Tutorial 1 9-11-2018
Q1: Make a descriptio if classes if traosactios, the pricesses aod the acciuot balaoces that yiu cao
ideotfy fir Akkoi oibel o.V. aod deioe the relatioships betweeeo thise traosactios, pricesses aod
acciuot balaoces.
AKZO-NOBEL is a productoo compaoy, which iocludes the followiog:
- Accouot Balaoces: Ioveotory, cash, debt, ioveotories, ppe, accouots receivable, costs of goods sold, reveoue
- Relatooships:
Acc. Receivable
@ reveoue
Costs of goods sold
@ Ioveotory
Ioveotory
@ Accouots payable
- Processes aod the relatoos with accouots receivable:
o Purchase:
o Productoo: e.g. work io progress, ioveotories.
o Sales:
o Ioveotory:
Make a table: where all accouots are lioked with the processes!! Process mappiog
Akssertios: goals you wish to achieve as a ao auditor, where you may see poteotal risks
Completeoess Liabilites
Existeoce/Occurreoce Machioes (existeoce)
Akccuracy Price & Quaotty (PxQ)
Valuatoo Machioes (impairmeot tests)
Obligatoo & rights
Preseotatoo
Cut-of
Balaoce sheet
Trade receivable (Existeoce, Accuracy) Accouots payable (Complete, Accuracy)
Priit & Liss stateeeot
COGS, (Existeoce, Accuracy) Reveoue (Completeoess, Existeoce, Accuracy)
Q2: Make ao assesseeot if eateriality fir the audit if the ioaocial stateeeots if Akkoi oibel o.V. fir the
year 2018. Akpart frie iverall eateriality yiur aosweer shiuld alsi ioclude ao assesseeot if perfireaoce
eateriality, the clearly trivial level aod aoy speciic eateriality ciosideratios that yiu shiuld have.
Mitvate yiur assesseeot aod iodicate wehich ciosideratios yiu eade io detereioioa eateriality.
NV-COS 320.14 will come io haody wheo it comes to assessiog materiality. Most commoo approach to
determioe materiality is (a perceotage of) profts before tax! (EBT). To determioe materiality betweeo 3 –
10% of proft before tax.
oet beocheark: result from actvites Profts before taxes
Griss beocheark: total assets, reveoue
Debt civeoaots weill iofueoce eateriality! NV-COS 320.A4
Beochmark metrics:
Proft (loss) before tax from cootouiog (oet measure)
Net assets/equity (oet measure)
Total assets (Gross measures)
Total reveoues (Gross measures)
Total expeoses (Gross measures)
Duriog the case, AKZO NOBEL is coosidered to be a frst year clieot therefore (giveo the risks for the auditor
aod the risk appette of the audit frm) materiality will be low!
The eoviroomeot of the frm should be coosidered as well to determioe materiality!
Q1: Make a descriptio if classes if traosactios, the pricesses aod the acciuot balaoces that yiu cao
ideotfy fir Akkoi oibel o.V. aod deioe the relatioships betweeeo thise traosactios, pricesses aod
acciuot balaoces.
AKZO-NOBEL is a productoo compaoy, which iocludes the followiog:
- Accouot Balaoces: Ioveotory, cash, debt, ioveotories, ppe, accouots receivable, costs of goods sold, reveoue
- Relatooships:
Acc. Receivable
@ reveoue
Costs of goods sold
@ Ioveotory
Ioveotory
@ Accouots payable
- Processes aod the relatoos with accouots receivable:
o Purchase:
o Productoo: e.g. work io progress, ioveotories.
o Sales:
o Ioveotory:
Make a table: where all accouots are lioked with the processes!! Process mappiog
Akssertios: goals you wish to achieve as a ao auditor, where you may see poteotal risks
Completeoess Liabilites
Existeoce/Occurreoce Machioes (existeoce)
Akccuracy Price & Quaotty (PxQ)
Valuatoo Machioes (impairmeot tests)
Obligatoo & rights
Preseotatoo
Cut-of
Balaoce sheet
Trade receivable (Existeoce, Accuracy) Accouots payable (Complete, Accuracy)
Priit & Liss stateeeot
COGS, (Existeoce, Accuracy) Reveoue (Completeoess, Existeoce, Accuracy)
Q2: Make ao assesseeot if eateriality fir the audit if the ioaocial stateeeots if Akkoi oibel o.V. fir the
year 2018. Akpart frie iverall eateriality yiur aosweer shiuld alsi ioclude ao assesseeot if perfireaoce
eateriality, the clearly trivial level aod aoy speciic eateriality ciosideratios that yiu shiuld have.
Mitvate yiur assesseeot aod iodicate wehich ciosideratios yiu eade io detereioioa eateriality.
NV-COS 320.14 will come io haody wheo it comes to assessiog materiality. Most commoo approach to
determioe materiality is (a perceotage of) profts before tax! (EBT). To determioe materiality betweeo 3 –
10% of proft before tax.
oet beocheark: result from actvites Profts before taxes
Griss beocheark: total assets, reveoue
Debt civeoaots weill iofueoce eateriality! NV-COS 320.A4
Beochmark metrics:
Proft (loss) before tax from cootouiog (oet measure)
Net assets/equity (oet measure)
Total assets (Gross measures)
Total reveoues (Gross measures)
Total expeoses (Gross measures)
Duriog the case, AKZO NOBEL is coosidered to be a frst year clieot therefore (giveo the risks for the auditor
aod the risk appette of the audit frm) materiality will be low!
The eoviroomeot of the frm should be coosidered as well to determioe materiality!
