Page 1 of 5 HA3032 AUDITING Assessment Details and Submission Guidelines Trimester T2 2020 Unit Code HA3032 Unit Title Auditing Assessment Type Group Assignment Assessment Title “Developing an Audit...

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Page 1 of 5 HA3032 AUDITING Assessment Details and Submission Guidelines Trimester T2 2020 Unit Code HA3032 Unit Title Auditing Assessment Type Group Assignment Assessment Title “Developing an Audit Program for a selected publically 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 HOLMES INSTITUTE FACULTY OF HIGHER EDUCATION Page 2 of 5 HA3032 AUDITING 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. 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. 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. Detail Assignment Tasks: Developing an Audit Program for a selected listed 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 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 Page 3 of 5 HA3032 AUDITING explain why the selected assertions are applicable to each account. 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. (Assume that a predominantly substantive approach is being adopted) 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, 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% HA3032 Auditing Group Assignment - Marking Rubric HA3032 Auditing Group Assignmen t - Marking Rubric Part Excellent Good Satisfactory Unsatisfactory Key Business Risk Identificatio n (4 marks) Relevant Business Risks have been clearly stated and are appropriate after considered analysis. (80% - 99%) Business Risks are well stated and appropriate to the company selected. (65% - 80%) Business Risks are noted and stated, but they are only generic in nature. (50% - 65%) Business Risks have not been adequately addressed. There is insufficient or irrelevant information noted. (0 - 49%) 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.cpaaustralia.com.au/ http://www.cpaaustralia.com.au/ http://www.cpaaustralia.com.au/ http://www.cpaaustralia.com.au/ http://www.ifrs.org/ http://www.ifrs.org/ Page 4 of 5 HA3032 AUDITING Audit Risk Model (4 marks) The Audit Risk Model has been very well understood and applied. All risk components are correctly stated and the Audit Risk Model has been applied correctly to the company selected. (80% - 99%) The Audit Risk Model has been correctly understood and all the risk components are noted. The analysis is sound, but detail is lacking. (65% - 80%) The Audit Risk Model has been satisfactorily applied, but either some minor mistakes are noted or there is a lack of detail in some areas. (50% - 65%) The Audit Risk Model has not been understood, considered or analysed in the report. There is minimal or no real grasp of the concept or it is missing from the report. (0 - 49%) Analytic al Review (4 marks) The Analytical review has been very well performed and includes three years of ratios. All four key ratios are appropriate and presented in a table with sound commentary. (80% - 99%) The Analytical review has been well performed and includes four key ratios. They are relevant and presented in a table with some good commentary. (65% - 80%) The Analytical review has been satisfactorily performed. Ratios are noted and there is some commentary , but there are some minor errors. (50% - 65%) The Analytical review is sub- standard. There are ratios missing. There is no commentary or it is poorly written. The requirements have not been understood. The analytical review is missing from the report. (0 - 49%) Material Account Balance Identificatio n (10 marks) Materiality has been correctly calculated using an appropriate base with explanation. Five Asset accounts and five Liability accounts have been selected and they are appropriate to the company. This section is presented in a table. (80% - 99%) Materiality has been correctly calculated with some explanation. Five Asset accounts and five Liability accounts have been selected. This section is presented in a table. (65% - 80%) Materiality has been stated with some explanation. Asset accounts and liability accounts have been provided, but some are not material. Some Formatting is noted. (50% - 65%) Materiality has not been calculated and it is missing. Account balances are either
Answered Same DaySep 13, 2021HA3032

Answer To: Page 1 of 5 HA3032 AUDITING Assessment Details and Submission Guidelines Trimester T2 2020 Unit Code...

Sarabjeet answered on Sep 17 2021
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Executive Summary
Considering ASX listed firm from Australia this report is prepared. It concentrates on how to prepare an audit plan for the business. It involves recognition control testing and substantive testing of various accounts balances     moreover transactions. It shows when auditor applies the substantive procedure to the specially assessed risk. It considers a lot of liability and asset account balances moreover is related to their respective claims. The major function of the project is to find out how to choose the most successful and effective c
ombination of the audit procedures to make sure that audit objectives is achieved. Finally, a sampling strategy is included for every material account to be experienced. The above detailed information has been presented in structure of a table because that it can be clearly understood and compared.
Contents
Executive Summary    2
Introduction    4
Discussion and Analysis    4
Relevant financial report assertions    9
Conclusion    19
References    20
Introduction
In the report prepare below, a review plan was proposed for a company listed on Australian Securities Exchange. The company name is CQR Charter Hall Retail Real Estate Investment Trust Real Estate. Charter Hall Retail REIT is handled by CHG. Charter Hall Group is one of Australia's biggest real estate association with more than 29 years of experience, representing agencies, wholesale and private institutions in managing first-class office, industry and logistics , Social and retail infrastructure property investor. Charter Hall Retail Real Estate Investment Trust continued to coordinate its aspirations for sustainable development with Charter Hall Group, moreover adopted Charter Hall Group’s share value framework moreover key areas of ecological innovation, health and place creation. Charter Hall Group uses their real estate expertise to entrance, deploy, handle or invest in equity across core real estate sectors for example real estate, offices, retail, industrial and social, as well as logistics infrastructure. Charter Hall Group carefully operates and planned a diversified portfolio of around 1,200 properties, covering the whole thing from industrial real estate, retail centers or high-end office buildings to our latest investment in learning centers.
Discussion and Analysis
Key Business Risk Identification
The business selected for the analysis was CQR Charter Hall Retail Real Estate Investment Trust Real Estate, which is headquartered in Australia. The business is mainly in the industrial segment and is part of the “equipment industry and "industrial” machinery. The company's operations aim to improve service efficiency and service life throughout its first-class solutions and technologies. The excellent part of the business is that its goal is to reduce its carbon footprint, so it is also conducive to environmental protection and environmental security. It has 3 main departments, namely the service department, the product department and the technical department. The forecast for next few years is positive moreover supported by huge development in the technology sector and inorganic growth.
A few of the business threats faced by the business are follows as:
The business bears credit threat in the type of accounts receivable-it can be in the form of bad credit. The recoverability of debtors' accounts receivable is the main risks. This is because around 60% of its accounts receivable comes from two major consumers; moreover its recoverability also depends on many major judgments, future sales moreover demand Wait. The business also faces liquidity threats and might encounter problems in increasing the essential finances to meet payment moreover other business commitments (Belton, 2017). To this end, the company conducts currency cash flow forecasts. The main business threats are capital management. Therefore, the company's debt level, because some external capital might have impacts on returns on capital, dividends paid to shareholders, etc (Alexander, 2016). In conditions of inventory valuation, commercial risks also exist, because it is usually determined by the nature of inventory, judgments and assumptions, predicted future market demand, and several other uncertain factors (Kew & Stredwick, 2017). The business faces the following risks: whether it has followed suitable accounting policies and the extent to which accounting estimates moreover judgments are reasonable, because they might have impact on the company's overall performance (Whittington, 2015).
Audit Risk Model
After suspicious consideration of company's financial statements, it can also be inferred that there are threats of material misstatement in certain places, such as inventory assessment and debtor's recoverability. These risks can be classified as control threats because these threats can be suspended. And deny proper control measures (Trewavas, Botica Redmayne and Laswad, 2012). In addition, the risk of an entity using appropriate accounting policies becomes a control risk again, just as a company has a strong internal manage mechanism, which can avoid these risks. On the other hand, liquidity risk and capital management risk are inherent in nature of business, so it can be called IR (Alexander, 2016). Applying the review threat model [AR = f(IR, CR, DR)] to a given business, we can see that because the business has better internal control and opportunities for omissions and errors, there are inherent risks and control risks Very low risk is low, so the finding risk is huge, the auditor will have to enhance sampling size moreover adopt other audit procedures to reduce the detection risk (Sharfman, 2012). In this case, the company's overall risk level is low. This will also affect recognition risk, because the auditor requirements to set detection risk at a reasonably high level to minimize the final outcomes (audit risk).
Analytical Review
For financial status statement or financial performance statement of the past three years, the analysis procedure has been completed (Werner, 2017). The similar...
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