Assessment Details and Submission Guidelines MA611Auditing School Business Course Name Bachelor of Business Unit Code MA611 Unit Title Auditing Trimester 1/2020 Assessment Author Dr Mac Wright...

Assessment TaskDescription

In addition to the Submission Guidelines appearing on page 1, the assignment is to be completedby groups ofFOURstudents. The submission into theMelbourne or Sydney Campus specific assignment drop boxin Moodle is to madeby ONLY one group member.

This assignment is comprised ofthree parts (Part 1,Part 2, and Part 3), worth40marks.

•Part 1:Understanding a Client to Plan a Financial Report Audit, worth 30marks•Part 2:Risk of Material Misstatement (Inherent Risk) at the Financial Report Level, worth 6marks•Part 3:Format and Presentation Quality, worth 4marks

The firsttwopartsmust be completed and thethirdpart addressedthroughoutthe submission.

Pages 1 and 2 of your submissionMUST be the Assessment Cover Sheet, signed by all group members.The Assessment Cover Sheet is downloadable from the Moodle site, or can be copied andpasted from pages 6 and 7 of this document.

Part 1:Understanding a Client to Plan a Financial Report Audit

(30marks;around1800words)

You have recently completed your Bachelor of Business Degree – Accounting Stream at MIT and now working as a graduate auditor for a major accounting firm,Ernie and Youngster (EYS).EYShas just won the tenders for the financial report audits of the following ASX listedtop 500companies(as at 1 May2019).

Yourgroup’schoice of company must beapprovedby your lecturer such that each group is the only audit team for one of theabove, Campus specific,ASXlistedcompanies.

Having formed the audit team (i.e., assignment group), and assigned to the financial report audit of one of the above clients, (by your lecturer), your primary task is as follows.

As a part of the risk assessment phase forthe financial report audit ofyournewclient and in accordance with auditing standards (i.e., ASAs), your audit team (group)is requiredto gain an understanding of the structure and the business environment. By understanding the client’s business, the audit team can identify potential risks that may have a significant effect on the financial report. This will assist the audit team to complete the financial report auditand fulfil a key responsibility.

Required

For your audit team’s (group’s) chosen client (as approved byyourlecturer), address the followingsixareas.

(6x 5 marks =30marks)

1.General and industry-specific economic trends and conditions2.Competitive environment3.Product, customerand supplierinformation4.Technological advances and the effect of the internet5.Laws and regulatory requirements.6.Other area

Note, to help you address the above areas, see the prescribed textbook (Moroney et al, Chapter 3, Case Study – Cloud 9 forspecificquestions.Not allthosequestions may be relevant for understanding your client, andtheremay be “other” questions your audit team considers important toaddressspecificto your client, i.e.addressedunder the “Other” area.

Your task is to research your client’s sector andreportback to your audit team leader. Yourreportwill form part of the overall understanding of client’s structure and its environment, which will help you plan for the financial report audit of this client.

You should concentrate your research on providing findings from those areas that have a financial reporting impact and are considered probable given your client’s operations. In conducting your research, you should consider the following key market forces, as they relate to your client’s operations.

Part 2:Risk of Material Misstatement (Inherent Risk) at the Financial Report Level

(6marks; around300 words)

Fromyour Understanding of the Client (i.e., Part 1), identifyone(1) specific account balance(not account classifications!) that you consider at significantrisk of material misstatement. Foryour chosen account balance:

a) Explainwhy the account balance is at significantrisk of material misstatement(3 marks)

b) Explainone,keyassertionat risk of not being valid(1 mark)

c) Detailone (1) relevantsubstantive audit procedureto address the assertion at risk as identified in b) above (1 mark)

d) Detailone (1) relevant practical internal control that would mitigate the risk in relation to the assertion at risk as identified in b) above. (1 mark)

(3 + 1 + 1 +1 = 6 marks)

You MUST provide your answers toPart 2in the following table format.

To obtain 70 percent or more for this requirement, there must bestrong evidencethat your responses to thispartarebased on (i.e., connected)to the results of your Part 1: Understanding a Client to Plan a Financial report Audit.

Part 3: Format and Presentation Quality

(4marks)

As mentioned above, Part 1should be presented in a ‘report’ format.

A key aspect in youraudit team’s (group’s)choice of format/layout should be to ensure you impart your key messageseffectively (i.e., complete the requirements)andefficiently(i.e.,it should be succinct and take into account the word limit).

As per the Submission Guidelines on page 1, the report also should be coherent, and so consistency is expected throughout (e.g., formatting, language style, linkages between the parts,pagenumbering).

Note, groups who split up the requirements and work independently are likely to have more difficulty accomplishing this objective compared to groups who work on each of the partscollaboratively(i.e., as an ‘audit team’). An assignment that has been put together last minute will be obvious to the marker and, therefore, will not earnmany marks for this part.

Make sure all pages are numbered, and the text fits within the margins of your pages. Start each part on anew pageand start each requirement of a part on anew page, making sure to include the relevant heading.

In terms ofthis part(worth 4marks out of 40 marks), your ‘report’for this part must have a/an;

(i)​Executive Summary(around 100to 150words– not included in word count),

(ii)​Introductionthat succinctly outlines the main theme (s) and requirements of this part of the assignment (around150 to200 words),

(iii)​Bodythat specifically addresses the requirements of

Part 1 (around1800 words)and

Part 2 (around 300 words),

(iv)​Conclusionthat specifically addresses(summarizes)Parts1and 2(around 100words),

(v)​Referencelistcontaining all cited works and

(iv)​Proper English grammar, appearance.

MarkingCriteria andRubric

Marking Rubric

The following details the marking criteria that will be used to assess how you have addressed the four assignment requirements.

For Requirements 1 and 2;

Note, to obtain 70 percent or more for either of these two requirements, there must be evidence of ‘material’ (i.e.,qualityandquantity) research. By research, this includes finding information about the company and its industry / business from reputable sources / websites (e.g., the company’s own website, IBIS (see library), the ASX, (financial) newspapers and academic/professional journal articles, as available from the library’s databases, etc. Therefore, and as per the submission guidelines (on the cover sheet to this assessment task document), it is important thatallreference sources / websites used are cited in the text of your report and listed appropriately at the end of the report in a reference list using APA referencing style.

For Requirement 3;

To obtain 70 percent or more for this requirement, there must bestrong evidencethat your responses to this requirement arebased on (i.e., connected)to the results of your analytical procedures and assessment of inherent risk at the financial report level (i.e., Requirements 1 and 2).

Marker’s overall comments/feedback

For Assessor Use Only (if not marked on Moodle)

* For Part 1

To obtain 70 percent or more forthis requirement, there must be evidence of ‘material’ (i.e.,qualityandquantity) research. Therefore, and as per the submission guidelines (on the cover sheet to this assessment task document), it is important thatallreference sources used are cited in the text of your report and listed appropriately at the end of the report in a reference list using APA referencing style.

** For Part 2

To obtain 70 percent or more for this requirement, there must bestrong evidencethat your responses to thispartarebased on (i.e., connected)to the results of your Part 1: Understanding a Client to Plan a Financial report Audit.