Role of Auditing and Assurance Services

Question: Discuss about the Role of Auditing and Assurance Services. Answer: Introduction Auditing Assurance Services are important for the business organization and play a vital role in detecting the inherent risks exist in the organization. A business risk approach has been applied for these specific services as well as standard practices of auditing have been integrated with national and international auditing standard(BoticaRedmayne, 2012). Auditing Assurance Services assist the business entities in detecting the weaknesses in maintaining a record of the business transactions. Besides this, it assists in preparing the report from the information about the financial events that took place during the financial year within the business entities. Apart from this, it assists in detecting the in-house problems along with the operational inefficiency and in this way assists in enhancing the level of business activities of the business entities plus the entire stakeholders are benefitted by Auditing Assurance Services (Kumar, 2014). The main role of Auditing Assurance Ser vices is to verify the financial reports of the business entities with the actual data and information; there are various effective tools, and techniques used to check the financial information produced by the business entities within their financial reports. After completing the Auditing work, the auditors issue an audit report. In audit report, the auditors provide the real information about the financial position of the business entities (Redmayne, 2012). The audit reports improve the trustworthy and reputation of the business entities. Usually, the third parties perform external audit services . Thus, its reliance improves in many folds. The auditors usually look after the benefit of the entire stakeholders of the business entity. For this specific report as per the requirement, an organization One Tel has been taken. It was one of the most renowned Australian companies. The company was collapsed within six years of operation. The factors which play a key role in measuring the i nherent risks are depicted (Redmayne, 2007). Apart from this, the discussion about the inherent risks and their influence in the course of auditing will be discussed. Discussion about factors contribute in increasing inherent risk assessment The factors provide an increment of the risks at the financial levels of the report for the organization. Some of the crucial factors are identified with the creation of an inadequate structure for the business organization with the lack of professional ethics also seems to be depicted in this case(Cohen Simnett, 2015). The top level of the management of the organization seems to be corrupted, and thereby the auditors are appointed by the company with focusing on the lack of professional ethics with lacking of integrity, objectivity, and the professional competency also seems to be depicted in this case(Fiume, Onesti and Sannino, 2014). The role of auditors in the case of One. Tel seems to be heavily criticized and thereby the company seems to be scrutinized for the actions that are undertaken for the purpose of Liquidation. Furthermore, the hiding of the information regarding the financial condition of the company is depicted and thereby the auditor's performance is seemed to be in the state of inappropriateness is judged for the company(Hasan et al., 2005). The effectiveness and the efficiency are seemed to be reduced in the case of auditing and thereby the strategic risk assessment of the business seems to be taking place. With the creation of appropriate judgment, the lacking of the professional ethics for the company is identified with thereby creating a deficiency in the corporate governance and thereby the detection of these problems led the company to the failure of the business and henceforth the company achieved the state of liquidation(Imoniana and Perera, 2016). Huge loss is indicated by the company with making the wastage of the resources and thereby the inappropriate decisions made by the management of the company led to a state of the downfall and also helped the company to achieve the state of liquidation(Imoniana and Perera, 2016). Thereby, both the auditors of One.Tel who are BDO and Ernst Young lacking integrity with the creation of biases i n the management and the key financial profession of the company. Identification of known factors in strategic business risk assessment As per the financial statement of the business firm, it can be observed that in the financial position statement or balance sheet statement that the liabilities of the company are continually increased. Besides this, in cash flow statement of the company in can be seen that the operation cost of the firm was much higher in comparison to operating profit (International financial reporting standard 6, 2004). The employees suppliers payment was much higher than the payment received from the consumers of the company. For this reason the company loss in the operating actions(Kent, 2011). Moreover, the investing actions of the company were also a loss for the company, as the company has to invest a huge amount of money for their plan and equipment. Only financing actions of the company were fruitful and from theses the company made a profit. As per the income statement of the company, it is precisely seen that the company has incurred losses(Koppeschaar, 2012). In the year of 2000, the com pany accomplishes huge growth nut despite the growth the company it was running in losses. Usually, a company and its management have the same objective and target for the future of the company. However, often the rule does not work, and it can be seen that the objective of the management of the company and the other shareholder of the company has been changed and in that case, the problem arises(Millichamp, 2002). Moreover, this specific situation of the company is called Principle-Agent Problem. The undertaken company face same types of problem and it is the core reason that collapses the company. The company was the 4th largest company, in the field of telecommunication. Moreover, the company took initiation to penetrate in the global market thus hold UK, France, Netherland and Hong Kong market. Discussion about inherent risk factors and their role in increasing inherent risk assessment The inappropriate corporate governance is notified, and thereby it becomes the reason for the downfall of the company which led the company to the state of bankruptcy (Ruhnke and Lubitzsch, 2010).It thereby helps in the creation of poor management structure of the company with facing the vital reason for achieving the state of liquidation. The observation that is made in the case of the company depicts that the company consists of the four members who are the no executive directors of the company. It also helps in providing the views that seem to be related to the state considered and thereby four directors are subjected to take part in every year's election(Saxena et al., 2010). The members of the company seem to be independent with consisting of the position of the company. For the above conditions depicted, an investigation is made with thereby creating an important reason for the enhancement of the expenses and thereby the creation of the investigation helps in including a huge a mount of the expenses made by the company(Ruhnke and Lubitzsch, 2010). For this reason, the company has to face a lot of loss for which the state of bankruptcy has occurred for the company. The audit partner of the company along with the other external auditors was blamed for creating an over stretching of the Australian Accounting Standards and thereby they were fined about forty-eight million. It is observed that huge amount of remuneration I created with thereby creating an amount of concealing cost incurred on the company(Steane and Christie, 2001). It thereby helps in indicating the values that are seemed to be depicted for the case with the appropriate description made by the auditors. The incurring of the strategic expansion with the creation of huge amount of expenses helps in indicating the values depicting the state of bankruptcy. Assess the risks as high medium or low The firm has high risks and low surrender strategies along with a variety of incentive for the new customers, and this could not be continued in Australia where the market is small. In Australia there is six services provider in the mobile market, which is the2nd largest than any other developed country al around the globe (Wink and Corradino, 2011). Moreover, the expenses of the business firm were beyond of the financial capability of the company. Apart from this, the other telecommunication companies in Australia offered their subscription in much lower price than the One Tel Company. The business strategies of the firm were highly dependent of Telstra along with Optus and at the same time, the companies are the biggest competitors of the company. One Tel uses to sell extensive phone capacity, and the company procured that capacity from the companies Telstar and Optus. Moreover, the company offered economical packages to their customers, but the two key firms Telstra and Optus have a nominal cost for operating than One Tell. Identification of the leadingfactorsmeant for effective decision-making The other influential factors that are depicted in this case helps in indicating the efficient decision-making system with thereby creates billing failure. The auditing process helps in indicating the intentions of the senior IT workers with the failure of the company due to the provision of the bonuses for the establishment of the new programs. For the appropriate establishment, testing and documentation are requisite with the purpose of creating a necessary quality of the programs. With the consideration of revealing of the senior account, the structure of the accounting system led to the failure of many procedures that are depicted with considering the views of the billing system.It also helps in creating the initial customer base and thereby the perfect handling of the issues seems to be taking place. Afterward the company's customer base seems to increase in volumes in order to create the attraction of the customers for the products and the services provided by the company. It t hereby helps in increasing the numbers of the customers with the continuation of appropriate billing system in the organization and henceforth the demand seems to fulfil the criteria. With neglecting the above conditions, it seems to be obvious that the failure of the demand will certainly take place, and there by process of the invoice of the company will be get delayed and thereby affecting the organization's financial condition.(Wink and Corradino, 2011). It also led to the inappropriate tracking of the invoices that seems to be easily getting delivered with depicting the conditions of the consumers and thereby the monitoring seems to be inadequately done by the organization(Wink and Corradino, 2011). Henceforth these are the other influential factors that seem to be depicted in this case of the organization One. Tel. Conclusion It is clearly understandable that the collapse of the firm One Tell cannot be pointed to only one party. There was deficient in the structure of the business firm, shortage in the professional ethics and corporate governance standard can be liable for the crumple of the business firm. Therefore, the directors and the management staffs of the companies have to pay adequate attention to the firms business along with financial activities. Besides this, they have to play an active role in running the business activities of the firm. References Ashok Kumar, K. (2014). 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