CASE STUDY ----- Accsys Technologies PLC Example | Topics and Well Written Essays - 1500 words

----- Accsys Technologies PLC - Case Study Example This paper will analyze the financial statements and annual reports of the company and identify three areas of heightened audit risk in the auditing of the company this year. In addition, the paper will explain the reasons for five substantive audit procedures in relation to the areas of heightened audit risk identified. From the annual report of the company, it is evident that there are some areas that require heightened audit risk this year. One of the areas in the company that has heightened audit risk is the operating costs. There was an increase in the operating costs of the company by 11%. While the figure was 13.5 million pounds in 2013, it rose to 15 million pounds in 2014. This resulted from high costs of administration that the organization incurred during the year. Moreover, there were legal costs that resulted from the arbitration process related to the Diamond Wood. The cost of staff also increased by 9% and this was as a result of the increase in head count (ACCSYS TECHNOLGIES 2015). Operating costs is an area of heightened risk audit in this company since they determine whether the costs incurred by the company are being used to cover the relevant expenses. In addition, costs determine whether there is effective management of costs in the organization and ascertain whether there are activities that contribute to the wastage of the company’s resources. For Accsys Technologies PLC, operating costs represent an area of heightened risk since they keep on increasing and might affect the profitability of the company, as well as the initial business plan of the organization. With proper auditing of the costs such as staff costs, the management can make adjustments to the operations of the organization and ensure that the company is in the right track (ACCSYS TECHNOLGIES 2015). Another area of heightened audit risk in the audit of the company this year is