Reference no: EM133710178

Auditing and Assurance

Assessment - Case Study

Your Task

Part A:
You must complete a report detailing your findings and suggested audit procedures as stated in Assessment Question for an ASX-listed company.

Part B:
Summarise your findings and the suggested Audit procedures in a 5-6-minute video presentation.

You are required to complete Assessment based on the following ASX listed company: IDP EDUCATION LIMITED (ASX Code IEL)

Assessment Description

This assessment is designed to test your ability to apply the knowledge gained from workshops during the trimester in identifying assertions at risk and developing appropriate audit procedures. This will be done by analysing available information of an Australian company (from now on referred to as "The Company") that is listed on the ASX.

Your facilitator will discuss the assessment requirements during Workshop 6 and Workshop 12. Workshop participants will be divided into groups to discuss the assessment requirements based on a sample case study. Your facilitator will then give feedback on each group's responses to applying the questions to the sample case. The discussions during Workshops 6 and 12 are expected to clarify the expectations and requirements for performing at a high standard in this assessment.

Assessment Instructions

Learning Objective 1: Research information about the selected company (using multiple sources).

Learning Objective 2: Address particular areas of the audit process and develop appropriate audit procedures.

Learning Objective 3: Develop professional report-writing skills.

Assessment Question:

You participated in a vacation program at a local audit firm during your semester break. During the vacation program, you assisted an audit senior with planning a medium-sized company, including developing appropriate substantive audit procedures. You have one more semester to complete your postgraduate course and have indicated to the audit manager that you would like to work full-time at the audit firm upon completing your course.

The audit manager has asked you to write a report to determine your suitability as a candidate for a permanent role in the audit firm. The manager wants to assess your ability to apply the knowledge you gained to the audit planning process, develop appropriate substantive procedures, and develop your report writing skills.
You are required to address the following in your report (refer to rubrics on pages 5 & 6 of this document for a breakdown of marks and achievement criteria by component):

Identify 4 business risks of The Company that will increase the risk of material misstatement (specifically inherent risk) at the assertion level for classes of transactions or account balances. For each business risk, identify only 1 class of transaction or account balance (income statement or balance sheet line item), and for each class of transaction/account balance, please identify the assertion most (only one) at risk of misstatement. You need to explain why each business risk will lead to a risk of misstatement to the specific class of transaction/account balance and assertion you have identified.

Describe, in detail, the appropriate substantive procedure that will address each class of transaction or account balance and assertion identified as at risk of material misstatement. The description of procedures must be detailed enough for someone with limited auditing knowledge to carry out the procedures correctly.

Additional Requirements:

Do not use the same combination of account balance/class of transaction and assertion as used in the sample case study.

Refrain from repeating the same combination of account balance/class of transaction and assertion in your answers. For example, if you have identified the existence of inventory as the assertion and account balance at risk of misstatement for your first business risk identified, do not use the existence of inventory for the second, third or fourth business risk. You can identify inventory as at risk but for an assertion other than existence, or you can identify the existence of a different account balance to be at risk of misstatement. Remember, though, that whatever account balance/class of transaction and assertion is identified as at risk of misstatement, you must logically and convincingly explain why this is the case based on the business risk you have identified.
Where the same combination is repeated, marks will not be awarded for requirement 2 (description of appropriate substantive procedures) as the substantive procedure will be the same.

You must include the following in your report:

Title page
Table of contents
Executive summary
Introduction
Body of the report
Conclusion
References

Possible Sources of Information for the assessment may include:

The latest annual report of The Company
The Company website
Announcements on ASX about The Company
News articles on The Company
Corporate Governance Statements of The Company