Reference no: EM132261167
Audit Strategies and Planning Memorandum (ASPM)
Objective
BAP41 covers a range of important theory and practice of issues in Auditing & Assurance. The main purpose of this assessment is to provide students with the opportunity to extend their understanding and practical application in a key audit skill (Analytical Review Procedures) which are used throughout an audit and in practice have been deemed to be effective in highlighting potential earnings management issues.
The assessment will allow students the opportunity to prepare an Audit Strategies and Planning Memorandum (ASPM) further enhancing their knowledge by applying the theory learnt to develop a practical document used on most audit engagements.
Assessment Background:
Students will be required to act as an Audit Senior involved in the Audit of ABC Learning who is completing the Audit Planning and is responsible for the effective Analytical review of the historical financials covering the years 2000-2007.
The results of your review will need to be summarised for your Audit Manager highlighting areas of concern and recommendations in terms of changes to the Audit Approach. Having performed this analysis the students will then be required to prepare the Audit Strategies and Planning Memorandum.
Groups:
Your group will be required to select a Group Lead who will be the contact person for the group and lecturer. The Group Lead will also submit the Group Assignment on behalf of everyone in the group.
ASPM Requirements and Layout:
The ASPM should include the following sections as a minimum (some flexibility is offered in terms on the structure of the ASPM, this should be supported by research conducted).
1) Executive Summary - this should include a summary of the following:
a. Purpose of the report
b. Risk Assessment and areas of audit focus
c. Audit Approach
d. Materiality
e. The Team members
f. Independence
g. Engagement execution and reporting
h. Audit Fee Details
2) Description of the Client and Business
3) Recent Business Developments
4) Results from Overall Analytical Review
5) Audit Scope and Approach
a. Audit Planning process
b. Scope of Work
c. Control Environment Assessment
d. IT General Controls Assessment
e. Responsibilities in relation to fraud
f. Working with Internal Audit and use of specialists / experts
g. Confirmation of Independence
6) Materiality
7) Risk Assessment and areas of audit focus
8) Audit Engagement and Reporting (including key communication points)
9) Outline of Fees
10) The Team
11) Appendix - Results of Analytical Review
a. Application of DuPont Analysis, Common size, Trend analysis and Beneish M-Score(Describe what each is and what the ratios are trying to achieve and what risks they highlight)
12) Referencing (Harvard Anglia compliant)
You may find it very useful to make a table using these 12 points as a starting point to review your GROUP's Analysis.
Attachment:- Assignment Instructions.rar