The paper “ One Tel Company - Auditing and Assurance, Strategic Business Risk Assessment, Inherent Risk Assessment, and Preliminary Going Concern" is a meaningful example of a case study on finance & accounting. The determination of risk is one of the core items that an auditor to work on when engaging any given audit assignment. The inherent risk is one of the risks that must be assessed during audit exercise. The assessment of inherent requires the client to ignore the presence of internal controls i. e. secondary review of financial statements.
The evaluation of inherent risk revolves around the nature of the client’ s business since the auditor looks at how susceptible the financial statement assumptions are to the material misstatement (Best et al. ). The level of assessments of inherent risk depends on the business environment, business strategies, and the manner in which financial reporting and account balances are posted. The ultimate aim of most audit assignments is to determine the going concerned of the company. The ‘ going concern’ entails the determination of the company to continue operating in a foreseeable future.
The accounting assumption of going concern decision is derived majorly on company ability to sufficiently meet commitments, objectives, and obligations when they fall due. The analysis below determines the factor that contributes to inherent risks facing the One (Fiedler). Tel Company financial reporting and account balance level, and also going concerned of the company on either to assess at high, medium, or low. Factors that could contribute to increased inherent risk assessment in financial reporting and factors identified during the strategic business risk assessment. The important factors when auditing for inherent risk for the One Tel Company entails assessing the risk of material misstatement arising from financial reporting which include; The limited managerial experience in the rapidly growing industry poses a great challenge to the company.
The managers are required to demonstrate high ability in managing the day to day operation of the company as well as advising the board on various dynamics in the industry.
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Gay, Grant E, and Roger Simnett. Auditing And Assurance Services In Australia. North Ryde, N.S.W.: McGraw-Hill Education, 2012. Print.
Simnett, Roger, Elizabeth Carson, and Ann Vanstraelen. "International Archival Auditing And Assurance Research: Trends, Methodological Issues, And Opportunities". AUDITING: A Journal of Practice & Theory 35.3 (2016): 1-32. Web.