MUHAMMAD HARITH ADLI BIN NURUL AZMI 10DAT22F1004 KUMPULAN 7 ( HUP SENG SDN BHD)

 




PART A : 














PART C. Finding and conclusion.


1.  Verify the potential impact of these variations on the company's business risk, going concern status and any relevant issue.

Business Risk


·       Revenue

HSIB revenue increased from RM295,832,845 million in 2022 to RM318,194,335 million in 2023. This reflects a strong demand from household and successful recovery demand. However, increased raw material costs led to a drop in profitability. This can cause, the company face on pressure to maintaining their profitability.

 

·       Competition Risk

HSIB operates in a competitive, with arising from smaller local competitors to worldwide competitors.

 

·       Supply Chain Risk

In that time, have a global issues like Covid-19. But Covid-19 starting to recovery and HSIB also need to recovery from their profitability that drop due to Covid-19.

 

2. Prepare the steps would you take to corroborate the information obtained from this analytical procedure with other audit evidence, such as documentation supporting management's assertions and external sources of information.

Document Supporting


·       Sales and Revenue

Audit Step: Examine sales invoices, contracts and receipts for two years under review (2022 and 2023)

 

Purpose: To confirm that revenue recorded match actual sales transactions, ensuring no overstatement or understatement of revenue.

 

External Confirmation: Obtain confirmation from significant customers for large sales transactions and to confirm receivables balances.

 

Purpose: Verify that recorded receivables are accurate and collectible.

 

 

 

·       Examine Purchase and Inventory Records

Audit Step: Perform a test of purchases by matching vendor invoices to recorded trade purchases for the period. This includes checking purchase orders and vendor statements.

 

Purpose: To ensure that the cost of goods sold is accurately recorded.

 

External Confirmation: Review inventory valuation and compare against external market price for the material.

 

Purpose: Validate the accuracy of inventory records.

 

3. Explain additional audit procedures would you recommend to understand the underlying reasons behind these variations.

 

·       Trend Analysis and Detailed Fluctuation Analysis

Procedure: Perform a detail comparison of income statement over multiple periods.

 

Purpose: Identify periods where significant changes occurred, such as spikes in revenue, purchases, or expenses, and investigate the reasons for these changes. This helps to increase their sales and profitability that contributed to the variations.

 

Example: If there a large increase in sales that relate to their sales during specific quarter, do promotion, advertise and business expansions.






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