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3 pages/≈825 words
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APA
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Accounting, Finance, SPSS
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English (U.S.)
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Topic:

Audit Risk Assessment and Planning of A2B (Cabcharge Australia)

Essay Instructions:

You are a part of the team responsible for planning the A2B Australia Ltd (ASX code – A2B), a company providing personal transport solutions, audit engagement for 2020. You are required to gather relevant background information and prepare a report for a meeting with your audit seniors. Assume that this is the first time that the audit will be conducted by your audit firm for this client.
Your report must address the following issues:
Required:
(a) What are the areas in which A2B conducts its operations? (4 marks)
(b) Are there any events or conditions that may cast significant doubt on the A2B’s ability to continue as a going concern? Explain. Your answer should be supported by at least three factors. (6 marks)
(c) Based on your risk analysis and understanding of A2B and its environment, list and explain three accounts that could be at risk of material misstatements. You also need to identify the key assertion at risk for each identified account. (12 marks)
(d) Identify an appropriate base and set planning materiality for A2B. Explain why you have chosen this base and the percentage you have used. (4 marks)
(e) Lately A2B acquired Gold Coast Cabs (fleet of approximately 400 taxis) to further advances its strategy of offering quality services on a national basis. How will this acquisition affect your 2020 audit plan for A2B? Your answer should be supported by at least four factors. (4 marks)
The answers for above questions should be reflective of your in-depth understanding of how the A2B operates. You should conduct extensive research and perform an analysis of the annual report of A2B for the year 2019 and any other relevant information that you have obtained. (Hint: company’s financial results, financial press and other business media).
A2B’s 2019 Annual Report is available via link below:
https://www(dot)a2baustralia(dot)com/upload/content/pdf/15.%202019%20Annual%20Report.pdf

Essay Sample Content Preview:

Audit Risk Assessment and Planning of A2B
Student Name
Institutional Affiliation
Audit Risk Assessment and Planning of A2B
A2B Australia was formerly known as Cabcharge Australia. The Australian company is registered on the Australian Securities Exchange. It is an ASX 200 company which was founded by Reg Kermode. A review of its company report gives an insight into its operations.
(a) The areas in which A2B conducts its operations (4 marks)
The A2B Company is mainly involved in providing taxi services in the country. The company also offers payment and technology solutions that support successful operations in terms of personal transport services. Further, A2B offers courier services to customers. The company has embraced modern technology in response to the changing market dynamics through investing in service improvements, technology, marketing, and its customers.
(b) Events or conditions that may cast significant doubt on the A2B’s ability to continue as a going concern? (6 marks)
The company is currently focused on strengthening its market position and share, and thus improving its sustainability. However, various factors could negatively affect the company’s ability to continue as a going concern, thus hindering its sustainability goals. One of such factors is the coronavirus pandemic, which has negatively affected all businesses, including A2B; the pandemic has resulted in reduced sales volumes and decreased profitability. Due to the lockdown, some of the markets where the company operates, for example, Australia ( Melbourne and Sidney,) had to a major decline in such operations as booking of cars. Second, the company has registered negative financial operations and cash flows due to reduced sales, and this could also hinder the company’s ability to continue with operations. Third, the company’s revenue generation was adversely affected by the decrease in ta fares, thus reducing its overall profitability. The stock market value of the company has also reduced significantly, and this could affect its sustainability. Other factors include stiff competition from service providers who offer similar services at lower rates and thus losing customers and the existence of cheaper, duplicate services and products.
(c) Three accounts that could be at risk of material misstatements (12 marks)
Analysis of the A2B and its environment and risk analysis of the company shows that three accounts that are currently on the risk of material misstatement are cash, revenue, and bank, and its receivable accounts.
The company’s revenue account pr...
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