TACC608 - Auditing and Assurance Assignment Sample

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Introduction : TACC608 - Auditing and Assurance

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Review plans are made when all the potential "auditable regions" of a review universe are evaluated first because of the gamble factors. Risk factors regarding "review" assist in characterizing the auditable regions with teaching higher gambling or are expected to be focused on in contrast with different regions in the review universe. Through risk factor examination, an inspector can decisively lessen consideration and responsibility to explicit, yet generally, more dangerous/focused on review objects instead of upgrading work to the whole review universe. The ongoing task appraises and assesses various gamble factors, which are examined explicitly for the "review commitment arranging" cycle of ASX Recorded Westpac Banking Enterprise.

Risk factors attached to “audit engagement planning” process for Westpac

The doubt of misstep, misrepresentation, or risk is generally somewhat higher in firms with poor, as opposed to power, control settings in a sort of big way. Subsequently, the effect of this change generally definitely variable is in every way that matters, for all intents and purposes, more prominent for Westpac amazingly, which, for the most part, is quite significant, which kind of is fairly significant (Loussikian, 2019), which is fairly significant. While arranging the review, all review objects in the "review universe" whose monetary worth in contrast with the absolute monetary sort of pretty worth of the client is material is focused on, which is quite a significant chance kind of variable sticks to ASA 320, "Materiality in review arranging and execution" (Ullah, 2014). Therefore, when Westpac plans review plans, account offsets with a material equilibrium, particularly, for the most part, are viewed as hazard-inclined and given particularly high need, which for the most part, is quite significant (Ullah, 2014), which kind of is quite significant. The risk of misstep, misrepresentation, or risk is generally somewhat higher in firms with poor, as opposed to power, control settings in a sort of big way. Subsequently, the effect of this change generally definitely variable is in every way that matters, for all intents and purposes, more prominent for Westpac amazingly, which, for the most part, is quite significant, which kind of is fairly significant. While arranging the review, all review objects in the "review universe" whose monetary worth in contrast with the absolute monetary sort of pretty worth of the client is material is focused on. The management of prospective audit findings is the focus of all audit risk modules. This module provides a structured approach to setting up and executing an audit risk evaluation process, including the identification and management of potential audit findings and information.

Westpac is an Australian arm of Commonwealth Bank. Despite having a very consolidated position, Westpac does not have a strong presence in Asia, with most of its operations in the country being focused on the Australian region, except for a small business in Singapore.The audit risk models usually include financial, operational, and strategic risks. While reviewing the auditing procedures, we should also review the process itself to see if any risks can be mitigated by improving or streamlining it. In addition, it is important to assess how confident we are in our assumptions about our systems and processes.

This chance element alludes to the level of hazard that an association sort, essentially for all intents and purposes, has prior to take control exercises to mostly generally alleviate it, or so they generally thought, or so they thought. The inborn gamble related to liquidity is dependably huge for banking associations, for example, Westpac, which is genuinely critical in a generally big way. Nonetheless, on the off chance that an association generally has an appropriately planned framework for surveying, distinguishing, and in any event, forestalling extortion, the gamble is essentially diminished (Pempal.org., 2014), which is fairly significant, or so they thought. As a financial business, Westpac definitely has an enormous number of clients and keeps numerous client accounts, or so they assume. The evaluator visits the client himself, studies the systems and environment, and surveys methodologies, people, and construction, they cannot give a pretty suitable appraisal of the above-analyzed risk factors (Clarke, 2017), or so they thought subtly.

Control environment

Most likely, the suspicion of mistake, fraud, or danger is more serious in firms with poor, rather than robust, control settings. A healthy environment combines explicit duties and roles, objectives, specific ethical policies, fairly good resource management, and strong governance in a very big way. However, for Westpac, it has been determined that the systems comprising the control environment are mostly only "partially effective." EY, in particular, reported the same risk-management framework at the entity in August 2017 in a particularly big way. There is no generally new review accessible after that. As a result, the impact of this risk factor, for the most part, is, for all intents and purposes, greater for Westpac in a big way (Loussikian, 2019). Westpac has been vulnerable to audit risk for a number of years. The most recent stress test, carried out in August 2017, resulted in a poor rating for its control environment. The concern with this risk is significant. There is no generally new review accessible after that. As a result, the impact of this risk factor, for the most part, is greater for Westpac in a big way. It is evident from the Westpac Board's vulnerability assessment that the entity's control environment is not well-focused on risk, accountability and continual improvement. In fact, Westpac's board has conveyed subpar practices for some time now. The most recent example of this is its July 2018 decision to dump more than $ 6 million in a failed Australian solar energy program rather than cancel it altogether. Subsequently, Westpac may have been exposed to various lawsuits as a result of that decision. Control underperformance was an independent factor indicative of Westpac fraud risk. Westpac is at risk due to poor control environments that do not function properly or at all. The firm was responsible for fraud around 1.4 billion euros in 2017 and has been cited for a lack of oversight at its New Zealand banking unit. A large mix of foreign exchange transactions prior to December 2016 may also have played a role, Westpac provides financial services to a large and diverse customer base across Australia and New Zealand. In 2017, Westpac accounted for 15% of the total banking industry's credit card lending and was the number one issuer of MasterCard-branded cards with A$122 billion in outstanding balances.

Financial materiality

While planning the audit, all audit objects in the "audit universe" whose financial worth in comparison to the total financial worth of the client is material are prioritized. In contrast, audit items, those whose financial value accounts for a small part of total worth are given the least consideration. This risk factor adheres to ASA 320, "Materiality in audit planning and execution" (Ullah, 2014).
As a result, when Westpac designs audit plans, account balances with a material balance are considered risk-prone and given high priority. Materiality is measured in terms of money rather than the volume of transactions (Ullah, 2014).

Fraud potential

Audit areas where the auditor's assessment of fraud potential is high become riskier and a priority area for the audit function. However, the risk is significantly reduced if an organization has a properly designed system for assessing, detecting, and even preventing fraud (Pempal.org., 2014).

The uncertainty of slip-up, deception, or chance, by and large for the most part, is to some degree reasonably by and large higher in firms with poor, rather than strong, control settings in a kind of enormous way. Consequently, the impact of this opportunity by and large certainly factor for the most part fundamentally truly is all around that truly matters, in every practical sense, more conspicuous for Westpac incredibly, which in every way that matters, generally is very critical, which sort of is genuinely huge (Loussikian, 2019) which in a real sense is genuinely huge. While organizing the survey, all audit objects in the "survey universe" whose money-related worth conversely, with the exceptionally outright financial kind of lovely worth of the client fundamentally really is material are centered around, which explicitly is huge. This opportunity sort of factor sticks to ASA 320, "Materiality in audit orchestrating and execution" (Ullah, 2014). For this, when Westpac plans survey plans, the account essentially balances with a material harmony, especially generally seen as danger slanted and given especially serious need, which generally is huge (Ullah, 2014), which sort of is huge.

This opportunity component suggests the degree of peril that an affiliation, in every practical sense, has before taking control of activities to, for the most part, by and large, lighten it, or so they by and large thought, or so they thought. The characteristic bet related to liquidity, for the most part, in a real sense, essentially is reliably tremendous for banking affiliations positively instance, Westpac, which fundamentally, in a real sense, is truly basic in a by and large huge manner. Regardless, in case an affiliation, for the most part, has a fittingly arranged structure for looking over, recognizing, and regardless, hindering blackmail, the bet in a real sense is basically lessened (Pempal.org., 2014), which certainly truly is genuinely critical, or so they in a real sense thought. Westpac, as a monetary business, certainly attracts a huge number of clients and explicitly keeps endless client accounts, or so they thought. Be that as it may, expecting the evaluator visits the client himself, concentrate on the frameworks and climate, review systems, individuals, and development, they cannot essentially, in a real sense, give a pretty reasonable examination of the above-broke down risk factors (Clarke, 2017), or so they certainly thought in an unpretentious manner.

Westpac, as a banking business, engages with a large number of clients and maintains a large number of customer accounts. Banking staff is constantly exposed to money and hence has a high potential for deception. Westpac, on the other hand, takes this issue seriously, implementing a "real-time fraud detection system" with collaboration placed along ACI worldwide. However, the auditor's work does not finish there. He must still assess whether this system is effective for him (Corner, 2017)

Recommendations

The assessment of hazard factors is a higher priority than simply distinguishing proof. Reviewers can more readily assess them by thinking about specific suggestions. Entering the client's premises with an unmistakable brain without zeroing in on any earlier comprehension acquired, whether by previous reviews or through different examiners. These aids in zeroing in on more up to date created data in the client's auditable regions and forestalls chances of missing anything significant (CFI Schooling Inc., 2019).Assessment ought to stringently be attempted "on-premises" rather than through monetary books, media. Discharges or different mediums except if the evaluator visits the client himself, surveys the frameworks and climate, and assesses strategies, individuals, and structure, they cannot grant an appropriate assessment of the above-examined risk factors (Clarke, 2017).After an appraisal is attempted by the evaluator himself, at that time, the reports created from earlier review capabilities or earlier evaluators ought to be perused. It will upgrade his comprehension inspector might interpret the client and the significant gamble regions that existed before. Further, it will likewise take the evaluator to those auditable regions which are not distinguished in the ongoing appraisal.

Conclusion

Review risk factors help in reducing the weight on evaluators to stretch out their arrangements to every generally single auditable region, yet specifically essentially permits them to productively generally kind of fairly direct their capability, which particularly for all intents and purposes essentially is quite significant, which kind of is quite significant. Reviewers should genuinely survey their review objects according to gamble with elements and generally make review arrangements decisively and tangibly in a major way, or so they specifically thought. Through ID of hazard factors, it becomes, definitely fairly simpler for the reviewers too, for the most part, for all intents and purposes, basically follow a gamble-based approach and subsequently basically kind of give a proper assessment in light of honest evaluations, as opposed to decisions, which most definitely is fairly significant in a big way.

This chance element alludes to the level of hazard that an association sort, essentially for all intents and purposes, has before taking control exercises to alleviate it mostly, or so they generally thought, or so they thought. The inborn gamble related to liquidity is generally dependably huge for banking associations, for example, Westpac, which is genuinely critical in a generally big way. Nonetheless, on the off chance that an association generally has an appropriately planned framework for surveying, distinguishing, and in any event, forestalling extortion, the gamble is essentially diminished (Pempal.org., 2014) which is fairly significant, or so they thought. As a financial business, Westpac draws in an enormous number of clients and specifically keeps countless client accounts, or so they thought. However, assuming the evaluator visits the client himself, studies the systems and environment, survey methodologies, people, and construction, they cannot give a pretty suitable appraisal of the above-analyzed risk factors (Clarke, 2017), or so they thought subtly.

References

Auditing and Assurance Standards Board, 2015. Auditing Standard ASA 315 Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment. Auasb.gov.au. Available at: https://www.auasb.gov.au/admin/file/content102/c3/ASA_315_Compiled_2015.pdf [Accessed February 17, 2020].

CFI Education Inc., 2019. Audit Planning - Learn More About the Different Auditing Phases. Corporate Finance Institute. Available at: https://corporatefinanceinstitute.com/resources/knowledge/accounting/audit-planning/ [Accessed February 17, 2020].

Clarke, I., 2017. Effective Internal Control Environment & Risk Assessment. Langford & Company LLP. Available at: https://linfordco.com/blog/internal-control-environment/ [Accessed February 17, 2020].

Corner, S., 2017. Westpac NZ deploys ACI Worldwide payment and fraud detection. Computerworld. Available at: https://www.computerworld.com/article/3478632/westpac-nz-deploys-aci-worldwide-payment- and-fraud-detection.html [Accessed February 17, 2020].

Loussikian, K., 2019. Westpac external audits flag partially effective systems. The Sydney Morning Herald. Available at: https://www.smh.com.au/business/companies/westpac-external- audits-flag-partially-effective-systems-20191208-p53hx9.html [Accessed February 17, 2020].

Pempal.org., 2014. [Online] Available at: https://www.pempal.org/sites/pempal/files/event/attachments/cross_day-2_4_pempal-iacop- risk- assessment-in-audit-planning_eng.pdf [Accessed February 17, 2020].

Ullah, A., 2014. ASA 320 Summary Materiality in planning and performing the audit. LeAccountant.com. Available at: http://leaccountant.com/2014/12/17/asa-320-summary- materiality-in-planning-and-performing-an-audit/ [Accessed February 17, 2020].

Westpac Group, 2021. Westpac Group September 2018 Pillar 3 reports. Available at: https://www.westpac.com.au/content/dam/public/wbc/documents/pdf/aw/ic/Westpac_Pillar_3_Re port_September_2021.pdf