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ASSIGNMENT
BAO3306 AUDITING
Semester 1, 2012
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Overview
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Assignment is worth 20% of the overall assessment for this subject. Due date: Week 10
Length: Maximum word limit 3000 words (including Appendices)
Introduction
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This assignment requires you to form a group of two (2) to develop an audit plan. You must refer to Chapter 6 of the textbook for information relating to audit planning. Your submission for this assignment must not exceed 3000 words in length. You must attach the assessment declaration sheet to the front of your assignment. You must sign and date the assessment declaration sheet. For domestic students, submission should be made as instructed below. Offshore students should follow the instructions of the local lecturer.
You must ensure the clarity of your answer and the overall presentation of your assignment. Presentation includes grammar, spelling and compliance with the word limit. You must complete your assignment in group of two (2).
Submission instruction
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Assignment must be submitted electronically and in hardcopy.
Electronic submission: must be submitted via turnitin located on webct. Anoriginality report is available to students upon submission. Note: turnitin may take up to 24 hours to produce a report. Assignment with originality report level of more than 30%may indicate that the contents have more than 30%in similarity withassignment submitted by other students OR assignment has not been properly referenced. Assignment with originality report level exceeding 30% will be penalised by four (4) marks. Students can re-submit assignment on webct as many times as necessary but the final submission both in electronic and in manual format must be made by the due date.
Hardcopy submission: must be submitted by the due date. A signed declaration formmust be attached to the front of the assignment.
Only one member of the group needs to submit the assignment. Students can submit assignment on Webct until 11:59PM on the due date. Assignments not meeting these requirements will be subjected to a penalty of four (4) marks for poor presentation. An additional penalty of two (2) marks per day will apply for late submission.
Note: Webct will not accept late submission.
Plagiarism
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Plagiarism is defined as presenting someone elses work, including the work of other students, as ones own. Any ideas or materials taken from another source for either written or oral use must be fully acknowledged, unless the information is common knowledge. All students are strongly advised to do the following:
– gotohttp://wcf.vu.edu.au/GovernancePolicy/PDF/POA040915000.PDF
– enter School of Accounting and Finance
– enter Student Resources
– readthe PLAGIARISM POLICY.
Background
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The rationale for BAO3306 Auditing as per Unit of Study Outline is that on completion of this unit students should have a sound understanding of the underlying concepts of auditing and in particular of financial auditing. By adopting a logical, structured approach they should have the capacity to analyse the salient audit issues and apply relevant auditing theories and succinctly communicate their professional, ethical decision.
One of the unit outcomes requires students to be familiar with key tools used by auditors for collecting and evaluating evidence, in both manual and computerised accounting information systems, which will enable them to express an opinion on the fair presentation of financial reports.
To ensure the audit is carried out efficiently and in a timely manner, the auditor develops an audit plan for the conduct and scope of the audit. ASA300.5 states that the auditor shall plan the audit so that the engagement will be performed in an effective manner.
Required
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1. For the purpose of the assignment, you assume the role of an auditor and your firm has recently been appointed as external auditor of an entity. As required by Auditing Standard ASA300, you are preparing an audit plan for the audit of the entitys financial statements.
2. The audit fee is $92,000 and had been communicated to the client in the Engagement Letter.
3. You are required to download the 2011 annual report published by the following entity:
ACRUX (www.acrux.com.au)
4. Using the first four steps in the audit process as prescribed in Chapter 6 (pages 254-255) of the textbook, plan the audit for the entity you have chosen. Since you are required to develop an audit plan for a real life entity, quoting directly from textbook does not meet the objective of the assignment.
5. Your audit plan must include the followings:
1. Executive summary
2. Introduction
3. Audit plan with the following headings:
a. Understanding the entity and its environment
b. Understanding internal control
c. Assessing the risks of material misstatement (for 5 key accounts)
d. Developing responses to assessed risks (for the accounts selected above)
4. Conclusion
5. References
6. Appendices
Additional information
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For the purposes of the assignment, the following auditing standards are relevant:
– ASA210 Terms of Audit Engagements
– ASA220 Quality Control for Audits of Historical Financial Information
– ASA230 Audit Documentation
– ASA250
Consideration of Laws and Regulations in an Audit of a Financial Report
– ASA300 Planning an Audit of a Financial Report
– ASA315 Understanding the Entity and its Environment and Assessing the Risks of Material Misstatement
– ASA320 Materiality and Audit Adjustments
– ASA330 The Auditors Procedures in Response to Assessed Risks
– ASA520 Analytical Procedures
Hints and Tips
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1. You are required to plan the audit using only information that is publicly available. That is, you only use the information that is published by the entity either on its website or printed materials.
2. You must download and use the proforma audit plan on webct.
3. Information on the organisations internal control structure can be obtained by looking at the relevant section in the annual report, materials published on the entity website and comparing them to the Principles of Good Corporate Governance and Best Practice Recommendations published by the ASX Corporate Governance Council.
4. In assessing the risks of material misstatement, you are required to identify five (5) account balances at risk of being materially misstated. You are required to support your selection using the Audit Risk Model.
5. Quoting directly from textbooks and reports will increase the similarity index. Quoting without proper referencing will also increase the similarity index. You are advised to develop your own audit plan.
6. Turnitin has the facility to report on whether your assignment is copied from other sources. Penalty of four (4) marks applies for exceeding the 30% limit. Serious breaches will be reported to the disciplinary panel.
7. Only one student in the group needs to submit the assignment.
8. Word limit applies to the entire assignment except appendices, bibliography and references. Penalty of four (4) marks applies for exceeding the word limit.
9. If you want to remove the previous version of the assignment on turnitin, submit a blank assignment or a new version.
10. Turnitin may take up to 24 hours to generate originality report. Late submission is subjected to a penalty of two (2) marks per day.