ACCT6006 Auditing Theory and Practice - Assignment 2

Task Summary

Students are required to work in the group with maximum of three members. The assessment is designed to assess the subject learning outcomes above including students’ ability to research audit related issues and apply their knowledge to real cases. Students are expected to develop a professional report addressing tasks within following areas:

1. Inherent risk
2. Audit procedures in response to inherent risks

• Analytical review of the financial statements with the purpose of identifying areas of concernor

1. Substantive audit procedures addressing the identified
2. Audit report, its basis, and legal

The report should include an Executive summary, Introduction, Body (covering all tasks) and Conclusion.

Context:

The case study requires students to work in a group and develop a professional report.

A key aspect in your 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 consider the word limit).

The report should be coherent, and consistency is expected throughout (e.g., formatting, languagestyle, linkages between the parts).

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’).

Referencing

It is essential that you use appropriate APA style for citing and referencing research. Please see more information on referencing: http://library.laureate.net.au/research_skills/referencing

Submission Instructions:

Complete all tasks and submit your answers electronically using the link on BlackBoard under assessments overview and submission. Include the names and student ID numbers of the team members on the assignment cover sheet. Only one version of the assessment is to be submitted on behalf of the group. Please ensure that your submission is in compliance with all of Torrens Policies.

Instructions:

Review the Financial Year 2021 audited annual reports including financial statements presented to the shareholders for the following organisations:

• Australian pharmaceutical Industries Ltd
• The a2 Milk Company Ltd

Assume that your audit team is responsible for planning the audits for both companies for the most recent financial year. Discuss your strategies addressing each of the tasks below:

1. Identify at least three inherent risks that you would have to consider for each company in the audit planning phase and justify your answer. Cite the relevant ASAs/ISAs to support your (10 Marks)

2. Which audit procedures and/or tasks would you have planned to carry out in response to the inherent risks identified above? Cite the relevant ASAs/ISAs to support your

(12 Marks)

3. Carry out an analytical review on the financial statements of these companies in the planning phase and identify areas of concern (high risk, problem areas) or comfort. Identify at least three areas for each company and justify your (10 Marks)

4. Which audit procedures and/or tasks would you have planned to carry out in response to the high risks or problem areas identified above? Alternatively, in relation to which area would you have minimised your evidence gathering procedure? (10 Marks)

5. Discuss ethical and legal responsibilities/liabilities of the auditors in case they would have givenan inappropriate audit Discuss safeguards available to the auditors. (6 Marks)

Effective communication, Presentation quality and peer review           (6 Marks + 3 Marks + 3 Marks)

The report should be expertly presented, persuasive, logical communication, coherent and consistency is expected throughout (e.g., formatting, language style, and linkages between the parts).

Each group member is required to assess other members based on collaboration and contribution towards the assessment tasks. Please include the peer review commentary at the end of your assessment after the conclusion section. Peer review marks must be allocated in line withthe learning rubric placed at the end of the assessment brief.