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Page 1 of 5 HA3032 AUDITING - GROUP ASSIGNMENT – T1, 2021 HOLMES INSTITUTE FACULTY OF HIGHER EDUCATION Assessment Details and Submission Guidelines Trimester T1 2021 Unit Code HA3032 Unit Title Auditing Assessment Type Group Assignment Assessment Title “Developing an Audit Program for a selected publicly listed Company” Purpose of the assessment (with ULO Mapping) Students are required to: 1.1- Identify and distinguish between tests of controls, substantive tests of transactions and substantive tests of balances. 1.2- Identify and understand when the auditor will undertake substantive audit procedures in response to specific assessed risks of material misstatement. 1.3- Understand how assertions relate to account balances 1.4- Understand how to select the most efficient and effective combination of audit procedures that allows them to achieve the audit objective 1.5– Active participation in an “audit team context” with professional group discussions The following Unit Learning Outcomes are applicable: 1. Demonstrate a thorough understanding of the reporting requirements of auditing standards relating to auditors’ reports. 2. Explain how the audit planning process directs the auditor to obtain adequate evidence to support audit findings and address the importance of materiality in an audit; 3. Explain the process of audit planning to determine risk assessments and an overall audit strategy; 4. Explain the auditors’ obligations with regards to understanding the client’s business and internal controls, and assessing business risks. 5. Achieve a high level of competence in applying prescribed auditing techniques in gathering evidence to satisfy audit assertions. Weight 40% of the total assessment Total Marks 40 Marks Word limit Maximum 3,000 – 3,500 words Due Date Week 10 Page 2 of 5 HA3032 AUDITING - GROUP ASSIGNMENT – T1, 2021 Guidelines on Submission • All work must be submitted on Blackboard by the due date along with a completed Holmes Institute Assignment Cover Page. • The assignment must be in MS Word format, single spacing, 12-pt Arial font and 2 cm margins on all four sides of your page with appropriate section headings and page numbers. • Reference sources must be cited in the text of the report, and listed appropriately at the end in a reference list using Harvard referencing style. Adapted Harvard Referencing Holmes has now implemented a revised Harvard approach to referencing: 1. Reference sources in assignments are limited to sources which provide full text access to the source’s content for lecturers and markers. 2. The Reference list should be located on a separate page at the end of the essay and titled: References. 3. It should include the details of all the in-text citations, arranged alphabetically A-Z by author surname. In addition, it MUST include a hyperlink to the full text of the cited reference source. For example; P Hawking, B McCarthy, A Stein (2004), Second Wave ERP Education, Journal of Information Systems Education, Fall, http://jise.org/Volume15/n3/JISEv15n3p327.pdf 4. All assignments will require additional in-text reference details which will consist of the surname of the author/authors or name of the authoring body, year of publication, page number of contents, paragraph where the content can be found. For example; “The company decided to implement an enterprise wide data warehouse business intelligence strategies (Hawking et al, 2004, p3(4)).” Non - Adherence to Referencing Guidelines Where students do not follow the above guidelines: 1. Students who submit assignments which do not comply with the guidelines may be required to resubmit their assignments or incur penalties for inadequate referencing. 2. Late penalties will apply per day after a student or group has been notified of a resubmission requirements. • Students whose citations are fake will be reported for academic misconduct http://jise.org/Volume15/n3/JISEv15n3p327.pdf Page 3 of 5 HA3032 AUDITING - GROUP ASSIGNMENT – T1, 2021 HA3032 Auditing – Group Assignment Specifications Purpose: The aim of this group assignment is to provide you with an opportunity to design a “risk- based” audit program for a real-world company and focus on the “Substantive tests of balances”, which involves substantiating the ending balance of an account(s), which is comprised of multiple transactions, as at a certain year-end date. Students are also required to research the applicable accounting and auditing standards depending on the material account balances selected. Assignment Requirements and Structure 1. Students are required to form groups of 4 students group members by completing the “HA3032 Group Form details”. 2. Each group of students group have been provided by unit coordinator, a unique ASX listed company to use for progressive analysis in this group assignment. 3. Prepare a detailed audit program Report [3,000-3500 words] for the client/company in a group of 4 students. Students must use a Report Format with an Executive Summary and Table of Contents. 4. Use publicly available online resources for research purposes, such as: The Accounting and Auditing standards, which are available from government-based websites. *Note: Students are required to form and self-enrol into groups – a maximum of 4 students per group. You will not be able to submit your group assignment unless you are OFFICIALLY enrolled into a designated group in Blackboard (even if it is a solo-group of 1). Submit the group assignment as a single document, including the Holmes official COVER SHEET. Once formed, the group membership should not be changed for the duration of the trimester. For help with any group assignment matters, please address your email to
[email protected] ensuring that your full details (Name, student ID, unit name and number) are included. Detail Assignment Tasks: Developing an Audit Program for a listed ASX Company 1. Gain an understanding of the nature of the entity and its industry and then identify key business risks. After this is completed, assess where the risks of material mis- statements could be in the financial report. Consider the factors affecting both Inherent Risk and Control Risk. Finally, apply the Audit Risk Model [AR = f (IR, CR, DR)] to the selected company. Which risk rating would you apply (Low, Medium or High) to the company’s inherent risk assessment and control risk assessment? How does this affect your assessment of Detection Risk and Audit Risk? 2. Perform analytical procedures of the Statement of Financial Position and of Financial Performance over the last three years using appropriate ratios and/or metrics. Select four key ratios and provide a brief explanation in the report. This should be presented in a table format. 3. Discuss with your group members which account balances are considered “material”. Explain how you calculated materiality for planning purposes and provide appropriate justification for your decision-making. (Note - Use a table format to structure your answers to questions 4, 5, 6, 7 & 8) 4. Select up to ten different material account balances, at least five assets and five liabilities. 5. For each material account balance selected, list the relevant financial report assertions and explain why the selected assertions are applicable to each account. mailto:
[email protected] Page 4 of 5 HA3032 AUDITING - GROUP ASSIGNMENT – T1, 2021 6. Design a comprehensive set of audit work steps for each material account balance, which addresses the selected assertions and which will result in sufficient and appropriate audit evidence being collected for your selected client company. (Note - Assume that a predominantly substantive approach is being adopted). Consider which standards are appropriate. 7. Include a sampling plan, which details how you will use sampling for each material account balance to be tested. How many items will be tested for each test? 8. Refer to some or all of the following websites for further information and research processes: http://www.auasb.gov.au/Home, http://www.asic.gov.au/, www.cpaaustralia.com.au, http://www.ifrs.org, 9. Holmes Online Resources Holmes has also provided students with an online resources hub. Students can use the following link to access the Holmes Open Education Resources Web Site: https://www.studyresources.holmes.edu.au/ Group Assignment Report - Marking Criteria Weighting % Key Business Risk Identification 4 10% Audit Risk Model – Assessment of Inherent Risk, Control Risk, Detection Risk 4 10% Analytical Review of the selected company, including ratio analysis in a table 4 10% Material Account Balance Identification (Minimum 5 x Assets and 5 x Liabilities) 10 25% Assertions identified – Correct Assertions are stated and explanations are noted 4 10% Audit Program – Audit work steps / procedures are clearly stated and listed. 10 25% Sampling Plan for each material account balance with samples sizes. 4 10% Weight 40 Marks 100% http://www.auasb.gov.au/Home http://www.auasb.gov.au/Home http://www.auasb.gov.au/Home http://www.auasb.gov.au/Home http://www.asic.gov.au/ http://www.asic.gov.au/ http://www.asic.gov.au/ http://www.asic.gov.au/ http://www.asic.gov.au/ http://www.asic.gov.au/ http://www.cpaaustralia.com.au/ http://www.cpaaustralia.com.au/