ASSESSMENT 2 BRIEF
\nSubject Code and Title ACCT2004 Auditing and Internal Controls
\nAssessment Assessment Two
\nIndividual\/Group Individual
\nLength 2,000 words
\nLearning Outcomes The Subject Learning Outcomes demonstrated by successful completion of the task below include:
\nb) Explain the professional, legal and ethical requirements and responsibilities of auditors and explore the significance of audit quality.
\nc) Illustrate an understanding of the audit process including risk assessment, response to assessed risks and audit reporting requirements.
\nd) Demonstrate an understanding of assurance engagements other than historical financial information and investigate the relevance of such engagements in the contemporary business environment.
\nSubmission Due by 11:55pm AEST\/AEDT Sunday end of week 10
\nWeighting 25%
\nTotal Marks 100 marks
\nAssessment Task
\nThe assessment covers a range of scenarios that auditors confront when conducting and audit. Students are to review the scenarios and apply practical solutions to each scenario using current auditing literature to justify their answers.
\nInstructions
\nBackground \u2013 The Auditor and the Audit Client
\nInfinity Auditors are Certified Practicing Accountants who are registered company auditors. They service a broad range of clients across Australia however they are known for their work within the medical and pharmaceutical industries. Established in 1986 the firm consists of 8 partners, 50 audit staff and 10 administration staff. You have been an audit senior with Infinity Auditors for 3 years.
\nInfinity Auditors have two offices located in Adelaide and Brisbane.
\nDuring the year Infinity Auditors was approached by Medical Services Group Limited (MSG) to complete their 2020 financial year audit. Their financial year ends June 30 and the previous auditor was ABC Auditors.
\nMSG supplies medical equipment to hospitals and doctor surgeries including medical diagnostic testing units, disposable products for surgery and medical safety equipment. They sell a total of 230 stock items ranging from $50 an item to $50,000 an item. They have warehouses in Sydney, Melbourne and Adelaide but ship their products all over Australia. Recently MSG opened another warehouse in Brisbane bringing the total number of warehouses to four. The head office is in Adelaide, and this is where most of the administration staff are located.
\nPlease complete the following questions:
\nQuestion 1
\nPrior to accepting MSG as a client, you need to first assess if they are a suitable audit client for your firm. Develop a Client Engagement Workpaper to be used by Infinity Auditors for their audit preplanning. You are required to look at policy and practice requirements and how you may gather sufficient and appropriate evidence to test with a clearly defined set of procedures.
\nPolicy and practice requirements detail the types of checks that you would carry out before accepting the engagement. This section should also state the reasoning that this check is required using appropriate legislation, standards, policies or identification of any potential audit risks.
\nProcedure looks at how you might gather appropriate evidence to test client suitability. Note that you can complete several different procedures for each policy and practice requirement.
\nWorkpaper Example:
\nCLIENT ENGAGEMENT WORKPAPER
\nThis workpaper is used to check the suitability of new clients.
\nAudit Client:
\nLead Auditor: YOUR NAME
\nPolicy & Practice Requirements Procedure to be Carried Out
\nPolicy: Obtain ethical clearance from previous auditor
\nReasoning: State any legislative or conditions as to why you would take this action. Action: How would you achieve this policy?
\nFindings: Stated here, detail your findings here
\nCompleted: DATE
\nInitials: Your initials
\nComplete a minimum of four (4) policy and practice requirements and a minimum of two procedures to check each policy. You can use the example provided and you are to assume that you completed the procedure so that you can document your findings.
\nQuestion 2
\nYou have engaged MSG as a client and have started the independent audit of MSG\u2019s financial statements.
\nYou have been asked to circulate the receivable confirmations to MSG\u2019s debtors. These letters seek to confirm the balances that MSG has in their accounts with that of its customers. On June 30, 2020 the Accounts Receivable balance is $3,980,250 and is considered material.
\nMSG\u2019s payment terms are 14 days from the date of the invoice. Sixty per cent of the balance is represented by invoices outstanding from five different medical practitioners. The remaining forty per cent is made up of numerous smaller amounts, most of which have been outstanding for more than 60 days. Any allowance for doubtful debts is taken directly against the trade receivables account and not shown separately in the balance sheet.
\na. Discuss the strength and weaknesses of debtor confirmations as audit evidence for MSG. Include the deficiencies in the accounting system and accounts receivable process in your answer.
\nb. Is it possible for Infinity Auditors to use debtor confirmations as the only audit evidence?
\nQuestion 3
\nMSG use a perpetual inventory system which updates the stock levels every time an item is bought or sold. On year end, the manager prints out a full stock list for each location showing:
\n\u2022 Stock code
\n\u2022 Quantity on hand
\n\u2022 Location of stock
\n\u2022 Cost per unit
\nAt year end, a physical stocktake was carried out by MSG staff at the four MSG locations. All physical inventory items are checked against the inventory system printouts and any discrepancies are noted and provided to the warehouse manager who updates the stock levels in the accounting system.
\nOn June 30, the inventory on hand in the accounting system shows total inventory cost over the four locations is $23,500,000. The physical stocktake shows a physical inventory count of $23,100,000, the level of materiality set for inventory is 3%.
\na. You are to gather sufficient and appropriate evidence regarding the existence and completeness for inventory. Describe the type of tests you would carry out for each of these assertions.
\nb. Discuss how you would select a sample size for testing the existence and completeness assertions. You must support your reasoning with the available literature.
\nReferencing
\nIt is essential that you use appropriate APA 7th Edition style for citing and referencing research. Please see more information on referencing in the Academic Skills webpage.
\nSubmission Instructions
\nThe assessment needs to be submitted by midnight of week 10.
\nAcademic Integrity
\nAll students are responsible for ensuring that all work submitted is their own and is appropriately referenced and academically written according to the Academic Writing Guide. Students also need to have read and be aware of Torrens University Australia Academic Integrity Policy and Procedure and subsequent penalties for academic misconduct. These are viewable online.
\nStudents also must keep a copy of all submitted material and any assessment drafts.
\nSpecial Consideration
\nTo apply for special consideration for a modification to an assessment or exam due to unexpected or extenuating circumstances, please consult the Assessment Policy for Higher Education Coursework and ELICOS and, if applicable to your circumstance, submit a completed Application for Assessment Special Consideration Form to your Learning Facilitator.
\nAssessment Rubric
\nAssessment Attributes Fail
\n(Yet to achieve minimum standard) 0-49% Pass
\n(Functional)
\n50-64% Credit
\n(Proficient) 65-74% Distinction
\n(Advanced)
\n75-84% High Distinction
\n(Exceptional)
\n85-100%
\nKnowledge and understanding of client engagement, ethics, audit pre-planning and business risk.
\nPercentage for this
\ncriterion = 25%
\nDemonstrates a partially developed understanding
\nof the client audit engagement process, ethical standards, audit preplanning and business risk assessment.
\nDemonstrates a functional knowledge of client engagement, ethics, audit
\npre-planning and business risk by
\nIdentifying 2 policies and procedures to be carried out on client engagement
\nDemonstrates a functional knowledge of current audit legislation, standards and audit risk.
\nProvide at least one procedure to test policies and gather sufficient and appropriate evidence.
\nDemonstrates proficient knowledge of client engagement, ethics, audit pre-planning and business
\nrisk by
\nIdentifying 3 policies and procedures to be carried out on client engagement
\nDemonstrates proficient knowledge to current audit legislation, standards and audit risk.
\nProvide appropriate procedures to test policies and gather sufficient and appropriate evidence.
\nDemonstrates advanced knowledge of client engagement, ethics, audit
\npre-planning and business risk by
\nIdentifying 4 policies and procedures to be carried out on client engagement
\nDemonstrates advanced knowledge to current audit legislation, standards and audit risk.
\nProvide several aligned procedures to test policies and gather sufficient and appropriate evidence.
\nDemonstrates exceptional knowledge of client engagement, ethics, audit
\npre-planning and business risk by
\nIdentifying 4 policies and procedures to be carried out on client engagement
\nDemonstrates exceptional knowledge to current audit legislation, standards and audit risk.
\nProvide excellent aligned procedures to test policies and gather sufficient and appropriate evidence.
\nKnowledge and understanding of audit processes and evidence gathering.
\nPercentage for this criterion = 25%
\nDemonstrates a partially developed understanding of audit processes and evidence gathering.
\nDemonstrates a functional knowledge of audit processes and evidence gathering by:
\nIdentifying some strengths and weakness in the audit evidence gathering technique selected.
\nDemonstrates some analysis and synthesis of new knowledge with application of audit gathering techniques.
\nDemonstrates proficient knowledge of audit processes and evidence gathering by:
\nIdentifying a few strengths and weakness in the audit evidence gathering technique selected.
\nDemonstrates a functional analysis and synthesis of new knowledge with application
\nof audit gathering techniques.
\nProvides further recommendation for audit evidence collection.
\nDemonstrates advanced knowledge of audit processes and evidence gathering by:
\nIdentifying multiple strengths and weakness in the audit evidence gathering technique selected.
\nDemonstrated strong analysis and synthesis of new knowledge with application of audit gathering techniques.
\nProvides further recommendation for audit evidence collection.
\nDemonstrates exceptional knowledge of audit processes and evidence gathering
\nIdentifying multiple strengths and weakness in audit evidence gathering technique selected.
\nDemonstrated an excellent analysis and synthesis of new knowledge with application of audit gathering techniques.
\nProvides further recommendation for audit evidence collection.
\nKnowledge and understanding of audit assertions and sampling.
\nDemonstrates a partially developed understanding of audit assertions and audit sampling.
\nDemonstrates a functional knowledge of audit processes and evidence gathering by:
\nProviding adequate tests for assertions.
\nDemonstrates proficient knowledge of audit processes and evidence gathering by:
\nProviding reasonable solutions for testing assertions.
\nDemonstrates advanced knowledge of audit processes and evidence gathering by:
\nProviding solutions aligned to case for testing assertions.
\nDemonstrates exceptional knowledge of audit processes and evidence gathering
\nProviding robust solutions for testing audit assertions.
\nPercentage for this criterion = 25%
\nIdentifying sampling methods with limited justification.
\nIdentifying sampling methods with justification.
\nIdentifying useful sampling methods with justification to literature.
\nIdentifying sampling methods with justification to literature.
\nEffective
\nCommunication
\n(Written)
\nPercentage for this
\ncriterion = 15%
\nSpecialised language and terminology is rarely or inaccurately employed.
\nMeaning is repeatedly obscured by errors in the communication of ideas, including errors in structure, sequence, spelling, grammar, punctuation and\/or the acknowledgment of sources.
\nCommunicates in a readable manner that largely adheres to the given format.
\nGenerally employs specialised language and terminology with accuracy.
\nMeaning is sometimes difficult to follow.
\nInformation, arguments and evidence are structured and sequenced in a way that is not always clear and logical.
\nSome errors are evident in spelling, grammar and\/or punctuation.
\nCommunicates in a coherent and readable manner that adheres to the given format. Demonstrates advanced knowledge to current audit legislation, standards and audit risk.
\nProvide several aligned procedures to test policies and gather sufficient and appropriate evidence.
\nDemonstrates exceptional knowledge of client engagement, ethics, audit \\spre-planning and business risk by
\nIdentifying 4 policies and procedures to be carried out on client engagement
\nDemonstrates exceptional knowledge to current audit legislation, standards and audit risk.
\nProvide excellent aligned procedures to test policies and gather sufficient and appropriate evidence.
\nKnowledge and understanding of audit processes and evidence gathering.
\nPercentage for this criterion = 25%
\nDemonstrates a partially developed understanding of audit processes and evidence gathering.
\nDemonstrates a functional knowledge of audit processes and evidence gathering by: \\sIdentifying some strengths and weakness in the audit evidence gathering technique selected.
\nDemonstrates some analysis and synthesis of new knowledge with application of audit gathering techniques.
\nDemonstrates proficient knowledge of audit processes and evidence gathering by: \\sIdentifying a few strengths and weakness in the audit evidence gathering technique selected.
\nDemonstrates a functional analysis and synthesis of new knowledge with application \\sof audit gathering techniques.
\nProvides further recommendation for audit evidence collection.
\nDemonstrates advanced knowledge of audit processes and evidence gathering by: \\sIdentifying multiple strengths and weakness in the audit evidence gathering technique selected.
\nDemonstrated strong analysis and synthesis of new knowledge with application of audit gathering techniques.
\nProvides further recommendation for audit evidence collection.
\nDemonstrates exceptional knowledge of audit processes and evidence gathering
\nIdentifying multiple strengths and weakness in audit evidence gathering technique selected.
\nDemonstrated an excellent analysis and synthesis of new knowledge with application of audit gathering techniques.
\nProvides further recommendation for audit evidence collection.
\nKnowledge and understanding of audit assertions and sampling.
\nDemonstrates a partially developed understanding of audit assertions and audit sampling.
\nDemonstrates a functional knowledge of audit processes and evidence gathering by:
\nProviding adequate tests for assertions.
\nDemonstrates proficient knowledge of audit processes and evidence gathering by: \\sProviding reasonable solutions for testing assertions.
\nDemonstrates advanced knowledge of audit processes and evidence gathering by: \\sProviding solutions aligned to case for testing assertions.
\nDemonstrates exceptional knowledge of audit processes and evidence gathering
\nProviding robust solutions for testing audit assertions.
\nPercentage for this criterion = 25%
\nIdentifying sampling methods with limited justification.
\nIdentifying sampling methods with justification.
\nIdentifying useful sampling methods with justification to literature.
\nIdentifying sampling methods with justification to literature.
\nEffective \\sCommunication \\s(Written)
\nPercentage for this \\scriterion = 15%
\nSpecialised language and terminology is rarely or inaccurately employed.
\nMeaning is repeatedly obscured by errors in the communication of ideas, including errors in structure, sequence, spelling, grammar, punctuation and\/or the acknowledgment of sources.
\nCommunicates in a readable manner that largely adheres to the given format.
\nGenerally employs specialised language and terminology with accuracy.
\nMeaning is sometimes difficult to follow.
\nInformation, arguments and evidence are structured and sequenced in a way that is not always clear and logical.
\nSome errors are evident in spelling, grammar and\/or punctuation.
\nCommunicates in a coherent and readable manner that adheres to the given format.
\nAccurately employs specialised language and terminology.
\nMeaning is easy to follow. Information, arguments and evidence are structured and sequenced clearly and are logical.
\nOccasional minor errors present in spelling, grammar and\/or punctuation.
\nCommunicates coherently and concisely in a manner that adheres to the given format.
\nAccurately employs a wide range of specialised language and terminology.
\nEngages audience interest. Information, arguments and evidence are structured and sequenced in a way that is, clear and persuasive.
\nSpelling, grammar and punctuation are free from errors.
\nCommunicates eloquently. Expresses meaning coherently, concisely and creatively within the given format.
\nDiscerningly selects and precisely employs a wide range of specialised language and terminology.
\nEngages and sustains audience\u2019s interest. Information, arguments and evidence are insightful, persuasive and expertly presented.
\nSpelling, grammar and punctuation are free from errors.
\nCorrect citation of key
\nresources and evidence
\nPercentage for this criterion = 10%<\/p>\n","protected":false},"excerpt":{"rendered":"
ASSESSMENT 2 BRIEF Subject Code and Title ACCT2004 Auditing and Internal Controls Assessment Assessment Two Individual\/Group Individual Length 2,000 words Learning Outcomes The Subject Learning\u2026<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8186,8197,8185],"tags":[8215],"class_list":["post-88992","post","type-post","status-publish","format-standard","hentry","category-accounting-homework-help","category-assessment-assignment-help-uk","category-finance-assignment-help","tag-acct2004-auditing-and-internal-controls"],"_links":{"self":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts\/88992","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/comments?post=88992"}],"version-history":[{"count":0,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts\/88992\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/media?parent=88992"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/categories?post=88992"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/tags?post=88992"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}