THE HALFORDS GROUP PLC

The Halfords Group plc



The Halfords Group plc

Introduction

Halfords is a retail store for car parts, cycles and accessories. The products of the company includes parts of car, tools, workshops, equipments for the body repair, products that rae used for cleaning purpose, products that are used for the internal and the external styling of car,system of navigations, alloy wheels, roof boxes, car seats for childs, and equipments that are used for the outdoor leisure equipment There are various brands through which Halfords offers its productsfor instance Trax, Appolo, Escape, Retail and Actocentres, Voodoo, exodus, Carerra.

There are two segments through which the business of Halford is operated namely Autocentres and Retail. There are approximately four hundred and sixty seven stores across the country (United Kingdom) and also the republic of Ireland. The headquarter of the company is located in the Redditch, Worcestershire and United Kingdom.

Task 1

Out of the various approaches to auditing, risk-based approach is one in which the available resources are intended for such ares of the financial statements in which resources are directed to those areas of financial statements which are identified to be more risky as a result of the risk faced by the organization. ISA 315 needs auditors in order to make the assessments for the risk involved in the misstatement of the material in the balance sheet or income statement which must be based on the accurate and thre appropriate understanding of the business and also ints environment that includes the internal control.(ISA 315)

According to the IAASB glossary of the terms, audit risk is the risk that is being expressed by the auditor as an inaccurate an dinapproperiate opinion of auditor when the statements for the financial performance fo the business are misstated. Audit risk is basically the misstatement of the financial statement that is being used to detect the risk.

(IAASB Glossary of Terms)

The model of the audit risk is divided into three main components.

Inherent risk

Inherent risk is the carelessness and the defenselessness of an assertion about the trasaction for instance the account balance, or the revelation for the misstated that can be the material, either individually or the aggregation of the misstatement before considering the controls related to the misstatement of the financial performance. (ISA 200) e.g. where the nature of the item is such as a provision which is an estimate.

Control risk

This is the risk for instace the occurrence of the transaction, disclosure of the account balance, and also the material misstatement ot the aggregation of the misstatement that will not be prevented, corrected and also cannot be detected on the and corrected, on a timely basis, by the internal control system of the business entity.(ISA 200) e.g. improper arrangements at the warehouse makes the value of inventory susceptible.

Detection risk

The risk that is involved by the steps that are being taken by the auditor of the risk inorder to accept the detection of the misstatement that is being existed and also that can be a material either individually ...