AUDITING ASSIGNMENT

Introduction - This assignment requires you prepare a document to assist the Audit Manager in planning an audit. You must refer to the relevant chapters of the textbook for information relating to audit planning. Your submission for this assignment must not exceed 3000 words in length.

Learning outcomes - On successful completion of this unit, students should be able to:

• Develop an appreciation of the reasons for the existence of a societal demand for audit and assurance services, and an understanding of the current environment in which auditors operate, including legal, ethical and professional aspects.
• Demonstrate an understanding of the key auditing principles, concepts and practices used by auditors to gather evidence and make judgments in order to form an audit opinion on the fair presentation of financial reports.
• Develop an insight into the audit of specific transactions and account balances.
• Be aware of the auditor's responsibility in completing an audit.
• Obtain basis understanding of other types of assurance engagement.

Background - The rationale for BAO3306 Auditing as per Unit of Study Outline is that on completion of this unit students should have a sound understanding of the underlying concepts of auditing and in particular of financial auditing. By adopting a logical, structured approach they should have the capacity to analyse the salient audit issues and apply relevant auditing theories and succinctly communicate their professional, ethical decision.

One of the unit outcomes requires students to be familiar with key tools used by auditors for collecting and evaluating evidence, in both manual and computerised accounting information systems, which will enable them to express an opinion on the fair presentation of financial reports.

To ensure the audit is carried out efficiently and in a timely manner, the auditor develops an audit plan for the conduct and scope of the audit. ASA300 states that the auditor shall plan the audit so that the engagement will be performed in an effective manner.

1. For the purpose of the assignment, you assume the role of an auditor and your firm has recently been appointed as external auditor of an entity. As required by Auditing Standard ASA315.A1 (ISA315.A1), you are assisting your Audit Manager in preparing an audit plan for the audit of the entity's financial statements.

2. The audit fee is $400,000 and had been communicated to the client in the Engagement Letter.

3. You are required to download the 2016 annual report published by the following entity:

- MYOB Group Limited

4. Using information in the relevant chapters of the textbook, the company annual report and other relevant information, preparing a document for your Audit Manager to assist him in planning the audit. Note that quoting directly from textbook does not meet the objective of the assignment.

Required -

With reference to the relevant chapters 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 level

d) Identify what can go wrong (audit risk assessment) for each of the five (5)     accounts selected in (b). Justify your Audit Risk assessment.

4. Conclusion

5. Appendix

6. References

Additional information

For the purposes of the assignment, the following auditing standards are relevant:

- ASA210 Agreeing the Terms of Audit

- ASA220 Quality Control for an Audit of a Financial Report and Other Historical Financial Information

- ASA230 Audit Documentation

- ASA250 Consideration of Laws and Regulations in an Audit of a Financial Report

- ASA300 Planning an Audit of a Financial Report

- ASA315 Identifying and Assessing the risks of Material Misstatement through Understanding the Entity and its Environment

- ASA320 Materiality in Planning and Performing an Audit

- ASA330 The Auditor's Responses to Assessed Risks

- ASA520 Analytical Procedures

Rationale - The subject aims to familiarise the student to some of the key tools used by auditors for collecting and evaluating evidence, in both manual and computerised accounting information systems, to enable them to express an opinion on the fair presentation of financial reports. 

The subject also aims to provide students with an insight into the current environment in which auditors operate, including legal liability, ethical and other professional aspects such as the "audit expectation gap".  As such, the subject provides both a conceptual and practical approach to external, as well as internal and public sector auditing, enabling students to gain a complete picture of the audit process in light of contemporary audit issues. 

In addition, the subject aims to enhance a number of generic skills through both the formal components of assessment and the student's class participation.  These include: research, problem solving, and analytical skills; written and presentation skills; and within/between group interaction skills. 

This individual assignment aims to provide students with an appreciation of the initial stage of the audit process known as audit planning. Specifically, it allows students to develop an understanding of the steps involved in developing an audit plan. Students are required to follow the structure approach specified in Gay & Simnett, 2015, Auditing & Assurance Services in Australia 6e, McGraw Hill.