Reference no: EM132388039 , Length: word count:2000

Audit and Assurance Assignment - MPA Audit and Assurance - Internal Controls

This assessment is designed to assess the following subject outlines:

• Analyse the audit process, including quality control, risk and assurance procedures and tests.
• Apply audit concepts and standards to the preparation of financial statement audits LO E develop internal audit and control systems and procedures for financial statement audits.
• Produce a business report assessing the financial audit statement of a selected organization.

This assessment has three parts you must attempt all three parts:

Part A: Identifying and testing effective internal controls.

Part B: Identify weak internal controls in the payroll account.

Part C: Recommending an appropriate audit strategy and audit plan for the payroll account.

You are an audit manager for Anderson, Frazer and Mutter (AFM) and assigned to assist in the planning for the current year's audit engagement of Blasting, Drilling and Earthmovers Limited (BDE). BDE services and leases large mining equipment to gold mines in the area.

Principle activities of BDE:

• mining machine leasing, mainly to gold, coal and iron ore miners.
• machine maintenance, and
• contracting machine operators to the mines.

BDE Ltd has internal auditors, a risk committee, an audit committee and a governing board.

The Financial Controller for BDE has provided you with the latest internal control manual which includes details of the controls over contract payments. As the system is new you also walk through the system checking that the walkthrough matches the information in the internal control manual.

Details of the controls over contract payments evidenced in your walkthrough are attached.

Required - Prepare a business report, including a brief executive summary, to your managing partner that address the questions below. Where indicated use the following format to answer the question.

PART A - Identify the internal controls in the system that are potentially effective, the risk that the control could alleviate and one test of control for each of the identified potentially effective controls.

PART B - List and identify the weaknesses in internal control for contract payroll.

PART C - Based on your analysis above, recommend to the Audit partner the overall audit strategy and an audit plan (nature, timing and extent) for testing BDE's payroll account.

Your business report must have:

Title page

Executive Summary - this is not an introduction but summarises the following:

• Purpose - why have you been asked to do this?
• Scope - how extensive will you look (which accounts will you focus on and what types of risk)?
• Process - what are you going to do?
• Findings
• Recommendations

Table of contents

Introduction

 Part A

Part B

 Part C

Conclusion - needs to highlight major findings and recommendations

Reference list.

Prescribed Textbook should be used to reference. Textbook - Audit and Assurance Services in Australia by Grant Gay and Roger Simnett (7th Edition).

Attachment:- Audit and Assurance Assignment File.rar