Assessment Task – Tutorial QuestionsMarketing Research and Data Analysis
Unit Code: HI-6026
Unit Name: Audit, Assurance and Compliance
Assignment: Tutorial Questions
Due: 28 February 2021
Weighting: 50%
Purpose: This assignment is designed to assess your level of knowledge of the key topics covered in this unit
| 1. Demonstrate an understanding of the reporting requirements and auditing standards. |
| 2. Demonstrate an understanding of the auditor’s professional, legal and ethical responsibilities to their clients and third parties. |
| 3. Identify the elements of the financial report audit process. |
| 4. Understand the audit planning procedures, evaluate the business risk and assess the internal control. |
| 5. Prepare auditing procedures for transactions and balances by conducting control and substantive Tests. |
| 6. Understand the auditor’s reporting obligations. |
Description: Each week students were provided with three tutorial questions of varying degrees of difficulty. The tutorial questions are available in the Tutorial Folder, for each week, on Blackboard. The Interactive Tutorials are designed to assist students with the process, skills and knowledge to answer the provided tutorial questions. Your task is to answer a selection of tutorial question for weeks 1 to 5 inclusive and submit these answers in a single document.
Submission Directions:
The assignment will be submitted via Blackboard. Each student will be permitted only ONE submission to Blackboard. You need to ensure that the document submitted is the correct one.
| Question 1 | Week 1 (7 Marks) |
Section 301 of the Corporations Act requires companies to have their financial reports audited. Academic research suggests that Big-4 auditors charge higher fees than other auditors and their audit reports are more credible than those issued by other auditors.
Required:
In times of economic recession would you expect:
- the demand for audits to increase or decrease? (3 marks) (100-150 words)
- clients to shift from large (Big-4) auditors to smaller auditors, or from smaller auditors to Big- 4 auditors? Why or why not? (4 marks) (100-150 words)
| Question 2 | Week 3 (7 Marks) |
Godwin, Key & Associates is a small, but rapidly growing, audit firm. Its success is largely due to the growth of several clients that have been with the firm for more than five years. One of these clients, Carolina Company Ltd, is now listed on the ASX and must comply with additional reporting regulations. Carolina Company Ltd’s rapid growth has meant that it is financially stretched and its accounting systems are struggling to keep up with the growth in business. The client continuance decision is about to be made for the next financial year.
The managing partner of Godwin, Key & Associates, Rebecca Sawyer, has recognised that the audit firm needs to make some changes to deal with the issues created by the changing circumstances of its major client and the audit firm’s overall growth. She is particularly concerned that the audit firm could be legally liable if Carolina Company Ltd’s financial situation worsens and it fails.
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