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  • Inherent Risk: Planning Materiality Level

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    Gol Linhas Aereas Intelligencies S.A. is an airline company that faces several inherent and control risks due to factors like price fluctuations, inflation, economic conditions, liquidity issues, and regulatory changes. As an airline, it is also subject to technical problems, accidents, and highly competitive pressures. However, the company's profit before tax of R$70,996 million means the materiality level for the audit is low, set at 5% of pre-tax profits or R$3,549 million. Key accounts like leases and expenses will be audited through procedures such as inspection, confirmation, recalculation, and reperformance of calculations.

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    Audit project

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    Financial audit

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    Gol Linhas Aereas Intelligencies S.A. is an airline company that faces several inherent and control risks due to factors like price fluctuations, inflation, economic conditions, liquidity issues, and regulatory changes. As an airline, it is also subject to technical problems, accidents, and highly competitive pressures. However, the company's profit before tax of R$70,996 million means the materiality level for the audit is low, set at 5% of pre-tax profits or R$3,549 million. Key accounts like leases and expenses will be audited through procedures such as inspection, confirmation, recalculation, and reperformance of calculations.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    7 views1 page

    Inherent Risk: Planning Materiality Level

    Uploaded by

    Kid & Baby Gallery TCL
    Gol Linhas Aereas Intelligencies S.A. is an airline company that faces several inherent and control risks due to factors like price fluctuations, inflation, economic conditions, liquidity issues, and regulatory changes. As an airline, it is also subject to technical problems, accidents, and highly competitive pressures. However, the company's profit before tax of R$70,996 million means the materiality level for the audit is low, set at 5% of pre-tax profits or R$3,549 million. Key accounts like leases and expenses will be audited through procedures such as inspection, confirmation, recalculation, and reperformance of calculations.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 1

    GOL LINHAS AEREAS INTELIGENCIES S.

    A
    PLANNING MATERIALITY LEVEL
    Inherent Risk High
    INHERENT RISK
    Price & Foreign Currency Fluctuations Control Risk Medium
    Inflation --> Increase Interest Rate
    RMM High
    Unfavorable Economic Condition
    Liquidity of Capital & Lending Market Detection Risk Low
    Recurring Expenses & More Fixed Costs
    Rely on One Manufacturer Acceptable Audit Risk Low
    Changes in Regulatory Framework
    Downgrading of Credit Ratings Materiality level Low
    Technical & Operational Problems
    Highly Competitive Environment
    Volatility & Illiquidity of Securities Market BENCHMARK
    Holders of ADSs May Be Unable To Exercise Airline company→ Profit oriented entities →
    Preemptive Rights →5%
    Profit before Tax

    CONTROL RISK Dollar amount →R$ 3,549


    Complex Systems, Technology, Operational *Notes: Profit before Tax (70,996)
    System Inedequency, Interruption
    Air Traffic, Airport Congestion, AUDIT PROCEDURE
    Adverse Weather Conditions, Delays
    Lease Account Expense Account
    Accident
    - Completeness - Occurrence
    Power of Controlling Shareholder
    - Existence - Accuracy
    DETECTION RISK - Valuation/Allocation
    - Cut-off
    - Classification
    - Cut-off
    Due to its inherent limitations, internal
    - Right & Obligation
    control over financial reporting may not
    prevent or detect misstatements.

    AUDIT EVIDENCE
    KEY ACCOUNTS
    Lease Account Expense Account
    - Inspection - Inspection
    - Confirmation - Confirmation
    - Recalculation - Recalculation
    -Reperform

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