Key Audit Risk Areas And Audit Procedures of Bega Cheese Limited

Question: Discuss key audit risk areas of Bega Cheese Limited. Answer: Key audit risk areas and audit procedures The main key audit risk areas of Bega Cheese Limited are to focus mainly on the financial position as well as performance in consolidated group of enterprise (Whittington 2011). It identifies intention risk, detection risk as well as control risk for the same. It aims at recruiting Audit and Risk Committee in business entities in support of Board of Directors in an overall manner. Some of the key responsibilities include reviewing of the effectiveness of Bega Cheese internal control. It relates risk management systems including oversight in Governance as well as Assurance function for the same. It involves key responsibilities of Committee in setting out Charter of the Board in reviewing on annual basis (Scott and Jacka 2011). Audit Risk Area: Inventories Misstatement mainly affects Bega Cheese Limited inventory balances as per the reported profits in the near future. It involves in inventory identification that poses difficult for the auditor for viewing at the stock. Inventories poses difficulty in establishing quantities of inventory held (Pflugarth 2011). It ceases ways for inventory movements in form of inventory count as well as cutting off establishing precision in any form. Outline of Issue Bega Cheese Limited mainly faces issues with valuation of inventory in the near future. It faces inventory loses as well as inventories poses intangibility that needs consideration as far as possible. It is difficult in maintaining certain products in progress balances in the near future (Louwers 2011). Key assertion and audit procedure Bega Cheese Limited should follow procedures like planning, during counting as well as analytical reviews for the same. Audit Risk Area: Bega Cheese Limited faces issue with risk and internal control systems Outline of Issue Bega Cheese Limited operates in risk management outlining process for assessing effectiveness including managing compliance for the same (Hooks 2011). Key assertion and audit procedure Bega Cheese Limited needs to involve in delegating responsibilities including adequacy of internal control, process as well as procedures in an overall manner. Audit Risk Area: Bega Cheese Limited faces problem in annual insurance process. Outline of Issue Bega Cheese Limited faces issues relating gaining adequate internal as well as external information in strengthening of internal controls in the most appropriate way (Hall and Hall 2011). Key assertion and audit procedure Bega Cheese Limited reviews ways for adequate resources in providing management in completing delegated responsibilities in an effective way. Audit Risk Area: Bega Cheese Limited faces difficulty in selecting sales invoices at the end of the year in sequences terms. It fails to match sales invoices in correspondence with dispatch notes in an overall manner. Outline of Issue Bega Cheese Limited faces difficulty in maintaining sales accounts in detecting cases of understatement. It displays in the sales account in the debtor ledger for updating stock records in the near future. Key assertion and audit procedure Bega Cheese Limited should follow procedures like planning for corresponding sales invoices for recording sales in desired form. Audit Risk Area: Bega Cheese Limited faces difficulty in inadequate and inappropriate inventory held in form of demands of sakes as well as production. It results in high inventory levels giving rise to poor cash flows as well as financial loss. Outline of Issue Bega Cheese Limited faces issue with lack of security like resulting in loses theft as well as misappropriation. It faces issue relating obsolete inventory that is supplied to customers resulting in financial loses as well as damage in reputation. Key assertion and audit procedure Bega Cheese Limited should follow problem identification as well as reliance for the same. It requires expert assistance and counting instructions in the near future. Reference List Hall, J. and Hall, J. (2011).Information technology auditing and assurance. Mason, Ohio: Thomson/South-Western. Hooks, K. (2011).Auditing and assurance services. Hoboken, NJ: Wiley. Louwers, T. (2011).Auditing assurance services. New York: McGraw-Hill Irwin. Pflugarth, G. (2011).Auditing, assurance and ethics handbook 2011. [Frenchs Forest, N. S. W.]: Pearson Australia. Scott, P. and Jacka, J. (2011).Auditing social media. Hoboken, N.J.: Wiley. Whittington, O. (2011).Principles of auditing other assurance services. [Place of publication not identified]: Irwin Mcgraw-Hill.