AUDIT PLANNING (BACKGROUND INFORMATION - PART 1) You are the audit manager in charge of the audit of Adelphi HealthCare Ltd. Your firm has been the auditor for the past three years. Adelphi has been...

ADELPHI HEALTHCARE LIMITED AUDIT PLAN PART 2 Student No: __________NAME:___________________
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Audit Planning Memorandum Date:
Client name: Prepared by: __________
Year end: 30 June Reviewed by: __________
6.0 (a) KEY ACCOUNT ASSERTIONS and ASSOCIATED RISKS (b) EVIDENCE
KEY ACCOUNTS KEY ASSERTIONS REASON FOR RISK AUDIT EVIDENCE REQUIRED
Research and
development
expenditure
Capital expenditure
account.
The key financial report relevant to
the audit case is the balance sheet
or the statement of financial
positioning.
This might lead to risk of over expense, as it is
considered by the business that there might be an
expense of $ 11 million, however the expenditure
during the cu
ent period is $ 3 million.
The record of financial transactions in
lieu of such capital expenditures is
equired to be scrutinized, to
determine the amount of expenditure
that has been actually spent.









The land and building
account.
The value of property is getting
educed and therefore, it is the
concern of the business to use the
most appt method of valuation of
such property of the business due to
the impact of reducing value of land
and building.
This might impact on the valuation of assets of the
usiness and also during the process of business
valuation. At the same time it is during the
preparation of balance sheet it would be a problem
for the management to ascertain the property value.
It is the books of accounts which are
equired and also with the
adjustments with the detail of
methods and policies adopted by the
usiness in relation to the valuation
of the business property.







ADELPHI HEALTHCARE LIMITED AUDIT PLAN PART 2 Student No: __________NAME:___________________
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The creditors account
and other trade
payables accounts.
The payable and the cost accounts
are considerably low. It is apparent
that from the comparisons of the
expenditures on research and
development with that of the
educed amount of trade payables
of the business, which is not that
usual.-
The prompt payment to the suppliers in spite of such
expenditures for the reserve and development might
have an adverse impact on the working capital balance
of the business.

For the evidence the trade payable
account and the banks and cash
transactions is to be scrutinized
properly. And also the other means of
the business which results in cash
inflow is to the judged to balance
etween the expenditures for
esearch and development and also
the prompt payments made by
management of the business.




6.1 ACCOUNTS PAYABLE
FACTS PER QUESTION Commentary on audit work or conclusion by assistant
It is questionable that on the checking of
twenty randomly trade payables balances
there are certain disparities in the amount
paid detected. From the scrutiny it has been
apparent that a considerable amount of $
24900 has been inco
ectly recorded. The
e
ors resulted in the 3 percent of the total
trade payables.
Though it is considered that 3 percent of disparity out of the total trade payables is acceptable on the basis of
tolerable level of 5 percent accounted during the process of audit. As it is considered during the process of planning
of audit hat 5 percent of the disparities are acceptable yet it cannot be overlooked as there are three problems
detected during the process of the audit planning. Though it is not taken as material yet it cannot be left like that
and the a follow up required to check on the matter that in the future the percent of disparities can be reduced
further.







ADELPHI HEALTHCARE LIMITED AUDIT PLAN PART 2 Student No: __________NAME:___________________
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ADELPHI HEALTHCARE LIMITED AUDIT PLAN PART 2 Student No: __________NAME:___________________
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6.2 POST BALANCE SHEET EVENTS (Do this section only once the lecture has been delivered)
(a) JUSTIFICATION for ADVICE ADVICE (b) AUDIT EVIDENCE REQUIRED
For the adjustment in the reducing value of the property it has been
decided by the management to value the property on the basis of
consultant report and it is after the date of financial report prepared that
the property of the business has been valued therefore, it would be
advisable to the management of the business to go for option 2.
Pertaining to the fact that the report would be already prepared by 30
June, therefore before mailing the same it would be preferable for the
management to account the same in a note to the 30 June 2011 financial
eport.
Reveal the information in a note
to the 30 June 2011 financial
eport.
...