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HI6026 Audit, Assurance and Compliance - Holmes Institute

Assessment - Business Risk, Key Assertions, Going Concern and Audit Committee

Purpose: Students are required to explain business risk, including audit risk, key assertion, going concern and practices of audit committee from your allocated company. Students are required to analyses and clearly explain Business Risk, Key Assertion, Going Concern and Audit Committee's responsibilities by understanding the nature and the uniqueness of the allocated company. Students are also required to specify whether their selected company's follows audit committee guideline as suggested by ASX guideline to ensure the effectiveness of the audit committee.

Learning Outcome 1: Evaluate the economic and legal basis for auditing and the applicable auditing standards and reporting requirements

Learning Outcome 2: Analyse and communicate knowledge of the auditor's professional judgement, legal and ethical responsibilities to their clients and third parties

Learning Outcome 3: Assess audit strategies including the evaluation of business risk and internal controls

Learning Outcome 4: Apply audit concepts and processes to gather evidence and formulate judgments with respect to the underlying information

This assignment aims to enhance students' critical thinking skills and higher order application abilities through research and analyses of business risks including analytical procedure, assessment of audit risk, key financial report assertions, going concern and audit committee role and governance practices.

Students will have to research relevant academic literature, including related organization websites and write in- text citations in this assignment. Additionally, they will demonstrate understanding and critical evaluation of the Australian conceptual framework for financial reporting and corporate governance mechanism including regulatory framework, and recommend future directions to Australian financial reporting regulators in relation to corporate governance principles and best practices.

Assignment Requirements - Questions
Each group has been allocated a subject company for completing this assignment. In the excel file "Find Your Company" located under "Assessments" on Blackboard, you will find the listed company that you have been allocated for this assignment.

Important note: You are NOT allowed to select your own companies. As a group you must complete this assignment with the subject company that your group have been allocated. Your assignment will not be marked if you use a different company to the one that you have been allocated, or you will be asked to resubmit your assignment using the correct company. Students are not allowed to complete the assignment using the same company as used by another group.

Go to the website of your subject company. Then go to the Investor Relations section of the website. This section may be called: "Investors", "Shareholder Information" or similar titles. In this section, find the company's annual report and other related reports. Download the firm's latest annual report and other related information and reports and save it to your computer. For example, these reports may be dated 30 June 2019 or 30 June 2020.

As a group assume that you have been appointed as the external auditors for your allocated company for the financial year ending June 2019 or 2020, prepare a report to adequately address questions one, (1) to four (4) below which are deemed to be important for the audit of your client.

Question 1- Gain an understanding of the nature and uniqueness of your allocated company, its industry and the environment in which it operates, then identify key business risks. After this is performed, critically assess where the risks of material mis-statements could be in the financial report of your allocated company. You need to consider the factors affecting both Inherent Risk and Control Risk.

Question 2- Critically evaluate and examine key accounts of your allocated company which are likely to be materially at risk for misstatements (indicate the key assertions at risk) and provide valid justifications for your claims.

Question 3- Evaluate the going concern assumption of your allocated company and present an argument to indicate whether it has been applied appropriately. Your argument must be supported by valid evidence.

Question 4- Critically evaluate the nature and structure of the audit committee of your allocated company and outline how it helps in enhancing the effectiveness of corporate governance mechanism. You need to critically evaluate the audit committee with reference to the ASX Corporate Governance Principles and Recommendations. Your evaluation should be supported by relevant literature.

Attachment:- Going Concern and Audit Committee.rar