According to ISA 520, analytical procedure means “the
evaluation of financial information through the analysis of
plausible relationships among both financial and non-financial
data. It includes the investigation of identified fluctuations, or
relationships that are inconsistent with other relevant
information, or that differ from expected values by significant
amount”. Corona virus or the COVID19 pandemic has affected most, if
not all, of the business industries not only in Oman but all over
the world. This is due to the imposed “lockdown” of areas affected
by the pandemic to not spread the disease and worsen the situation.
One of the industries that are considered affected by this pandemic
is the Pharmaceutical Industry. Based on the news, pharmaceutical
companies are now worried of drugs shortages as the pandemic
affects many countries. Also, because employees are getting sick or
afraid to contract the virus, only few are able to report to work.
Assume that you are a member of an audit team assigned to analyze
the effects of the corona virus (COVID19) pandemic on businesses.
Answer the following questions related to this business
sector:
Pharmaceutical Industry (example Muscat Pharmacy)
*Required: Answer the following questions on analytical
procedures:
1. In your opinion, will this business sector be favorably or
unfavorably affected by the COVID19 pandemic? Explain your answer
focusing on the financial impact.
2. How could the auditor analyze the financial impact to the
business sector given? Give at least two suitable examples of
analysis that you can use to analyze the impact of the pandemic to
a specific business belonging to the pharmaceutical industry, like
the Muscat Pharmacy.
Question No 5: (5+5=10 Marks)
According to ISA 520, analytical procedure means “the
evaluation of financial information through the analysis of
plausible relationships among both financial and non-financial
data. It includes the investigation of identified fluctuations, or
relationships that are inconsistent with other relevant
information, or that differ from expected values by significant
amount”. Corona virus or the COVID19 pandemic has affected most, if
not all, of the business industries not only in Oman but all over
the world. This is due to the imposed “lockdown” of areas affected
by the pandemic to not spread the disease and worsen the situation.
One of the industries that are considered affected by this pandemic
is the Pharmaceutical Industry. Based on the news, pharmaceutical
companies are now worried of drugs shortages as the pandemic
affects many countries. Also, because employees are getting sick or
afraid to contract the virus, only few are able to report to work.
Assume that you are a member of an audit team assigned to analyze
the effects of the corona virus (COVID19) pandemic on businesses.
Answer the following questions related to this business sector:
Pharmaceutical Industry (example Muscat Pharmacy)
Required: Answer the following questions on analytical
procedures:
1. In your opinion, will this business sector be favorably or
unfavorably affected by the COVID19 pandemic? Explain your answer
focusing on the financial impact.
2. How could the auditor analyze the financial impact to the
business sector given? Give at least two suitable examples of
analysis that you can use to analyze the impact of the pandemic to
a specific business belonging to the pharmaceutical industry, like
the Muscat Pharmacy.
**Auditing Question