Independent Audit Report of Biocon Pharma Company Limited

Presented is the company audit report of Biocon Company Limited. First, there is the exposition of the company's financial statements. It comprises of the statement of profit and loss, the cash flow for the year ended 2016, a summary of important accounting policies, and the balance sheet as at 31at March 2016. For the balance sheet, the fixed assets amounted to $248.59 while the current assets amounted to $1319.78. Altogether, they summed up to $1568.37. For the part of the equities and liabilities, the shareholder's funds which comprised of the capital investment summed up to $41.91, the non-current assets were $1454.4, and the current assets were $36.06.

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Moreover, the report on the profits and loss reflected some honest results as per the expectation of the company management. It was also dated year ended 31 March 2016. The income amounted to $0.25, expenses were $8.49, and the loss before taxation was $8.49. Thirdly, there is the report on the cash flows of the company for the year 2016. The cash flows from the operating activities were $7.66 while the cash flows from investing activities totalled to $1,133.12. The cash flows from financing activities amounted to $1,540.02, and the net increase in cash and cash equivalents were $398.93, the cash and equivalents at the beginning of the year turned out to be $0.50, and finally, the cash and equivalents at the end of the year emerged to be $399.43.

In the audit report, there was the statement of the materiality of the company. Materiality refers to the amount that makes the difference to its users because an audit can never be able to provide a 100% assurance but only a reasonable guarantee. The overstated amounts of the company are considered immaterial (Meyer et al. 2013). For the case of Biocon Company limited, its total revenues amounted to $1, 053. It was the preliminary figure from the continuing operations. Here, the amount of $260.46 was considered material, dictating the materiality of the company. There were some qualitative factors considered in the calculation of the preliminary figure above. They include the industry conditions, misstatements due to illegal acts or fraud, amounts which could affect earnings trends, as well as the values which could lead to an entity missing its forecast. Subsequently, there was the estimation of the likely misstatements as well as the comparison of the total preliminary materiality. The auditor had followed the guideline of assigning a lower level of materiality to each of the account balances while performing the audit procedures.

In the report, analyzed also was the industry under which Biocon operates. It could help the business owners to understand the behavior of the industry to which they operate in. It also helps the planners of the Biocon Company to perfectly position the Biocon business pin the right niche for the commodities and services it offers. The industry and company ratios in the audit report of Biocon Company are as stated below. The activity ratios including inventory turnover helped in measuring the efficiency to which the Company utilizes its assets (Burns, 2018). The inventory turnover of Biocon Company turned out to be 2.6x meaning that the assets employed in the operations resulted in the output of 2.6 times the assets, for the year 2016. The receivable revenues calculated 7.2x, meaning that the receivables were collected 7.2 times for the period or in other words, every 47 days a year. The asset turnover came out to be 0.72x, indicating that the company was able to generate $0.72 in revenue for every $1 asset which is owned by the company.

From the report, there was the analysis of the inherent risks. They refer to the possibility of the misleading information in the accounting statements which result from other things apart from the failure of controls. It came out that such inherent risks can result where there is a complex involvement of financial instruments. There was the audit risk which refers to an error coming out of the 'performance of audit procedures. There was also the analysis of control risks, featured in the audit report. It comprised five major integrated components. They are the risk assessment, control activities, monitoring activities, information and communication, as well as control environment. They affect the efficiency and operations of the Biocon Company limited. They could, therefore, impact on the proper attainment of the company objectives and goals. They include compliance risks and operational risks, covering the requirements of the law and unexpected workplace failures respectively. In such risk assessment aimed were the objectives of such an undertaking, risks themselves, the control activities, process owners, preventive or detective, financial statements, and if they are key or non - key.

Conclusion

Finally, there was the documentation of the permanent file that contains the information to be assessed repeatedly by the auditors in the successive audits performed for the company. They assist the team in the conduction of auditing tasks. The documents contained in such company file are accounting policies, bylaws, charts of accounts, as well as the director list.

References

Burns, P. (2018). New venture creation: A framework for entrepreneurial start-ups.

Meyer, M. B., Wall, J. L., Kriegel, L. D., Mikels, D. J., Nye, M. S., & Iowa. (2013). Guthrie County independent auditor's reports, basic financial statements and supplementary information, schedule of findings, June 30, 2012. Des Moines, Iowa: Office of the State Auditor.