COURSEWORK QUESTION
Objective:
To critically evaluate the audit risk assessment process
in real-world companies, allowing students to explore and apply theoretical
concepts to practical scenarios by assessing how auditors identify, evaluate,
and respond to risks.
Instructions:
1.
Company
Selection:
Sinagpore Airlines
2.
Assignment
Structure:
The focus of this assignment is on analyzing the risk assessment
process within the chosen company’s audit. Your report should cover the
following areas:
Section 1: Company Overview
•
Briefly describe Singapore Airlines, its industry, and
market position.
•
Discuss the company’s financial performance over the
past three years, highlighting key financial metrics.
Section 2: Understanding the Company’s Business
and Environment
1.
Analyse the industry in which the company operates and
discuss the potential risks inherent to this industry.
2.
Identify significant external factors (e.g., economic
conditions, regulations) that may impact the company’s financial performance
and reporting.
Section 3: Risk Assessment Process by Auditors
•
Discuss your understanding on the business and identify
key risks.
•
Evaluate the auditor’s application of the International
Standards on Auditing (ISA) 315 (Identifying and Assessing the Risks of
Material Misstatement).
•
Identify the key audit risks (both financial and
non-financial) highlighted in the company’s reports and discuss why these risks
were considered significant.
Section 4: Evaluation of Audit Risks
For each key risk
identified:
⎯
Describe the nature of the risk (e.g., fraud risk, inventory valuation, revenue
recognition, etc.).
⎯
Analyze the potential impact
of the risk on financial statements.
⎯
Discuss the factors that might increase or mitigate this risk (e.g., internal
controls, management behavior).
Section 5: Auditor’s Response to Assessed Risks
•
Explore how the auditors would respond to the
identified risks. What specific audit procedures could be designed to address
each risk?
•
What internal controls, substantive procedures, and any
specific audit evidence could be collected to manage these risks?
Section 6: Impact of Risk Assessment on Audit
Opinion
•
Identify any emphasis of
matter, modifications, or qualifications in the audit opinion
that are directly
related to the identified risks. if no qualification then just say no
qualification.
Section 7: Conclusion and Recommendations
•
Summarize the key findings from your risk assessment
analysis.
•
Provide recommendations on how the company or its
auditors could improve the risk assessment process or mitigate significant
risks more effectively.
Assessment Criteria:
•
Depth of analysis in evaluating the risk
assessment process.
•
Application of auditing theory to the chosen
company.
•
Critical thinking and originality in evaluating
the auditor’s risk responses.
•
Quality of research and use of references.
•
Clarity, structure, and presentation of the
report.