Question

Amazon! Prepare a memo to be reviewed by the chief financial officer (CFO) that summarizes the audit process.

What would you say??

1. Explain any sampling or other audit work that could be done, and if you would recommend the company pursue this additional work. Justify your response. 2. Make recommendations to the CFO on how to mitigate potential risk factors for major business transactions identified in the audit report. B. Assume you are now the CFO. Prepare a memo to the Board of Directors as to what potential issues the external audit team might find and what the company’s response should be. 1. Evaluate the findings from the audit report. Be sure to view these findings from the CFO’s point of view.

2. Develop a strategy to mitigate risks identified in the audit report. 3. Describe how the company might implement the strategy based on the findings from the audit report.

Answer 1

MEMO 1

FROM : NAME

TO : UPPER MANAGEMENT AMAZON Ltd

DATE : XX / XX / XXXX

1.Recommendatlon Of Audit Technique:

I might want to prescribe the administration of the Amazon to consolidate new systems for review. One of it could be Audit Sampling. "Review Sampling can be characterized as' Application of review methods to under 100% of Items inside a population of review pertinence to such an extent that all testing units have a shot of determination so as to give the inspector a sensible premise on which to reach inferences about the whole population".

It will be exceptionally useful since it will be uneconomical and impracticable to test 100% of things inside a populace. Additionally helps in acquiring least measure of review confirm which will be adequate and suitable. There were such huge numbers of systems to take after review inspecting. Maybe a couple of them are erratic testing, Stratified Sampling, Systematic Sampling and Block inspecting. So it will be reasonable for the organization to take after this procedure which will spares a ton of time alongside increasing adequate and fitting review confirm.

2. Recommendations to the CFO on mitigate potential risk factors :

It is prescribed to CFO of the organization to distinguish the inside controls inside organization, fortify them and confirm them whether they are in accordance with business necessities.

As saw amid the review, the majority of the business exchanges entered with outsiders were not having appropriate understandings and records to check the validness of the exchanges. This is because of absence of legitimate survey framework for those business exchanges. No other individual was there to audit and oversee the work done by the staff. In the event that this proceeds with, more troubles will be looked by the organization from the outside reviewers which will results in capabilities in review report.

So it will better to make a move as right on time as conceivable to recognize whether legitimate inward controls exist. On the off chance that yes, at that point check whether they were in accordance with business prerequisites. Assuming no at that point put legitimate interior controls and surveys them routinely to meet the business necessities.

MEMO 2

FROM : CFO

TO : BOARD OF DIRECTORS

DATE : XX / XX / XXXX

1.Evaluate the findings from the audit report:

There were some key discoveries in our review report which will be useful to determine them or set up an activity plan before the outer review begins. Some the key discoveries are as per the following:

• No appropriate assertions and records for the business exchanges entered with outsiders.
• Enormous duty obligation may come as notice from Income Tax Department as a result of no appropriate solicitations for the costs asserted by the organization.
• Change in acknowledgment of income from 2018 onwards according to IFRS 15 prompting diminishes in income for the following year.

2. Strategies for mitigation of risks:

For the previously mentioned dangers looking by the organization, the accompanying are the methodologies to be actualized:

• There is a need to fortify and put appropriate inward controls over the documentation part of business exchanges entered by the organization.
• Need to gather the solicitations from the providers and organize them in like manner.
• Appropriate data and information ought to be given in the yearly report about the intense change in income of the organization.

3. Instructions to Implement the above talked about methodologies:

It is essential to set up an activity plan for the above talked about methodologies so the vast majority of the issues can be understood before the outer review begins.

• Will go into an agreement with any firm of sanctioned bookkeepers for setting compelling interior controls over the documentation of business exchanges entered by the organization.
• Will procure couple of workers on an agreement premise to recognize all the missing conjures for the costs guaranteed by the organization. And after that they will do subsequent meet-ups for those solicitations and organizing them legitimately according to the necessities.
• Will have an exchange on the impacts of execution of IFRS 15 with the outside examiners of the organization.
• Likewise will take recommendations from them keeping in mind the end goal to conquer the challenges look by the organization from the investors.
• One of the cure will be appropriate exposure of data in the yearly report which ought to be neat and identifiable.​

CFO

XXXX.