hi there i have taken auditing course from mcmaster

so part two is due but i need the full assginment done in pricribed manner please help

i have chosen tim hortons

http://www.timhortons.com/ca/en/pdf/THI_Q2_2014_10-Q.pdf

n i guess this link would me helpfull

COURSE WORK APPENDIX ACC 931- Auditing - Winter 2016 TERM ASSIGNMENTS AND GRADING Overview This document explains the requirements and grading of the main assignments for the course: Team Term Project (20% of course grade) The term project is a hands-on team exercise in planning a financial statement audit. The purpose of the project is to give you an opportunity to experience how the concepts and techniques discussed in the course are applied in auditing the financial statements of an actual business, and how an audit team works together to complete the engagement tasks. This project requires you (or your team to a max of 3) to take the role of an audit team/audit team lead doing the preliminary planning for an engagement to audit the annual financial statements of a Canadian public company. There are four parts to hand in, the requirements of each are explained in detail below. TERM PROJECT - PLANNING A FINANCIAL STATEMENT AUDIT ENGAGEMENT (20% of course grade in total) Groups were assigned in week 2. Several have decided to work individually on the project. The project involves simulating an audit firm's decision on whether to accept a new financial statement audit client (chapter 5). The simulation uses information for a Canadian public-traded company as a realistic context for applying the auditing concepts and techniques. A group of approximately four students will take on the role of an audit team assigned. You are required to develop an understanding of the company's business environment and risks (CAS 315/Ch 6), support your decision on whether or not to accept the audit engagement, develop a preliminary assessment of the risk of material misstatement, identify the most important issues that will need to be addressed in this audit, and develop a detailed audit plan that could be used to obtain evidence to support the audit opinion. You will use the company's most recent Annual Report and other publicly-available information. Detailed instructions are below. Required: This project will require a handing in 4 components: [1] a time budget for the project [2] a written report on understanding a business and the risks involved to decide whether or not to accept the engagement [3] a written report on understanding a business, its environment and assessing its risks based on analysis of three companies in the same industry [4] a written report outlining the detailed audit plan and procedures for auditing the assigned company's revenues. Page limits (excluding Appendices, etc.) Excel spreadsheet 4-5 Term mark weight 1% 4% 7-8 8% 4-5 7% For week 3 (January 27), you must select a Canadian public company, and another company in the same industry for comparison. Assume that the partner will make a final decision on whether to accept this new financial statement audit client engagement. You can assume that the predecessor auditor has communicated there is no reason not to accept the engagement and is willing to provide your firm with access to prior year working papers once it receives permission from the company. You can also assume that the 'preconditions for an audit' (see CAS 210, 4) are present for this engagement (chapter 5). Use the information provided in the companies' Annual Report, Annual Information Form, Management Discussion & Analysis, and other publicly-available documents (available on www.sedar.com) relevant to your planning process. State any other assumptions you find it necessary to make. You should not contact the organization or interview people for this project. You should not contact the actual auditors as they will need to keep all the client information confidential. For Parts 2, 3 and 4, please prepare the reports with the sections described below (approximate % marks available for each section noted in brackets; an additional overall component is awarded for exposition, spelling, etc.) Please submit only reports through the McMaster email account with a cc to all your group members where applicable. Reports should be typed, double-spaced with size 12 or larger font size with one inch margins. You can use appendices but they will not be reviewed in depth. Excess pages will NOT be marked. Please keep your own copy as the copy submitted may not be returned. The papers will be evaluated for accuracy, completeness, appropriate application of relevant course material, clarity, and presentation format; grades will be posted on the website. Your reports should also include a Title Page listing the company name(s) and names of all the team members, an Executive Summary (one page), a Table of Contents, and a List of References used - these pages do not count toward the suggest page limits. Use exhibits to present details - exhibits also do not count towards the suggested page limit. You do not need to provide a full copy of your company's Annual Report as I will read it on the SEDAR database. Part 1 - Team project plan and time budget (Due Week 4, worth 1% overall). 1. Prepare a time budget showing how you or your team will divide up the work required do this term project (see template .xls file on the course BlackBoard website). Note which team member(s) are assigned to each section(s) of the project and estimate the amount of time each will spend to complete the work. (Hint: the mark allocations are a good starting point for how divide up the work where applicable. Use an estimate of a total of 40 hours for your total available time.) Present this in your final report as Appendix 1. Please submit this Time Budget by email to the instructor no later than Week 4 before class for timely comments and feedback. Part 2 - Understanding the business, its environment and risks to accept the audit engagement. (Due Week 6 before class, worth 4% overall) Prepare a report with the following sections: (approximate % marks available for each section noted in brackets, and additional overall component awarded for exposition, spelling, etc.) Suggested page limit, excluding Appendices, Cover page, and Executive summary is four pages. 2. 3. 4. 5. 6. 7. For the company assigned, prepare an Appendix containing a copy of its balance sheet, comprehensive income statement, revenue recognition accounting policy and one other accounting policy you think important to understanding the risk of material misstatement of its financial statement at the overall level. (10%) Briefly outline the company's corporate governance structure, including the composition of its Board of Directors, Audit and other Committees of the Board. Describe who are the owners of the company. Use this information to identify key stakeholders who will use the companies' audited financial statements. The Annual Information Form on SEDAR is a good source of information for this. (10%). Identify 'those charged with governance' for this company. Provide an explanation from the CAS of what this term means to you as the audit engagement team. (20%). Explain the factors your team must consider in order to decide whether or not to accept the audit engagement, and provide your recommendation on acceptance, with supporting reasons. (20%) Determine an appropriate planning materiality level to use for planning purposes. Explain what the term materiality means, and how it will used in your audit. Justify the materiality level you have chosen using the class discussion question as a basis for this part of the project. (20%) Prepare the final printed report documents for submission, compile and edit the report for clarity, consistency and logic. Prepare cover page (must include all team members names and student numbers), executive summary, and reference list if applicable. (20%). Part 3 - Understanding the business, its environment and risks to assess the risks of material misstatement of the financial statements. (Due Week 9, worth 15% overall) To understand the company you are assigned as your potential audit client, you have also been assigned two other companies in the same industry, for comparison. For Part 3, prepare a report with the following sections: (approximate % marks available for each section noted in brackets, and additional overall component awarded for exposition, spelling, etc.) Suggested page limit, excluding Appendices, Cover page, and Executive summary is eight pages. 8. 9. 10. 11. 12. 13. For all three companies, review the Management Discussion & Analysis report that accompanies its financial statements to gain an understanding of each business and its risks. Assess all three companies' business risks by answering the following questions: What business in the company in - i.e., how does it generate revenues? What kinds of things could go wrong that would prevent its business from being successful? Refer to CAS 315 to guide your business risk assessment. In particular, CAS 315 paragraphs 11, 25 and 26, the relevant risk factors listed in its Appendix, and chapters 5 & 6 of the text will be useful for preparing this risk assessment. (20%). Perform a comparative analysis of the three companies' financial statements. You should use at least two years of data, and provide up to three Excel tables summarizing your key findings, with full explanations. Discuss how these findings affect your assessment of the risk of material misstatement at the financial statement level (i.e., which numbers in the financial statements do you think are most likely to be affected by errors or fraud?) (20%) For the one company you are potentially auditing, review the company's accounting policies for revenue recognition, and plus one other that seems most critical in this business. Comment on their appropriateness, i.e., are the policies chosen by management conservative, aggressive, in line with its industry, etc.? Assess the understandability and transparency of the company's overall financial statement presentation and disclosure - how clearly and completely does it communicate key information to users? (10%) Determine the audit risk level you are willing to accept for this engagement. Explain what audit risk is, and how it is related to the concept of reasonable assurance. Provide your audit risk decision as a percentage from 90-99%, and give reasons supporting the % you have chosen. (10%) Based on your research and business risk assessment, identify two or three \"key risk areas\" that your team would recommend that the firm audit partners focus most of their attention on. A key risk area is an account balance, transaction class, disclosure, or business process where you think there is a particularly high risk that the company's financial statements will be materially misstated, or where it will be particularly challenging to gather appropriate evidence regarding one or more assertions to lower audit risk to an acceptable level (i.e., it will be most challenging to obtain 'reasonable assurance' of fair presentation). Support the key risk areas you identified by explaining specifically how the business risks and other environment and company factors you have analyzed are linked to higher risk of material misstatement, or audit evidence gathering challenges, in these areas. (20%) Prepare the final printed report documents for submission, compile and edit the report for clarity, consistency and logic. Prepare cover page (must include all team members names and student numbers), executive summary, and reference list if applicable. (20%). Part 4 - Detailed Audit Plan with Programs for Revenue Process ( or One Other Process) (Due Week 11, worth 5% overall): For the one company you are assigned to audit, prepare a report with the following sections: (approximate % marks available for each section noted in brackets, and additional overall component awarded for exposition, spelling, etc.) Suggested page limit, excluding Appendices, Cover page, and Executive summary is four pages. 14. 15. Develop an audit program for the Revenue process (or you may choose one other important accounting process, for example purchases, inventory production, payroll, investments, etc., that you think will produce significant risk of material misstatement in this company but please discuss this with me first). List the financial statement transactions (journal entries) and balances (general ledger accounts) in the revenue/receivables/receipts (or other) accounting cycle, and the assertions related to them. Apply the audit risk model and assess the risk components for the key assertions (*i.e. assess risk of material misstatement at the assertion level). Indicate whether you would use a substantive or combined approach to audit this process. List specific audit procedures to be performed for this process, being sure to specify the type of evidence-gathering audit techniques to be used (e.g. confirmation, inspection, observation, enquiry, etc.). The procedures in your program should follow from your risk assessment for the balances and transactions in this process, and the approach you have decided to use. (80%) Prepare one final report incorporating all of the above steps. the final printed report documents for submission, compile and edit the report for clarity, consistency and logic. Prepare cover page (must include all team members names and student numbers), executive summary, and reference list if applicable. (20%)