Identify The Audit Risks And Explain

Perform the planning analytical review for the financial statements of Matty Kitchens, analyzing the key movements. Include supporting calculations. (10 marks) Ans: While doing audit, it is very essential to understand the business model of the company, which needed to audited . Apart from that, we should also the risk prone areas of the company, that are inclined to fraud happening. Now here I understand that, as per the business model of Matty Kitchens, as it manufactures and sells all the packaged meals, there would be more importance of checking the status of inventory along with inventory holding days and within how many days, inventory is getting replaced. As the management has concern of reduced profitability, it should ensure that, which areas, where expenditure have gone up without proportionate increase revenue. Following need to be followed:Procedure performance with respect to the acceptance and continuance which documented in CAS 220, Quality Control for Financial Statement Audit.Compliance evaluations with ethical requirements, inclusive of independence, in accordance with CAS 220.An understanding establishment of the terms of the engagement, in accordance with CAS210 Agreeing the Terms of Audit Engagements. Using the notes that you