Introduction

This assignment requires you document to assist the Audit Manager in planning an audit. You must refer to the relevant chapters of the textbook for information relating to audit planning.

1. Executive summary

2. Introduction

3. Key information:

a) Gain an understanding the client

b) Identify five (5) significant accounts most at risk of being materially misstated

c) Set planning materiality level

d) Identify what can go wrong (audit risk assessment) for each of the five (5) accounts selected in (b)

4. Conclusion

5. Appendix

6. References

1. For the purpose of the assignment, you assume the role of an auditor and your firm has recently been appointed as external auditor of an entity.

2. The audit fee is $75,000 and had been communicated to the client in the Engagement Letter.

3. You are required to download the 2018 annual report published by the following entity:

- KNEOMEDIA LIMITED (http:// www.kneomedia.com)

4. Using information in the relevant chapters of the textbook, the company annual report and other relevant information, preparing a document for your Audit Manager to assist him in planning the audit. Note that quoting directly from textbook does not meet the objective of the assignment.

Required

With reference to relevant chapters of the textbook document for your Audit Manager. Your document must include the followings and only use these headings:

Additional information

For the purposes of the assignment, the following auditing standards are relevant:

- ASA210 Agreeing the Terms of Audit

- ASA220 Quality Control for an Audit of a Financial Report and Other Historical Financial Information

- ASA230 Audit Documentation

- ASA250 Consideration of Laws and Regulations in an Audit of a Financial Report

- ASA300 Planning an Audit of a Financial Report

- ASA315 Identifying and Assessing the risks of Material Misstatement through Understanding the Entity and its Environment

- ASA320 Materiality in Planning and Performing an Audit

- ASA330 The Auditor's Responses to Assessed Risks

- ASA520 Analytical Procedures

Hints and Tips

1. You are required to plan the audit using only information that is publicly available. That is, you only use the information that is published by the entity either on its website or printed materials.
2. When identifying accounts most at risk of being materially misstated, you are advised to use analytical procedure - simple comparison to identifying those accounts.
3. When making preliminary judgements about materiality levels and identifying five significant accounts, you are required to consider the Statement of profit or loss, Statement of financial position and the notes.
4. To calculate materiality level for this audit assignment, you are advised to calculate 5% of total revenue, i.e. 5% of total revenue of $560,959 = $560,959 x 0.05 = $28,047.
5. In assessing what can go wrong, you are required to assess the audit risk for the five (5) significant accounts you have selected using the audit risk model. It is up to you to decide on the significant accounts you want to include in your document. However, you must justify your selection.
6. Quoting directly from textbooks and reports will increase the similarity index. Quoting without proper referencing will also increase the similarity index. As this assignment requires you to use auditing theory to a document for a real-life organisation, quoting from textbook does NOT meet the requirements. Students are advised to write their own document.
7. If you want to remove the previous version of the assignment on VU Collaborate, submit a blank assignment or a new version.