Assessment Description This assessment is designed to test your ability to apply the knowledge gained from ACCM4400 workshops during the semester, in identifying assertions at risk and developing appropriate audit procedures. This will be done by analysing available information of an Australian company (hereinafter referred to as The Company) that is listed on the ASX. The name of The Company will be made available on the Assessments page of MyKBS for ACCM4400 on Friday of Week 10 and you must submit your report at 19:55 (AEST) on Tuesday of Week 13. 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 groups responses to the application of the questions to the sample case. It is expected that the discussions during Workshops 6 and 12 will clarify the expectations and requirements for performing at a high standard in this assessment. Please remember that this is an INDIVIDUAL ASSESSMENT and must be based on The Company, name of which will be released at 08:00 (AEST) on the Friday of Week 10. ACCM4400 Page 2 Case Study Learning Objectives: After completing this assessment, you will be able to: 1) Research information about the selected company (using multiple sources) 2) Address particular areas of the audit process and develop appropriate audit procedures 3) Develop professional report-writing skills Assessment Question: During your semester break, you participated in a vacation program at a local audit firm. During the vacation program, you assisted an audit senior on the planning of a medium sized company, including developing appropriate substantive audit procedures. You have one more semester to complete your post graduate course and have indicated to the audit manager that you would like to work on a full-time basis at the audit firm on completion of you course. The audit manager has asked you to write a report as part of the process of determining 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 and developing appropriate substantive procedures as well as your report writing skills. You are required to address the following in your report (refer to rubrics on page 5 & 6 of this document for breakdown of marks and achievement criteria by component): 1. 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 that you have identified. 2. Describe in detail, the appropriate substantive procedure that will address each of the 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 be able to carry out the procedures correctly. 3. Refer to additional requirements on the next page. ACCM4400 Page 3 Case Study Additional Requirements: 1) Do not use the same combination of account balance/class of transaction and assertion as used in the sample case study discussed in week 6 and week 12 (Refer to workshop notes for week 6 and 12). 2) Do not repeat the same combination of account balance/class of transaction and assertion in your answers. For example, if you have identified existence of inventory as the assertion and account balance at risk of misstatement for your first business risk identified, do not use 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 existence of a different account balance to be at risk of misstatement. Remember though, that whatever account balance/class of transaction and assertion that 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. 3) You must include the following in your report: a) Title page b) Table of contents c) Executive summary d) Introduction e) Body of report f) Conclusion g) References Possible Sources of Information: Sources of information for this assessment may include: 1. The latest annual report of The Company 2. The Company website 3. Announcements on ASX with regards to The Company 4. News articles on The Company 5. Corporate Governance statements of The Company ACCM4400 Page 4 Case Study Important Study Information Academic Integrity Policy KBS values academic integrity. All students must understand the meaning and consequences of cheating,plagiarism and other academic offences under the Academic Integrity and Conduct Policy. What is academic integrity and misconduct? What are the penalties for academic misconduct? What are the late penalties? How can I appeal my grade? Click here for answers to these questions: http://www.kbs.edu.au/current-students/student-policies/. Word Limits for Written Assessments Word limit is 1,800 words (max.). Do not include title page, table of contents, executive summary and reference list in the word count. Submissions that exceed the word limit by more than 10% will cease to be marked from the point at which that limit is exceeded. Study Assistance Students may seek study assistance from their local Academic Learning Advisor or refer to the resources on the MyKBS Academic Success Centre page. Click here for this information. ACCM4400 page 5 Case Study ACCM4400 Individual Case Study Rubric: 40% Components High Distinction 85 100% (Marks 17 - 20) Distinction 75 - 84% (Marks 15 - 17) Credit 65 74% (Marks 13 - 15) Pass 50 64% (Marks 10 - 13) Fail 0 49% (Marks 0 - 10) Mark Awarded (Out of 20) Question 1: Risk identification and link to class of transaction/ account balance and assertion Appropriate business risks are identified and all of it accurately linked to class of transaction/account balance and assertion. Reasoning for link is well written and explained in a logical manner displaying an outstanding understanding. Appropriate business risks are identified and mostly accurately linked to class of transaction/account balance and assertion. Reasoning for link is reasonably well written and explained in a logical manner displaying a good understanding. Mostly appropriate business risks are identified and mostly accurately linked to class of transaction/account balance and assertion. Reasoning for link is not elaborated adequately displaying only a satisfactory understanding. Mostly appropriate business risks are identified but not all accurately linked to class of transaction/account balance and assertion. Reasoning for link is very brief displaying a less than satisfactory understanding. Lack of understanding of business risk and hardly able to link risk to misstatements or not at all. /20 High Distinction 85 100% (Marks 10.2 - 12) Distinction 75 - 84% (Marks 9 - 10.2) Credit 65 74% (Marks 7.8 - 9) Pass 50 64% (Marks 6 - 7.8) Fail 0 49% (Marks 0 - 6) Mark Awarded (Out of 12) Question 2: Appropriate Substantive procedures Substantive procedures are accurate and suitable to identified class of transaction/ account balance and assertion. Procedures described comprehensively and instructions are precise. Substantive procedures are logical and mainly suitable to identified class of transaction/ account balance and assertion. Procedures described sufficiently and instruction are logical. Substantive procedures are mostly accurate and suitable to identified class of transaction/ account balance and assertion. Procedures described partially and instruction are basic. Substantive procedures partially accurate and not always suitable to identified class of transaction/ account balance and assertion. Procedures described superficially and instruction are sometimes inaccurate. Substantive procedures are largely unsuitable to identified class of transaction/ account balance and assertion. Procedures are hardly described and instruction are mostly/always inaccurate. /12 ACCM4400 page 6 Case Study High Distinction 85 100% (Marks 6.8 - 8) Distinction 75 - 84% (Marks 6 6.8) Credit 65 74% (Marks 5.2 - 6) Pass 50 64% (Marks 4 5.2) Fail 0 49% (Marks 0 - 4) Mark Awarded (Out of 8) Overall Presentation, Language and Grammar Presentation, formatting and structure on par with highest professional standards. Exceptional and eloquent use of the English language presented clearly, sequentially and without errors in grammar and referencing. Only minor improvements are needed in presentation, formatting and structure for high professional standards to be met. An excellent use of the English language though minor improvements needed in clarity, sequence, grammar and referencing. An inconsistent application of professional standards of presentation, formatting and structure. A solid use of the English language through obvious inconsistencies exists in terms of clarity, sequence, grammar and referencing. Major improvements are needed in terms of presentation, formatting and structure. An acceptable level of English with major improvements required in terms of clarity, sequence, grammar and referencing. Unprofessional presentation and formatting with a structure that does not flow. The application of the English language is difficult to follow and the standard of clarity, sequence, grammar and referencing is below that which would be acceptable by a professional body. /8 TOTAL MARKS (out of 40 marks)