Audit, Assurance and Compliance | Online Assignment Help

Assignment Question
You are currently planning the 30 June 20X7 audit of Forest Ltd, an
Australian-owned company that produces and exports woodchips to
Japan. Forest’s operations are located in Eden, on the far south coast of
NSW. Timber is purchased from forests nearby, processed into woodchips
and immediately stockpiled for export at the company’s shipyards at
Twofold Bay. Forest contracts timber cutters to deliver set tonnages of
logs to its mill throughout the year. Woodchips are transported to Japan
on charter vessels, which make an average of one trip a month.
At a recent planning meeting with Forest Ltd’s senior staff, you obtained
the following overview of this year’s operations:
A massive conveyor belt is used to transport the woodchips from the mill
to the stockpile. The manufacturer of this belt was recently taken over by
an overseas competitor of Forest Ltd, Chipper Ltd, which processes
woodchips in several South-East Asian countries. Chipper Ltd has
indicated that it is willing to sell equipment to its competitors, but at
double the price it will sell to its other customers. It is doubtful whether
any other companies in the world manufacture such specialised conveyor
Based on current usage figures, it is expected that the existing conveyor
belt will last until December 20X8. Sufficient spare parts are on hand to
carry out routine maintenance work. However, should a replacement belt
be required, it would take at least six months to have a replacement made
and shipped to Australia, and a further four weeks to install and test it. It
is unlikely that the company could survive a six months interruption to
normal operations. Management are currently deciding whether they
should order a replacement belt from Chipper Ltd despite the excessive
cost, or continue to search for an alternate supplier.
Timber is purchased in 50 hectare lots from plantations and state forests.
In the past, 70% of timber was sourced from plantations, however this
has fallen to 50% in the current year. The corresponding increase in
timber sourced from state forests has angered environmental groups.
Protests have been held in several forests, which has slowed production
and frustrated the contractors, who are only paid once set tonnages of
timber are delivered to the mill. In addition, several shipments of
woodchips have been delayed, angering the Japanese customers who are
threatening to deduct 20% from amounts owing as compensation for lost
production time.
Last month, a protester suffered a broken leg, allegedly because he was
hit by a timber truck. The protester was blocking the main access road to
one of the state forests at the time of the accident. The protester is now
suing Forest Ltd for damages, claiming the contractor was in fact an
employee of Forest Ltd at the time of the accident, and was acting on
Forest Ltd’s instructions. Forest Ltd is fighting the case and appears to
have a reasonable chance of winning; however, the adverse publicity
being generated is making the state government nervous about selling
Forest Ltd any more of its timber resources.
One of Forest Ltd’s customers, Wood Ltd, is claiming that the latest batch
of woodchips it received was contaminated with a microbe. This microbe
affects the physical structure of the chips, reducing the pressure the chips
can withstand when compressed. This has made the chips useless for
heavy duty items such as desks and bookcases. Wood Ltd is refusing to
pay its account, which is already five months overdue. Forest Ltd has
launched an investigation into the allegations, but as yet has not been
able to substantiate them.
In January, Forest Ltd upgraded its accounts payable system to a fully
integrated package that automatically updates the general ledger when
creditor entries are made. Some problems have been experienced with
the creditors ledger, which is split into $US and $AUD amounts. In some
cases, $US amounts have been recorded as $AUD, resulting in inaccurate
creditor balances. Month-end rollovers have also proved problematic, with
creditor balances being incorrectly re-set to zero at the first of every
month. This has required each creditor’s history to be re-entered manually
each month, a time-consuming process that is taking accounting staff
away from their normal duties.
During the period, the Australian dollar has remained steady against the
Yen, although it fell by about 3% against the US dollar. Debtors are
invoiced in $US at the time of shipment, and paid in $US one month after
the shipment is received. It takes around six weeks for the charter vessels
to travel from Twofold Bay to Japan. All plantations from which Forest Ltd
sources timber are owned by US firms, which demand payment in $US
prior to the timber being cut. A recent downturn in the Japanese economy
is affecting forward orders, which have fallen by 15%.
(a) For each of the following items in Forest Ltd’s financial report, identify two (2) factors in the information provided that increase audit risk:
(i) Accounts payable;
(ii) Commitments and contingencies;
(iii) Inventory; and
(iv) Receivables.
(b) Discuss one (1) adjustment to be made to your audit plan in response to the audit risk associated with each of the factors identified in part (a).
(c) Outline six (6) factors that indicate Forest Ltd may encounter going concern problems over the next 12 months.
(Maximum 2,000 words)

Don't use plagiarized sources. Get Your Assignment on
Audit, Assurance and Compliance | Online Assignment Help
Just from $13/Page
Order Now
Calculate the price
Make an order in advance and get the best price
Pages (550 words)
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with Homework Writing Services
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Excellent job
Customer 456821, November 30th, 2022
Visuals could be enhanced.
Customer 454483, April 13th, 2022
good job
Customer 452741, March 27th, 2020
Good job after revision. Make Grammarly your tool.
Customer 462769, March 29th, 2022
Political science
Great job God bless you
Customer 453983, February 4th, 2020
Great content. Thoroughly read all instructions.
Customer 462281, April 6th, 2022
English 101
i received the paper early
Customer 461063, November 1st, 2022
well done
Customer 452441, April 14th, 2022
Thank you for doing great work.
Customer 462485, June 3rd, 2022
Discrete Mathmatics
Be keen on instructions.
Customer 462387, March 30th, 2022
Healthcare & Medical
Good content and organization.
Customer 452441, April 13th, 2022
Good work on the spreadsheet.
Customer 459155, May 31st, 2022
Customer reviews in total
Current satisfaction rate
3 pages
Average paper length
Customers referred by a friend
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat