ACB3620/ACC3600/ACF3600 Auditing and assurance

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ACB3620/ACC3600/ACF3600 Auditing and assurance

Due Date 11:55pm Sunday of Week 12

AUDIT REPORT

Purpose

Conversations with audit partners and audit managers from the Big 4 accounting firms suggest audit reports cover several important audit tasks junior auditors will perform in the first three years of their career. This assessment provides you with a unique opportunity to apply your auditing knowledge to a real company, using working papers with appropriate indexing and referencing, to document and demonstrate the skills required to deliver high-quality audits. In particular, you will go through the whole audit process and practise key audit tasks, including assessing the level of audit risks and fraud risk, determining the level of planning materiality, identifying a risky account and its key assertion, conducting analytical procedure and visualisation, and forming the appropriate audit opinion. By completing this assessment, you will demonstrate the skills and knowledge required to deliver high-quality audits, including but not limited to critical thinking, professional judgments, audit analytics, evidence interpretation, and documentation. In addition, you will demonstrate knowledge of the decisions and judgments an auditor has to make during the audit process.

Upon successful completion of this assessment students will be able to:

● LO3 design appropriate audit strategies and procedures using the assurance framework.

● LO4 assess the appropriateness of evidence gathered and conclusions reached using professional judgement and reliable source frameworks.

● LO5 examine the auditor's role in identifying and reporting frauds and errors in financial statement audits.

Upon successful completion of this assessment students will be able to demonstrate the following Business School competencies:

● Critical thinking and problem solving

● Research skills

● Communication skills

● Discipline knowledge & skills

Your task

For this individual assessment, students are required to select one company from a list provided and work on several audit tasks, including assessing the level of audit risks and fraud risk, determining the level of planning materiality, identifying one risky account and its key assertion, conducting one analytical procedure and visualisation based on the data provided, and forming the appropriate audit opinion.

All audit tasks must be documented in working papers with appropriate indexing and referencing.

Value

25% of your total marks for the unit

Word Limit

1700 with 10% allowance (not including references and tables)

Due Date

End of Week 12 Sunday 11:55 pm Australian Eastern Standard Time (AEST)

Submission

● Word or PDF document via Moodle Assignment Submission. No cover sheet required.

● Turnitin will be used for similarity checking of all submissions.

Assessment Criteria

Demonstate the ability to:

● Construct relevant and logical audit risk arguments based on analyses and evidence.

● Construct relevant and logical fraud risk arguments based on analyses and evidence.

● Determine planning materiality based on clear and appropriate research and analyses.

● Identify the key audit matter clearly based on logical and relevant research and analyses.

● Identify a risky account and its key assertion at risk based on logical and relevant research and analyses.

● Conduct relevant and meaningful visualisation and analytical procedure with clear and logical arguments and justifications.

● Determine audit opinion based on logical and relevant arguments connected to research and analyses in other parts.

For more details on the marking criteria please go to the Assessment 3 Rubric on the assessment page in Moodle.

Late Penalties

● 10% deduction per calendar day or part thereof for up to one week

● Submissions more than 7 calendar days after the due date will receive a mark of zero (0) and no assessment feedback will be provided.

Support Resources

See Moodle Assessment page

Feedback

Feedback will be provided on student work via:

general cohort performance

specific student feedback ten working days post submission

INSTRUCTIONS and GUIDE

1.   Choose one company from the list provided below:

a.   Alphabet. (NASDAQ: GOOGL)

b.   CSL Ltd. (ASE: CSL)

c.    Taiwan Semiconductor Manufacturing Co., Ltd. (NYSE: TSM / TSE: 2330)

2.   Assume that you are an auditor assigned to the statutory audit of 2023 Annual Report for the company you choose and complete the following tasks:

a.   Assess the level of audit risk.

b.   Assess the level of fraud risk.

c.    Determine the level of planning materiality.

d.    Identify and justify one key audit matter.

e.    Identify and justify one key account and its key assertion at risk of material misstatement.

f.    Conduct one analytical procedure and one visualisation based on the data provided.

g.    Determine your audit opinion for the 2023 audit.

3.   Search for related news, browse websites, read previous financial reports, read reports by journalists and analysts, collect information from multiple sources, and conduct suitable analyses.

HINT: The 2023 annual report may or may not be available when doing this assessment. If not available, please do the required analyses based on the most recent financial and non-financial information. If available, you can do the required analyses based on 2023 numbers but please note your report should be based on your own work and doesn’t need to follow the audit reports.

4.   You need to support your decisions by your own analysis and evidence collected. Both financial information and non-financial information are important.

5.   A summary, introduction or conclusion is not necessary. Please make sure that you complete the tasks denoted above within the specified word limits.

6.   No restriction on your style. However, the report has to be in an appropriate format and written well (i.e., logical as well as minimal grammar and syntax issues). Clear presentation and communication are expected.

7.   Do not copy and paste from the financial reports or audit reports or from the academic and professional references. Your answers must be in your own words. Turnitin will be used to detect plagiarism, which  will be dealt seriously with mark penalisation. Where direct quotes are used to support your answer, please provide in-text references as well as a reference list.

Suggested Structure

Please use headings and make sure that your report covers all the requirements. Introduction and conclusion are not required.

1. Assess audit risk: Assuming control risk is medium, assess the level of inherent risk and thus audit risk. Your assessment should be supported with your analyses and evidence collected.

2. Assess fraud risk: Assess the level of fraud risk. Your assessment should be supported with your analyses and evidence collected.

3. Determine the level of planning materiality: Select an appropriate base and apply a reasonable   percentage to calculate the dollar amount of planning materiality. It is important to justify your choice and the reasonableness of the planning materiality.

Example Audit Report

Below is an example of a working paper that auditors use to document an audit. You may wish to use this layout for your audit report. Note: This is a suggestion only.

Report on the Audit of the Financial Report (example report title)

Opinion: (final audit conclusion)

Your Audit Opinion and Justification.

HINT: You are not required to include the common sentences used in audit reports. You only have to state and justify your audit opinion.

Example Audit Working Paper

Monash CPAs

Client Name Company Name	Period-end e.g., 31/12/2023
Prepared by: Student Name	Date: e.g.,	10/01/2024	W/P reference: e.g., A- 1

Purpose: e.g., (1) Assessing Audit Risk

Description of the purpose

Procedures:

Description of the work you have done

Results & Conclusion:

Description of your findings and conclusions.

The description may include the following examples. The following examples may not apply to your case company and each audit task. You don’t need to include all of them. Please feel free to make changes and to tailor the description based on the audit task and the purpose.

1.           Identify key factors, key relationships and other considerations that drive audit risks.

2.           Determine tolerable misstatement based on inherent and control risk assessments.

3.           Set and corroborate expectations.

4.           Compare client actual amounts to expectations and evaluate results.

5.           Assess the need for additional tests of details.