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Learning Outcome 3: Apply the different phases of the audit to practical scenarios, working in teams in some instances
Learning Outcome 4: Evaluate the different audit opinions that could be expressed following the completion of an audit as they apply to different audit scenarios, working in teams in some instances
Objective: The objective of this assignment is to effectively work in teams to formulate and recommend possible solutions in practical scenarios
This assignment comprises three parts working in teams as follows:
Technical Skills (15%): Part 1: Written answers to a research case study involving two companies. Part 2: Written answers to a research question on a current area of concern. Professional Competency Skills (10%):
Part 3: (5%): Team meetings and minutes
Part 4: (5%): Team presentation
You are required to complete the assignment working in teams of 3 – 4 members. You need to obtain your lecturer's approval as to the size and members of your group. Your group presentation will be limited to 10 minutes per group of 3 members (13 minutes for 4 members), and each member of the team must present a part of it demonstrating an understanding of the technical aspects being tested and individual oral presentation skills. A separate mark will be given to each member of the team for presentation skills. Minutes of team meetings must also by maintained and submitted with the assignment.
Please check the marking sheet for each part to ensure that you have followed all the guidelines for presenting your work and are aware of how you can score marks.
The assignment is designed to test the following skills:
Please make sure that you follow the guidelines noted on your assignment and those relating to the presentation of written work, late policy and academic integrity.
PART 1: (40 marks – Assessable value 10 marks)
Review the audited annual reports including financial statements presented to the shareholders in respect of the two companies noted below and answer the questions. Please note that if the web-link fails to open you may need to 'right click' on it and use 'open hyperlink' to access it.
(A) Qantas Ltd: Financial year ended 30 June 2014
(B) Treasury Wine Estates: Financial Year ended 30 June 2014
Questions to be answered by the team or group:
Assume that your team is responsible for planning the audits for both 'Qantas' (year ended 30 June 2014) and 'Treasury Wines Estates' (year ended 30 June 2014) discuss your strategies in relation to the questions noted below –
(A). Identify at least three (3) inherent risks that you would have considered for each company in the audit planning phase and justify your answer
(B). What audit procedures and/or tasks would you have plan to carry out in response to the inherent risks identified by you in (A) above?
(C). Carry out an analytical review on the financial statements of these companies in the planning phase and identify areas of concern (high risk or problem areas) or comfort. Justify your answer – identify at least three (3) points for each company.
(D). What audit procedures and/or tasks would you have planned to carry out in response to the high risks or problem areas identified by you in (C) above? Alternatively, in relation to which area would you have minimised your evidence gathering procedure?
(E). An Independent Auditor's Report to the Members has been issued for each company: (a) Identify the type of audit opinion issued by each auditor, and justify your answer. (b) Do you agree with the type of opinion issued by the auditor? Why or why not? Please indicate an alternative audit opinion if you do not agree with the one issued.
(c) Are there any other matters or events that have taken place after the issue of the audit report that strengthens or weakens the auditor's opinion?
(F). In relation to corporate governance research and justify your answer to the following questions- (a) Do the above companies have any process relating to corporate governance? Under which section of the annual report would you expect to find information on it?
(b) Do the companies have an audit committee and does it have the correct composition? (c) In your opinion, are audit committees of benefit to the auditor, the company, the auditing profession and/or society as a whole?
PART 2: (20 Marks – Assessable Value 5 Marks)
The Australian Securities and Investments Commission (ASIC) released Information Sheet 196 in March 2014 titled 'Audit Quality: the Role of Directors and Audit Committee'. In response to this the Head of Audit Policy at the Institute of Chartered Accountants in Australia and New Zealand welcomed it saying it was 'important in supporting audit committees fulfill their responsibilities in the financial reporting and external audit process.'
In your own words (as a group/team) comment on this statement. Your team commentary should include (but doesn't have to be restricted to) answers to the following: What your team understands by audit quality? Is it important? Do audit committees and directors have an impact on audit committees? How? The report also makes a number of recommendations? Explain whether you think they are necessary, useful or redundant? Is this mandatory or should it be made mandatory? Why or why not? Should the auditing profession be regulated in this manner? Why or why not?
Summary of Marks:
Parts 1 and 2: Written response 15 marks
Part 3 Teamwork (minutes) 5 marks
Part 4 Team presentation 5 marks
A detailed marking sheet relating to requirements 1 and 3 and a marking rubric for requirement 2 is also available and you should check them to ensure that you have followed all the guidelines for presenting your work and are aware of how you can score marks
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The five risks in relation to the planning phases of the companies (Quantas and Treasury Wine Estates) are enumerated hereunder-