ASSIGNMENT

Background

There are two parts to the assignment. The first part requires students to set up an entity's books in MYOB and process transactions to relevant accounts. The second part requires students to prepare a document for the Audit Manager.

You have recently graduated from VU and are now working for a small accounting firm. The firm recently purchases MYOB software for internal use. Upon learning that you had recently completed an accounting degree, the firm's partner asks you to set up and process a number of transactions into relevant accounts.

Required
1. Set up the firm on MYOB.
2. The financial year must be 1 April 2015 to 31 March 2016
3. Process the transactions listed in Part A_MYOB_S12016 into relevant accounts.
4. Print out and submit reports for the year ended 31 March 2016.

Part A

No. Task required                             Details 1 Set up a company

Set system date                             1/04/2015

Company details:                          sem1 2016 (example: Tom sets up a company called Tom Ltd)

ABN                                           32 889 888 887

Address                                       300 Ballarat Road, Footscray, VIC 3010

Phone                                         (03) 4444 2222

Fax                                             (03) 4444 3333

Email                                                                 [email protected] (example: [email protected])

Financial year                               01/04/2015 to 31/03/2016

Conversion month                         April

No. of accounting periods                13

Industry classification                     Service

Type of business                           Accounting Firm

2  Set up accounts module

Edit an account                             1-1110 - cheque account, change to cash at bank 4-1000 - Fee Income, change to Service Revenue

1-1200 -Trade Debtors, change to Accounts Receivable 2-1200 Trade Creditors,  change to Accounts Payable

Add an account                             1-2300 Inventory

3  Delete an account                         2-1120 Diners Club, delete this account

Entering opening balances               1-1110: $32000; 1-1200: $16500; 2-1310: $1500; 3-1110: $23500; 3-1210: $23500

4  Set up sales module

Sales Layout for Invoices                service

Credit limit                                    $20,000

Tax code                                      GST

Payment method                           Cheque

Payment due                                In a Given # of Days

Balance Due Days                         30

5  Set up customer cards                   A&Z, ABN: 32 333 666 567, 5 15 king street, kew, VIC 3025, phone: 03 1234 5678, email: tom@a&z.com.au. Payment method: cheque. Income account: 4-1100.

B&Y, ABN: 32 456 789 222, 10 queen street, kent, VIC 3032, phone: 03 2345 6789. Payment method: cheque. Income

account: 4-1100

Enter a customer's opening balance    A&Z, invoice no.: 182, date: 01/04/15, Total including tax: $16500, Tax code: GST.

6  Set up purchases module

Purchase layout for invoices           Service

Supplier credit limit                       $20,000

Tax code for suppliers                    GST

Payment method                           Cheque

Payment due                                In a Given # of Days

Discount days                               0

Balance due                                  30

% Discount early payment               0

Set up supplier cards                      C&X, 1 third street, charlie, VIC 3003, phone: 03 9876 5432, ABN: 32 566 778 999

D&W, 2 fourth street, bravo, VIC 3004, phone: 03 8765 4321, ABN: 32 777 444 321

2  Set up inventory module

Enter item profile data Item no. 4401, name: accounting package, status: buy, sell and inventory, COGS account: 6-1000, Income account: 4- 4000, Inventory account: 1-2300, buying unit of measure: each, number of items per buying unit: 1, tax code: GST, minimum level of restocking alert: 5, primary supplier: C&X, supplier item number: 4401, default reorder quantity: 4, base selling price: $750, selling unit of measure: each, number of items per selling unit: 1, tax code: GST.

Item no. 5502, name: tax package, status: buy, sell and inventory, COGS account: 6-1000, Income account: 4-4000, Inventory account: 1-2300, buying unit of measure: each, number of items per buying unit: 1, tax code: GST, minimum level of restocking alert: 5, primary supplier: D&W, supplier item number: 5502, default reorder quantity: 4, base selling price: $650, selling unit of measure: each, number of items per selling unit: 1, tax code: GST.

3  Enter transactions

Purchase of inventory

Tax invoice: 300, supplier: C&X, description: 5 copies of the accounting package at $500 each, invoice amount: $2500 (GST exclusive), tax code: GST, date: 16 May 2015.

Purchase of inventory

Tax invoice: 123, supplier: D&W, description: 4 copies of the tax package at $450 each, invoice amount: $1800 (GST exclusive), tax code: GST, date: 26 June 2015.

Service revenue

Tax invoice: 11, order: C101, customer: A&Z, description: accounting service re preparation of A&Z financial statements, revenue account: 4-1000, invoice amount: $3000 (GST exclusive), tax code: GST, date: 10 July 2015.

Sale of goods                               

Tax invoice: 111, order: D202, customer: B&Y, description: 1 tax package at $650, revenue account: 4-4000, invoice amount: $650 (GST exclusive), tax code: GST, date: 30 August 2015.

Payment from customer                  

Receipt no.: 1, customer: A&Z, ID#: CR001, payment method: cheque, amount: $16500, tax code: GST, date: 1 May 2015.

Service revenue                             

Tax invoice: 112, order: e103, customer: B&Y, description: consulting fees re preparation of B&Y tax accounts, revenue account: 4-1000, invoice amount: $2000 (GST exclusive), tax code: GST, date: 12 September 2015.

Expense payment                          

Cheque no. 150, supplier: topad, payee: topad advertising agency, amount: $1100 (GST exclusive), tax code: GST, date: 9 October 2015.

4  Print reports                               

Trial balance - 13th Period 2016 Balance Sheet as of 31 March 2016

Profit and Loss Statement (Accrual) April 2015 - March 2016 Account Transactions (Accrual) 01/04/15 to 31/03/16

PART B

1. You have recently been appointed external auditor of the entity. You are assisting your Audit Manager in planning for the audit of the entity's financial statements.

2. You are required to download the annual report published by the following entity:
- Pacific Star Network Network Limited (http://www.pacificstarnetwork.com.au/)

3. Using information from chapters 3 and 4 of the textbook, prepare a document for your Audit Manager. Your document must include key information set out below.

4. You have accepted and communicated your decision to the client in the engagement letter. The audit fee is $65,000.

Required

With reference to Chapters 3 and 4 of the textbook, prepare a document for your Audit Manager. Your document must include the followings:
1. Executive summary
2. Introduction
3. Key information:
    a) Gain an understanding the client
    b) Identify five (5) significant accounts most at risk of being materially misstated
    c) Set planning materiality
    d) Assess what can go wrong (audit risk assessment) for each of the five (5) accounts selected in (b)
4. Conclusion
5. Appendix
6. References

Hints and Tips

1. You are required to plan the audit using only information that is publicly available. That is, you only use the information that is published by the entity either on its website or printed materials.

2. You must download and use the pro-forma document on VU Collaborate.

3. In identifying significant accounts, you are advised to use analytical procedure
- simple comparison to identify five (5) accounts most at risk of being materially misstated.

4. When making preliminary judgements about materiality levels and developing preliminary audit strategies for significant assertions, you are required to consider the Income Statement, Balance Sheet and the notes.

5. To calculate materiality level for this audit assignment, you are advised to calculate 1% of the total revenue account balance, i.e. 1% of total operating revenue of $20.86 million = $20.86 million x 0.01 = $208,860.

6. In considering what can go wrong for each of the five (5) accounts selected, you must assess the audit risk for each of those accounts using the audit risk model.

7. Quoting directly from textbooks and reports will increase the similarity index. Quoting without proper referencing will also increase the similarity index. As this assignment requires you to use auditing theory to prepare a document for a real-life organisation, quoting from textbook does NOT meet the requirements. Students are advised to prepare their own document.

8. VU Collaborate has the facility to report on whether your assignment is copied from other sources. Penalty of four (4) marks may apply for poor presentation. Serious breaches will be reported to the disciplinary panel.

9. Submit your assignment early. A penalty of two (2) marks per day applies to late submission.

10. If you want to remove the previous version of the assignment on VU Collaborate, submit a blank assignment or a new version.