Assessment Details and Submission Guidelines MA611 Auditing School Business Course Name Master of Professional Accounting Unit Code MA611 Unit Title Auditing Trimester 1/2021 Assessment Author Dr Mac...

Assessment Cover Sheet

For Assessor Use Only (if not marked on Moodle)

Assessment Task Description

In addition to the Submission Guidelines appearing on page 1, the assignment is to be completed by groups of
FOUR
students. The submission into the

assignment drop box

in Moodle is to made
by ONLY one group member.

This assignment is comprised of three parts (Part 1, Part 2, and Part 3), worth
40 marks.

·
Part 1:Understanding a Client to Plan a Financial Report Audit
, worth 30 marks

·
Part 2:
Risk of Material Misstatement (Inherent Risk) at the Financial Report Level
, worth 6 marks

·
Part 3:

Format and Presentation Quality
, worth 4 marks

The first two parts must be completed and the third part addressed

throughout

the submission.

Pages 1 and 2 of your submission

MUST be the Assessment Cover Sheet, signed by all group members.

The Assessment Cover Sheet is downloadable from the Moodle site, or can be copied and pasted from page 2 of this document.

Part 1:

Understanding a Client to Plan a Financial Report Audit

(30 marks; around 1800 words)

You have recently completed your Master of Professional Accounting Degree at MIT and now working as a graduate auditor for a major accounting firm, Ernie and Youngster (EYS). EYS has just won the tenders for the financial report audits of the following ASX listed companies (as at 1 May 2021).

Your group’s choice of company must be approved by your lecturer such that each group is the only audit team for one of the above, Campus specific, ASX listed companies.

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 for the financial report audit of your new client and in accordance with auditing standards (i.e., ASAs), your audit team (group) is required to 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 audit and fulfil a key responsibility.

Required

For your audit team’s (group’s) chosen client (as approved by your lecturer), address the following six areas.

(6 x 5 marks = 30 marks)

1. 
   General and industry-specific economic trends and conditions
   


2. 
   Competitive environment
   


3. 
   Product, customer and supplier information
   


4. 
   Technological advances and the effect of the internet
   


5. 
   Laws and regulatory requirements.
   


6. 
   Other area
   

Note, to help you address the above areas, see the prescribed textbook, Gay and Simnett, Chapter 5, for specific guidance. Not all the procedures mentioned may be relevant for understanding your client, and there may be “other” questions your audit team considers important to address specific to your client, i.e. addressed under the “Other” area.

Your task is to research your client’s sector and

report

back to your audit team leader. Your report will 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

(6 marks; around 300 words)

Required

From your Understanding of the Client (i.e., Part 1), identify one (1) specific account balance (not account classifications!) that you consider at significant

risk of material misstatement
. For your chosen account balance:

a)

Explain

why the account balance is at significant

risk of material misstatement

(3 marks)

b)

Explain

one, key

assertion

at risk of not being valid (1 mark)

c)

Detail

one (1) relevant

substantive audit procedure

to address the assertion at risk as identified in b) above (1 mark)

d)

Detail

one (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 to Part 2 in the following table format.

To obtain 70 percent or more for this requirement, there must be strong evidence that your responses to this part are based on (i.e., connected) to the results of your Part 1: Understanding a Client to Plan a Financial report Audit.

Part 3:

Risk of fraud at the Financial Report Level

(5 marks; around 250 words)

Your team is about to attend a meeting to discuss the risk of fraud in terms of the auditing standards.

Required:

Prepare an aid memoire for the meeting where you set out the most likely type of fraud to be found in your client organisation. This aid memoire should be supported by two research references.

Part 4:

Format and Presentation Quality

(4 marks)

Required:

As mentioned above, Part 1 should be presented in a ‘report’ format. A key aspect in your audit team’s (group’s) choice of format/layout should be to ensure you impart your key messages
effectively (i.e., complete the requirements)
and
efficiently
(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, page numbering).

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 parts
collaboratively
(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 earn many marks for this part.

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

In terms of

this part

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

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

(ii)
Introduction
that succinctly outlines the main theme (s) and requirements of this part of the assignment (
around 150 to 200 words
),

(iii)
Body
that specifically addresses the requirements of

Part 1 (
around 1800 words
) and

Part 2 (
around 300 words
),

(iv)
Conclusion
that specifically addresses (summarizes) Parts 1 and 2 (
around 100 words
),

(v)
Reference list
containing all cited works and

(iv) Proper English grammar, appearance.

Marking Criteria and Rubric

Assessment criteria (requirements) are shown in the following table.

Marks are allocated as follows:

Using Technology for Assessment

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., quality and quantity) 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 that all reference 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 be strong evidence that your responses to this requirement are based 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: