at large, once again.