Research Topic There has been a sharp increase in the emergence of…

Question Answered step-by-step Research Topic There has been a sharp increase in the emergence of… Research TopicThere has been a sharp increase in the emergence of financial technology firms (also known as FinTech firms) over the past few years. For example, in Australia where low interest rates in 2021 contributed to a ten percent increase in the number of firms operating in the lending, mortgage and buy-now-pay-later category within the sector. Most notably, firms like Afterpay and Zip. The emergence of these firms, associated with new business models, digitalisation and cost pressure, brings on new challenges for auditors. You are part of a team at Joyful Audits, a medium sized audit firm located in Australia, who was recently approached by Zip to conduct their audit for 2022.  Using knowledge developed from independent research and analysis, discuss the following: 1. Provide an overview of Zip and its operating environment (e.g. business model, competitors, relevant regulations)  2. In 2021, Zip reported a loss of $ 678,065,000 and the share price fell from $12.35 to $4.33 between June and December. Discuss how you would assess the going concern risk in relation to Zip.  3. Based on the information provided in answering Question 1 and 2, identify two other key business risks faced by Zip. How do these impact your assessment of inherent risk?  4. In 2021, the largest asset reported by Zip was Receivables with a value of $1,988,036,000. For comparison, Zip reported Receivables of $143,831,709 in 2017. The audit partner also informs you that control risk has been determined as High. Discuss how this impacts your assessment of the risks of material misstatement and the audit strategy that should be implemented.  5. The Partner on your teams has asked for your opinion on whether Zip should be accepted as a client or not. With reference to the previous sections of your report, discuss the relevant factors in making this decision, and provide a recommendation on whether you believe Zip should be accepted as a client or not. Accounting Business Financial Accounting ACCG 308 Share QuestionEmailCopy link Comments (0)