Proposal for Partnership and Business Expansion with Alico

Question 1

This invitation must be seen as a good aspect for business for Mr peter and his wife. The chief executive of Alico Plc can be helping out them in their audit firm for the proper business and marketing values. As Mr Peter was engagement partner here thus it wouldn’t be hard for him to become a good partner with Alico Plc.

This approach must be accepted by the firm so that new partnership and aspect for business can be formed in this case. The organization must not focus on work of audit managers and rather talk to higher manager for the proper knowledge regarding the firm and their workings. The director’s shareholders must be met before any beginning of business.

It might happen that the fees charged for Fortress limited might be high and more than the required one, thus their disappointment is a justifiable one. If they are to pay more than the payable tax then it might happen that they may be not participating in any sales partnership in future with the organization. Their demand of reducing the cost and business dissertation help is to be seen by the partnered organization so that proper justification can be done. If it happens that their demand is incorrect and the taxation applied are true and variable then it must be paid by them.

Question 2

The confirmation process is required to be performed in Global Designer footwear Ltd. In the confirmation process the information regarding the appropriate audit evidence is to be analysed properly. Auditors play an important task in accessing the relevant audit evidence response so that the risk related to the manufacturing and business can be analysed here in Global Designer footwear Ltd easily. The scope of the auditor is limited one here in obtaining the sufficient response related to the risk in the financial statement available. If proper audit evidence is not being prepared according to auditor then with the auditor's report help. This can be made possible and the modifications can be easily done for the business here. The auditor decides for the positive and the negative audit confirmations and thus they require to form some control and designing method to perform this confirmation process (Goldhaber, 2017). The first process includes member identification that is responsible for controlling the audit, then second is selecting the items, designing and communication regarding the confirmation process and the final result orientation procedure.

positive and negative confirmation

The positive confirmation is an enquiry that is made to receive a response. This enquiry is generally made for the response to understand the matching of those with that of the auditors is examining. Auditor requests a match still if there is no exception found in those matching.

Whereas in the case of negative confirmation the third party will be responding to the discrepancies that are found in this record (Aber, 2017). This negative confirmation is designed for clients to be used for internal controls to happen.

walk through test

Walk through test is generally a procedural test that is used in the audit firm for a system for preparing the reliability. Thus walk through analyses the transaction from in each step in this account system from the initial to the ending position. These walkthroughs are generally an important aspect in analysing the weakness and problems that persist in the accounting system. The overall document created and the staffs are all looked through in this walk through methods.

Three methods for trade receivable systems can be retained by the debtors about the payment that has been due, providing those discounts and giving them offers. The trade receivables can be ascertained with good quality if the regular reminder is given in a friendly way. The next option is that the discounts on the already purchased goods can be given if provided before time. The last one is that the company can give an offer to leave the interest and only the payment can be made by debtors then the receivable account may be beneficiary.

Question 3

Different type of audit opinions

Unqualified Opinion: The auditor provides an unqualified opinion when they are satisfied with the information that all the material provided to them is true and the financial statements of the organisation are true. Unqualified opinion means that the report provided by the auditor has “true and fair view”.

Modern Opinion: If the auditor gives opinion along with unqualified opinion then it is termed as modern opinion as it consists of some modification in unqualified opinion. This comes with limitations in scope of work or dispute with management.

Qualified Opinion: This opinion is given by the auditor when they cannot provide unqualified opinion. This is given when the company has some material mismanagement of information related to them that is not adequate or proper (Tsipouridou, 2018). Here every statement is right but only the material information is not provided.

Disclaimer of opinion: This opinion is provided when the auditor is not provided with any of the necessary information by the management. Here the auditor is not stating that the organisation has any misstatement but that there is no evidence that the organization has a true or fair view.

Adverse opinion: In this opinion the auditor claims that the evidences denote material mismanagement and the statements are not true for the organization.

According to the case given the auditor must give a qualified opinion which will consist “all the information is true and fair except for the raw material information as there is no absolute information gathered”

Main element

Responsibility of management: This element will state that the financial statements should be prepared according to the accounting policies and concepts and this is the basic responsibility of management.

Auditor’s Responsibility: The auditor must plan a proper procedure that should denote from where he should start the work and what are the limitations. Also the dead lines must be fixed with all the other responsibility.

Auditor’s Opinion: The opinion that has been formed with the information gathered from the organisation and evidence that was obtained while auditing (Nisbet, 2019). The opinion is generated by viewing different information and collecting data of financial statements. The materials that are mentioned in the books of accounts and physical materials must be the same for true opinion.

Signature of the Auditor: After stating whether the organizations financial statements are analyzed to be true the auditor must put on his signature as evidence.

Date of the Auditor’s Report: The auditor must present their report before the annual meeting.

Law or Regulation for Auditor’s Report: The laws and regulations that are mentioned by the countries and accounting policies must be mentioned so that it can be compared with current organisation’s financial statements (Academia.edu, 2020).

Reference List

Journals

Nisbet, A.D. and Leslie, A.W., Nortel Networks Ltd, 2019. Method and apparatus for creating a network audit report. U.S. Patent 6,834,304.

Goldhaber, G.M. and Krivonos, P.D., 2017. The ICA communication audit: Process, status, critique. The Journal of Business Communication (1973), 15(1), pp.41-55.

Aber, T.A., Chauncey, P.A., Cirulli, S.B., Modrak, G.P., Sjostrom, W.M. and Wilson, S.L., International Business Machines Corp, 2017. System and method for invoice imaging through negative confirmation process. U.S. Patent 7,283,976.

Tsipouridou, M. and Spathis, C., 2018, March. Audit opinion and earnings management: Evidence from Greece. In Accounting Forum (Vol. 38, No. 1, pp. 38-54). Taylor & Francis.

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