Determine the level of materiality to be used for the audit

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Reference no: EM132100511 , Length: word count:2000

The object of this assignment is to assist students to develop critical analysis skills in relation to materiality used for the audit, analytical review, audit procedures and forming an opinion.

Company - LYC

Section 1.

- Determine the level of materiality to be used for the audit of the group accounts for the year ending in 2017. Your answer should include a discussion of the nature of materiality, and a description of what materiality represents in terms of the audit of a set of financial statements, and should discuss the different bases and considerations employed in arriving at materiality. Explain the rationale behind your choice of a certain level of materiality. Provide a quantitative estimate of materiality for your company.

- Review the various draft notes and disclosures accompanying the draft annual report. Highlight those that may have significance to the audit, eg. Contingencies, and outline the audit procedures that you will need to perform.

Section 2.

The partner has requested you to prepare a preliminary analytical review on the information provided by your company. The partner suggests that as a minimum you address key balance sheet and profit and loss ratios over the period 2014 to 2017.
Based on these results and the nature of your company's business and its markets, outline the apparent trends and changes in these ratios, the key risk areas for the audit and the matters that will have to be addressed in the audit plan. Give examples of relevant assertions and at least one audit procedure for each assertion.

Section 3.
- Review the statement of cash flows. Which category of cash flows provided the majority of cash inflows? Which category had the greatest outflows?

Identify the primary cash receipts and cash payments during the year. What were the main non-cash financial and investing activities?
Using the results of questions 2 and 4, evaluate the going concern risk of this company. What audit procedures would you recommend to address this risk.

- Review the audit report of the 2017 financial report. What type of opinion was expressed?
Are there any additional sections or paragraphs indicating any audit issues? If any, describe the nature of these issues in detail.

Attachment:- Audit assignmnt.rar

Reference no: EM132100511

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Reviews

len2100511

8/30/2018 10:53:59 PM

Hey I need to do only activity 1 which means task 1. can you do it before 4pm tomorrow at time thanks An adequate understanding of cash flows and evaluation of going concern risk. Thoughtful application of audit procedures to mitigate this risk. Rational review of the audit report. Good presentation, some errors with spelling, punctuation or grammar. (5-6.5 marks)Lacking understanding of cash flows or incomplete evaluation of going concern risk. Poor application of audit procedures to mitigate this risk. Inadequate review of the audit report. Fair presentation, errors with spelling, punctuation or grammar. (<5 marks)

len2100511

8/30/2018 10:53:11 PM

Section 3 Comprehensive understanding of cash flows and evaluation of going concern risk. Well-judged application of audit procedures to mitigate this risk. Comprehensive review of the audit report. Excellent presentation, correct spelling, punctuation and grammar. (8.5-10 marks) Effective understanding of cash flows and evaluation of going concern risk. Well-judged application of audit procedures to mitigate this risk. Comprehensive review of the audit report. Excellent presentation, mostly correct spelling, punctuation and grammar. (7.5-8.5 marks) A reasonable well-judged understanding of cash flows and evaluation of going concern risk. Thoughtful application of audit procedures to mitigate this risk. Rational review of the audit report. Very good presentation, mostly correct spelling, punctuation and grammar. (6.5-7.5 marks) An adequate understanding of cash flows and evaluation of going concern risk. Thoughtful application of audit procedures to mitigate this risk. Rational review of the audit report. Good presentation, some errors with spelling, punctuation or grammar.

len2100511

8/30/2018 10:52:08 PM

Adequate review of the information provided in relation to balance sheet and profit and loss information. Some correct ratio analyses and descriptions with identification of key risk areas. Identified most relevant assertions and appropriate audit procedures. Good presentation, some errors with spelling, punctuation or grammar (5-6.5 marks) Response did not adequately analyse the information provided in relation to balance sheet and profit and loss information. Some correct ratio analyses and descriptions with identification of key risk areas. Identified few relevant assertions or appropriate audit procedures. Fair presentation, errors with spelling, punctuation or grammar. (<5 marks) 10

len2100511

8/30/2018 10:52:03 PM

Section 2 Comprehensive and well- judged analytical review of the information provided in relation to balance sheet and profit and loss information. Correct ratio analyses and descriptions with identification of key risk areas. Correctly identified relevant assertions and appropriate audit procedures. Excellent presentation, correct spelling, punctuation and grammar (8.5-10 marks) Effective analytical review of the information provided in relation to balance sheet and profit and loss information. Correct ratio analyses and descriptions with identification of key risk areas. Identified most relevant assertions and appropriate audit procedures. Excellent presentation, mostly correct spelling, punctuation and grammar (7.5-8.5 marks) A reasonable review of the information provided in relation to balance sheet and profit and loss information. Some correct ratio analyses and descriptions with identification of key risk areas. Identified most relevant assertions and appropriate audit procedures. Very good presentation, mostly correct spelling, punctuation and grammar (6.5-7.5 marks)

len2100511

8/30/2018 10:51:17 PM

ACCT20075 Auditing & Ethics – Term 2, 2018. Assessment 2 criteria sheet Grade 7 6 5 4 <4 Mark Section 1 Comprehensive and well- judged application of auditor responsibilities with reference to relevant Standards on materiality and disclosures. Excellent presentation, correct spelling, punctuation and grammar. (8.5-10 marks) Effective and well-judged application of auditor responsibilities with reference to relevant Standards on materiality and disclosures. Excellent presentation, mostly correct spelling, punctuation and grammar. (7.5-8.5 marks) A reasonable well-judged application of auditor responsibilities with reference to relevant Standards on materiality and disclosures. Very good presentation, mostly correct spelling, punctuation and grammar. (6.5-7.5 marks) Some application of auditor responsibilities with reference to relevant Standards on materiality and disclosures. Good presentation, some errors with spelling, punctuation or grammar. (5-6.5 marks) Little application of auditor responsibilities with little or no reference to relevant Standards on materiality and disclosures. Fair presentation, errors with spelling, punctuation or grammar. (<5 marks) 10

len2100511

8/30/2018 10:51:09 PM

This must be your own work and if questioned you should be able to explain your answers without your assignment in front of you. Please read the plagiarism and academic misconduct section at the top of the Moodle page. You should also click on the link for Plagiarism Awareness and watch the video. If I consider any assignment is not the student’s work I will refer you for academic misconduct, therefore it is important that you read and listen to the plagiarism information provided to understand what is and is not acceptable behaviour.

len2100511

8/30/2018 10:50:58 PM

This is a written assessment with a weighting of 30%. A marking rubric has been provided to assist you with the marking scheme for this assessment task. The written assessment is to be presented in report format, the report is due on Monday11.45pm AEST (Week 8). You must submit your Word document via Turnitin on Moodle. The report is to have a maximum length of 2,000 words. This is an individual assignment. Assume you are part of the audit engagement tech for your chosen listed company. The most recent annual report (2017) is the draft annual report for your company. Please check the list on Moodle and look up your Student ID to determine your company code. You are required to answer the following questions in this context.

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