Audit Report, Case Study Example

What audit risk factors did the auditor identify? How should these risk factors have affected the audit?

In relation to audit risk factors, the auditor tried to utilize specific data manipulation. Castello in this case specifically instructed the creation of new information that would supersede the reality of the actual reports of the company. This way, the report has been placed into risk of being imbalanced therefore portraying wrong financial data that could jeopardize future accounts especially when it comes to detailing the information for future references.

What audit procedures did the auditor apply? What alternative audit procedures should the auditor have applied?

The auditor specifically used the alternative inventory control method so as to create a diversion from the original financial report at the end of the fiscal year hence creating a new description of the company’s performance. Instead of utilizing the Economic Order Quantity (EOQ), the auditor ought to have utilized the Just in Time Inventory, which specifically provides real time adjustments that provide actual on-time reports instead of the past collected data that could be manipulated through time exchange.

What mistakes did the auditor make?

Using the 1992 and 1993 fiscal report for the payables presentation is a fraudulent approach to the case hence making the auditor responsible for providing questionable report that does not mirror the actual situation of the company in the face of the modern industry that it is currently enjoined with.