GET ASSURED A++ GRADE IN EACH AUDIT REPORT - WORKPLACE AUDIT SIMULATION ASSIGNMENT ORDER - ORDER FOR ORIGINALLY WRITTEN SOLUTIONS!
Task - Write a comprehensive and detailed report to the audit committee of "Bookkeeping Makes Cents Pty. Ltd." indicating the audit observations.
Answer - Audit Report
Executive Summary
The present report is on the financial performance of the company Bookkeeping Makes Cents Pty Ltd. for the year ending on June ,2013 . In the current case the management is responsible for the preparation of the financial statements as per the Australian Accounting Standards and Corporation Act 2001 and is responsible for the internal controls of the company. The Auditor of the company is appointed to give its opinion on the financial statements prepared and report if there is any irregularity is observed in the financial statements of the company exercising its independence as per the Corporation Act 2001.
Contents:
Based on the audit evidence obtained during the course of audit the following irregularity were found by the auditors
a) GST registration taken for payment of taxes to be made on quarterly basis and on accrual basis, however based on documents and tax receipts, it appears that the same is paid on accrual basis.
b) The deprecation on assets has not been correctly accounted and in some it is charged at a higher rate than the prescribed rate and in some deprecation has not been charged.
c) The profit and loss account and the Balance sheet prepared is not correctly classified as per the requirement of the Australian Accounting Standards.
d) The classification of employees as per there qualification is not done and payment of salary is not done accordingly.
e) Opinion of auditors is required as to the continuity of the business as a going concern.
NO PLAGIARISM POLICY - ORDER NEW AUDIT REPORT - WORKPLACE AUDIT SIMULATION ASSIGNMENT & GET WELL WRITTEN SOLUTIONS DOCUMENTS WITH FREE TURNTIN REPORT!
Opinion of the Auditor:
1. In the given case we assume that the papers submitted to ATO by BMC is correct and has to pay taxes accordingly. As per the polices and procedure of BMC extract, there is mismatch for GST payment on cash basis which has lead to wrong payment of taxes by the company.
The payment of taxes on accrual basis should have been $ 912.20 and not $1020.50. This has lead to additional payment of cash by the company to the government.
2. For a company to register for Payroll tax in Victoria the following conditions need to be satisfied
a. The business should operate in Australia
b. Payment of wages to employees
c. Wages paid in Victoria
d. The wages payment should exceed $ 54,166 in any month of the year
In the current case the company has paid wages amounting to $57974.90 for April to June and the total payment as per Profit & Loss Account is $1,44,758.32. In both the cases the monthly payment does not exceed $ 54166; hence the company is not liable to register under the Victoria payroll tax. Therefore non -registration of BMC is consistent with the statutory requirement.
3. It is reasonable to assume that the Auditors Report and Directors declaration are correct as the Auditor who has signed the report on behalf of the firm is an independent auditor and has provided its opinion on basis of the financial information provided as per the financial statements prepared by the management. Hence the independent opinion of the Auditor is to be taken correct. The financial statements prepared are the responsibility of the management and forming opinion on the same is work of the auditor and finding out if any misstatement is there in the statements based on the information and data provided.
4. Auditing Standard ASA 700 Forming an Opinion and Reporting on a Financial Report and APES 110 Code of Ethics for Professional Accountants would be of specific concern as it deals with forming an opinion about the financial statements of the entity. The auditor is required to form an opinion based on the audit evidence found and based on the same would conclude that there is no material uncertainty and there does not exist any condition that would arise any doubt regarding continuity of business and all the ethical requirements of the auditor is carried on .
5. a) Loss for the year $ 1, 00,389. The company started its operation in February 2012, hence it is the second year of operations, in which the revenue is not more in comparison to the expense on staff compensation. It further in course of operations the revenue increase , the losses may turn into profits , hence loss is significant as it has led to erosion of the capital invested substantially.
b) Profitability = -100389/111468.95 (profit being negative, ratios are not computed).
c) Profitability = -100389/37902.00 (profit being negative, ratios are not computed).
d) Efficiency = 15623.30/379037902/2 = 0.41. The efficiency ratio being not so favorable for this kind of business.
e) Liquidity = 18718.95/2694.09 = 6.95 This indicates that the majority is held in form of cash , not funds used in business.
Motor Vehicles have depreciated @75% p.a and should have deprecated at @18.75% p.a
Cost of Vehicle = $ 45000, Deprecation = 8437.5 Net cost = $ 36562.5
The Deprecation as per Balance Sheet = $ 33750 Net result is inflated expense by $25312.5
Office equipment =6200 .Deprecation @20% Net value = 3720
Computer Equipment = 7800 deprecation @ 30% Net Value = 3822
The accumulated Depreciation = 8437.5+2480+3978 = 14895.5
This would result in showing the assets at the correct cost. The true picture of the assets of the company.
ENDLESS SUPPORT IN AUDIT REPORT - WORKPLACE AUDIT SIMULATION ASSIGNMENTS WRITING SERVICES - YOU GET REVISED OR MODIFIED WORK TILL YOU ARE SATISFIED WITH OUR AUDIT REPORT - WORKPLACE AUDIT SIMULATION ASSIGNMENT HELP SERVICES!
The Australian equivalent standard is AASB 101 Presentation of Financial Statements which is applicable for annual reporting of financial statements.
In the profit & Loss Statement the other revenue net of expense should be below line item Income to determine the total income.
In the Balance sheet the Assets needs to be classified as Current and Non Current Assets and Liabilities into current and noncurrent.
The Profit & Loss Account and Balance Sheet prepared in not as per the requirements of Australian Accounting standards and statements needs to be corrected accordingly.
7. Ms. Kimberley Lee should be qualified as level 4 Clerical officers as per the qualifications and duties performed by her.
Skill /duties of level 4 clerical officer
a) Perform duties of class 3 officer
b) Supervision up to four employees
c) Prepare detailed operational reports
d) Prepare business activity statements
e) Minimum qualification of Certificate IV in bookkeeping or accounting.
As all the above mentioned requirements are meet Ms. Kimberley should be classified as level 4 officers and paid remuneration @ $ 30.69 and not $ 25.31. This will result in additional burden to the company and violation of laws as short payment of taxes.
HELPING STUDENTS TO WRITE QUALITY AUDIT REPORT - WORKPLACE AUDIT SIMULATION ASSIGNMENT AT LOW COST!
The internal controls that have not been adhered to while payment and classification of staff is
a) Maintain record of the Bio data of the employees and the same should be segregated at various levels according to their qualification and job responsibilities, so that no chance error is there in classifying them.
b) Unique coding system should be introduced so that there is no chance of any mixing up.
c) While processing the payroll the code of the employee and compensation structure should be matched and then processed
The audit committee would recommend the company to classify the employee's bio data according to their qualifications and then code the bio data according to the code at various levels so that both of the codes are synchronized
Conclusion
From the above audit evidences obtained and the Financials of the company, the true and fair view of the company is not reflected due to the errors and omissions carried on by the company. If the errors are rectified, there would be effect on the loss incurred by the company. The additional payout for the wrong classification of employee would result in additional loss to the company. The depreciation being not correctly charged has not effect on the cash flows; however the non cash losses would increase. The ignorance on checking as what kind of GST registration would lead wrong payment of taxes to the government.
The auditor should report the findings in the Audit Report and the financial statements needs to be restated accordingly taking into account the errors committed and thereby the restated financial statement giving a true and fair view of the Company.
GET READYMADE AUDIT REPORT - WORKPLACE AUDIT SIMULATION ASSIGNMENT SOLUTIONS - 100% PLAGIARISM FREE WORK DOCUMENT AT NOMINAL CHARGES!