Audit Plan- Glaxosmithkline

Audit Plan- GlaxoSmithKline (GSK) Key business and canvas pretend: In identify to make the report more efficient we must(prenominal) diagnose the key areas of business risk and auditing risk. Business risk can be define as the risk, which could affect an geological formations ability to achieve its objectives (Gray and Manson, 2007). Audit risk is defined as the risk that the auditor gives an inappropriate audit reliance when the financial statements are substantively misstated (Soltani, 2007). In Gray and Manson (2007)s book Audit Risk can be take apart into three separate elements : 1- Inherent risk reflects the auditors opinion on the possibility of material misstatement on financial statement. 2- Control risk is the risk that internal control policies and procedures failed to sight or prevented. 3- Detection risk is defined as the likelihood that a material misstatement relating to an assertion impart not be detected by the auditors substantive testing. One should identify key area of what ? because if an auditor looks at each sleep with to the same extent then resources are spread to gently and failure to detect material misstatement is more likely.

In producing an audit report one is providing an assurance that the financial statement supply a true and fair view on the implementation and situation with the entity is facing. Therefore the key areas of business risk will be those that have the potential to have a material effect on the balance sheet or salary statement (Elliott&Elliott, 2008). This has therefore lead to the conclusion that are as such as sales misstatement, valuation of goodwill, valuation of intangible assets and valuation of PPE being the key areas of potential business risk. Misstatement of assets The reason out as to why goodwill and the valuation of intangible assets has been include is because GSK have proceeded with a number of takeovers of smaller entities, including the purchase of Stiefel Laboratories Inc (GSKs annual report, 2009, p.99). This... If you want to get a full essay, order it on our website: Orderessay

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