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Question Answered step-by-step Question You are a part of the team responsible for planning the A2B Australia Ltd (ASX code - A2B), a company providing personal transport solutions, audit engagement for 2020. You are required to gather relevant background information and make a report for a meeting with your audit seniors. Assume that this is the first time that the audit will be conducted by your audit firm for this client. Your report must address the following issues: Required: (a) What are the areas in which A2B conducts its operations?) (b) Are there any events or conditions that may cast significant doubt on the A2B's ability to continue as a going concern? Explain. Your answer should be supported by at least three factors. (c) Based on your risk analysis and understanding of A2B and its environment, list and explain three accounts that could be at risk of material misstatements. You also need to identify the key assertion at risk for each identified account. (d) Identify an appropriate base and set planning materiality for A2B. Explain why you have chosen this base and the percentage you have used. (e) Lately A2B acquired Gold Coast Cabs (fleet of approximately 400 taxis) to further advances its strategy of offering quality services on a national basis. How will this acquisition affect your 2020 audit plan for A2B? Your answer should be supported by at least four factors. The answers for above questions should be reflective of your in-depth understanding of how the A2B operates. You should conduct extensive research and perform an analysis of the annual report of A2B for the year 2019 and any other relevant information that you have obtained. (Hint: company's financial results, financial press and other business media). A2B's 2019 Annual Report is available via link below: https://www.a2baustralia.com/upload/content/pdf/15.%202019%20Annual%20Report.pdf Incomplete question Expert Tutor Answer & Explanation  Solved by verified expert(a) The A2B provides mainly tax industry services in Australia. Also, the A2B organization offers technologies and payment solutions thus allowing successful operations of personal transport services. The organization also provides courier services to its clients. (b) Some of the events or conditions that may cast significant doubt on the ability of A2B to continue with its going concern include; the effects of COVID -19 pandemic is one of the most significant events in the year 2020 that may affect the on-going concern of A2B company. The lockdown on non-essential in most cities of Australia such as Sidney and Melbourne led to a significant decline in the bookings of cars. Negative operational cash flows or financial operations may also cast doubt on the ability of the company to continue with on-going concern. For instance, a decrease in tax fares affected the revenue generated by the organization. A decrease in the stock market value may also impact the company's ability in its on-going concern. (c) Based on the risk analysis and understanding of A2B and its environment, three accounts that are at the risk of material misstatements include; revenue, cash, and bank as well as the trade receivables accounts. The key assertions for each identified account would be as follows; The revenue account which mainly involves the recording of every transaction may be at risk factor since not all the transactions are recorded as a result of completeness and these should be checked and reviewed during the audit fieldwork. Also, cash and bank accounts could at risk of auditing because several non-cash payments are being done and therefore, cash and bank transactions need to be rechecked and reconciled. The key audit assertion on this account would be accuracy. Trade receivable account will outline credit transactions that are mainly handled by the corporate clients and the cut off period for the transactions should be confirmed. The main audit assertion for the trade receivable accounts would be cut off. (d) The most appropriate base and set planning materiality for the A2B organization would be profit before taxation. This is because the organization is a service business that specializes in tax services. The percentage used should average between 5 and 10% of the profit before taxation. (e) The acquisition will affect the due diligence and accuracy of the 2020 audit plan and therefore, it should be checked. The four main factors that I would check include; the internal and accounting control factors for the new company that should be checked to determine whether they are in alignment with A2B to aid the consolidation process. Besides, the payment details and methods should be checked, and also the transition of the management should be checked to ensure that the two businesses operate as per the established terms of the agreement. Step-by-step explanation See answer. Good luck! 谢谢亲的回惠顾，期待您的下次光临！ 添加客服微信:bbwxnly，购买沟通交流so easy Coursehero｜Scribd｜Studymode｜Oneclass｜Chegg｜Studyblue｜Termpaperwarehouse｜SolutionInn｜Bartleby 谢谢亲的支持，祝您学习愉快:) |
