A crucial role is played by risk in the field of auditing. This paper focused on outlining and describing the concept of market policy and company background operating across the emerging market platform. The key reference of some key guidance of auditing providing evidence to enlighten awareness of audit risks. With key focus on the company of Lend Lease, this paper will identify two types of risk for the company that are control risks and inherent risks. The key notion of this paper is that effective procedures play a crucial role in strengthening the external and internal improvement of Land Lease by the establishment of core requirements for the strategies of audit risk.
Holding the equal considerations of other, either a fall in the level of inherence risk that is judged by the auditor for being appropriate in the disclosure, class of transactions or account balance, or there can be a fall in the value of misstatement within the disclosure, class or balance that the auditor considers as material. This tends to hold the requirement for auditors to be performing audit procedures more effectively, closer to the end of the year, or increasing the level of specific procedures of auditing. This is further affected by the factors that there is some chance that the auditor will be selecting an inappropriate procedure of auditing, misapplying the appropriate procedure of auditing, or misinterpreting the results of audit (Earley and Phillips 2008).
Competition in the market
Other factors are inclusive of appropriate planning, accurate assignment of employees to the team of engagement, the application of skepticism in profession, and providing supervision. There is also a significant need involved for reviewing the performance of audit work, and conduct and supervision of the audit practice of Lend Lease will be considered as per the appropriate standards of quality control. The company is also at the risk for disaggregation of inherent risk as extra components for testing detail of risks and risks related to substantive analytical procedures. Hence, it can be stated that there is huge significance of substantive procedures of auditing as well, while response is given to misstatement of material.
Auditing Procedures for Account Balance Verification
For the verification of account balances, two different approaches are considered by Lend Lease that are substantive procedures approach and systems based approach. Also known as the direct verification approach or vouching approach, the substantive procedures approaches, there is key target on resources of auditing to test large volumes of account balances and transaction without any specific focus areas that are specified in financial statements. On the other hand, the systems- based approach holds the requirement of auditors for assessing the effectiveness underlying the internal control of Lend Lease Limited, and then directing primary substantive procedures with there is consideration of several factors (Muniandy 2007). There is conducting of reduced testing among the areas where there is consideration for meeting objectives of the system. In addition, the auditor focuses on considering audit risk, while there is a determination of materiality level for the statements of finance taken up on the whole. There is a determination about the nature and extent of procedures for risk assessment, while further ahead there is an assessment and identification of risks related to misstatement of material. There is also focus on the need to determine the extent, timing and nature of further procedures of auditing. There is significant evaluation if on the whole, the statements of finance have been involved in fair presentation, in each and every materialistic respect, while conforming with the general acceptance about the principles of accounting.