ASSURANCE REPORT ON ZOOM SNOWBOARD INC

Document Type:Case Study

Subject Area:Accounting

Document 1

The primary and main user of Zooms financial statements includes the bank, investors, board of directors and zoom's management. The bank has interests as it has laid its capital for the company to grow and expects the company to grow so as to clear its debts. Investors, on the other hand, need to know whether they are gaining profits or losses from their shares. it is common that capital in an institution comes up with dividends. it is thus an interest that if the company gains more profits then the investors will get higher dividends and may sell their shares at a higher price. The board of director's act as supervisors and also act as the shareholders' representatives. Any failure in the company may result in poor governance from the management. Any failure may lead the directors losing their role which is liable to allowances. Zooms management, on the other hand, needs to realize goals and objectives. it is thus a requirement for them to monitor the flow of cash and generate a company with higher returns. We have different factors that may lead to changing in decisions mainly by the primary users. According to overall materiality, we have the following instances as cited in the exhibits. Some of the details included. an example being exhibit 1 on the condensed income statement in the year 2011; no investor would risk his money in an entity that is running on losses rather than gains. On the third exhibit the first statement where we find Emma and Bill asking for a loan from the bank without asking from the other board of directors which is also evidently clear as shown in exhibit 4 the fourth statement where Emma and Bill believe that they make the right decisions even without the consent of the board of directors.

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Such information may affect some clear decisions in an institution as mistrust among the directors may lead opinionated reasoning which at the long last may lead to the collapse of an entity and misunderstandings in the long term when it comes to making the right decisions that would propel the entity to the next level. Performance Materiality Performance materiality, on the other hand, can be expressed as the small errors that when added up may lead to a material error (Moroney, 2016). Thus this mistakes should be really looked upon. exhibit 4 the third state where we find that the debt is written off though in unrealistic circumstances. If such transactions occur at a higher rate then the company’s financial statements may not be fair and will not serve their primary role which is to show the financial position of an entity at a particular time.

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some of the business risk factors include credit risks, liquidity risk, market risk and operational risk among many others. Different sectors face different risks in an entity. We first get an overall view of the risks above. Credit risks may be defined as where an associated borrower goes to default. This is an extreme loss to the company and does not only affect the management but also the shareholders. The internal audit team may also suffer from poor controls and thus faces a lot of exploitation areas where employees of related fields may use without the information of the owners. Risk of material misstatements The risk of a material misstatement at a financial level is mainly assessed in two levels that include at the assertion level and at the financial statement level.

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The assertion level consists mainly of risks. The risks mainly consist of the inherent risks and the control risks. The financial statement level mainly deals with frauds. Existence is also affected where responsible personnel acquires ghost machines. They tend to use expenses which are not factual and affecting the general situation of the entity. Issues related to overall Audit strategy The company in a bid to offer quality services and at the same time increase the customer base has decided that it will increase the level of skepticism. Customer's relation suited in a way not to offend customers and at the same time increase the sales volumes together with the revenue at large. Deadlines will also be met by providing a system where customers can get their shipments quicker aided by the salesmen.

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Operational risks need effective controls where we have segregation of duties. Entitlement to a specific task will lead to better working conditions and better accounting systems. Credit risks will be handled by ensuring that all credit related customer’s records have been checked. Customers with a bad debt history will not get goods on credit. Significant accounting and audit issues The inventory account in the institution should be precisely looked on completeness. Differences in Auditors' Materiality Assessments When Auditing Financial Statements and Sustainability Reports.  Contemporary Accounting Research 33. Rieckhoff, Ramona, Anne Bergmann, and Edeltraud Guenther. Interrelating material flow cost accounting with management control systems to introduce resource efficiency into strategy. Journal of Cleaner Production 108 (2015): 1262-1278.

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