Kogan is the subject of this audit.
Distinguish between analytical procedures required by ASA315 and ASA5204 You have learned that ASA 315 stipulates analytical procedures be used as risk assessment procedures, while ASA 520 stipulates their use as substantive procedures. The standards also discuss the nature and purpose, extent of reliance on analytical procedures and subsequent investigation of unusual items identified. Using the financial report/statements of the company that your Group Assignment and Presentation has chosen: a) identify and briefly explain one way you could use analytical procedures as risk assessment procedures, and b) identify and briefly explain one way you could use analytical procedures as substantive procedures during the audit. This requires you to use the material from your chosen company to illustrate the application of ASA 315 and ASA 520, using Analytical Procedures to the audit process. You are asked to provide examples from the financial statements to support your explanation. e Use the following templates for your answers." Analytical procedures as risk assessment procedures (ASA315) Analytical Procedure Explanation (a) a Analytical procedures as substantive procedures during audit (ASA520) Analytical Procedure Explanation (b) Section 1 - Assessment Marking Criteria (4 marks) Requirement Content Marks Analytical procedures as risk assessment Analytical procedures as substantive procedure- An example from your 0.5 mark for the example + 1.5 Group chosen company marks for an explanation in context to the given example. An example from your 0.5 mark for the example + 1.52 Group chosen company marks for an explanation in context to the given example. Deduct up to 12 Presentation and clarity Assess audit risk, list key assertions and audit evidence of the chosen company From the information available in relation to your chosen company in your Group Assignment: a) Assuming that going concern is not an issue, identify one key asset accounts at risk. This will be from the Statement of Financial Position (Balance Sheet). b) For the asset account identified above: i. Provide a brief explanation as to why the asset account is at risk; ii. List ONE key assertion (as per ASA315.A128) where the audit effort should be concentrated; and iii. Describe one substantive test of detail you would perform to gather sufficient appropriate evidence in relation to the assertion identified in ii. above. c) Identify one Statement of Comprehensive Income (Income Statement) expense account at risk, which is unrelated to the asset accounts identified in a) above. Provide a brief explanation of why it is at risk and list ONE key assertion (as per ASA315.A128) at risk. Use the following template for Parts a) & b): b(iii). a. b(i). Asset Explanation Account why a risk b(ii). - Key Assertion (Identify ONE assertion audit should be concentrated - See ASA315.A128(b) Substantive test of detail (Describe ONE Use the following template for Part c): Expense account Explanation why a risk Key Assertion (Identify ONE assertion for expense account - See ASA315.A128(a)) Note: ASA315 and ASA520 can be viewed online from the AUASB website. Part 2 - Assessment Marking Criteria (6 marks) Requirement Content Marks An asset account. You must explain why 0.5 mark for identifying asset (This account must be you think the particular account at risk from your Group chosen account is at risk. company) 1.5 marks for explanation of why account is at risk. Only ONE assertion needs to be identified. 1 mark for identifying key assertion as per ASA315.A128(b) (2021) + No mark if more than one relevant assertion provided. Substantive test must be relevant to the account chosen and not from the textbook. An expense account. (This You should identify 0.5 mark for identifying expense account must be from your relevant key assertion account Group chosen company) from classes of transactions only in this 1.5 marks for explanation of why section such as account is at risk. occurrence, completeness, accuracy, 1 mark for identifying key assertion cut-off, classification and as per ASA315.A 128(a) (2021) presentation (less likely). { No mark if more than one relevant assertion provided. Presentation and clarity Deduct up to 12 Distinguish between analytical procedures required by ASA315 and ASA5204 You have learned that ASA 315 stipulates analytical procedures be used as risk assessment procedures, while ASA 520 stipulates their use as substantive procedures. The standards also discuss the nature and purpose, extent of reliance on analytical procedures and subsequent investigation of unusual items identified. Using the financial report/statements of the company that your Group Assignment and Presentation has chosen: a) identify and briefly explain one way you could use analytical procedures as risk assessment procedures, and b) identify and briefly explain one way you could use analytical procedures as substantive procedures during the audit. This requires you to use the material from your chosen company to illustrate the application of ASA 315 and ASA 520, using Analytical Procedures to the audit process. You are asked to provide examples from the financial statements to support your explanation. e Use the following templates for your answers." Analytical procedures as risk assessment procedures (ASA315) Analytical Procedure Explanation (a) a Analytical procedures as substantive procedures during audit (ASA520) Analytical Procedure Explanation (b) Section 1 - Assessment Marking Criteria (4 marks) Requirement Content Marks Analytical procedures as risk assessment Analytical procedures as substantive procedure- An example from your 0.5 mark for the example + 1.5 Group chosen company marks for an explanation in context to the given example. An example from your 0.5 mark for the example + 1.52 Group chosen company marks for an explanation in context to the given example. Deduct up to 12 Presentation and clarity Assess audit risk, list key assertions and audit evidence of the chosen company From the information available in relation to your chosen company in your Group Assignment: a) Assuming that going concern is not an issue, identify one key asset accounts at risk. This will be from the Statement of Financial Position (Balance Sheet). b) For the asset account identified above: i. Provide a brief explanation as to why the asset account is at risk; ii. List ONE key assertion (as per ASA315.A128) where the audit effort should be concentrated; and iii. Describe one substantive test of detail you would perform to gather sufficient appropriate evidence in relation to the assertion identified in ii. above. c) Identify one Statement of Comprehensive Income (Income Statement) expense account at risk, which is unrelated to the asset accounts identified in a) above. Provide a brief explanation of why it is at risk and list ONE key assertion (as per ASA315.A128) at risk. Use the following template for Parts a) & b): b(iii). a. b(i). Asset Explanation Account why a risk b(ii). - Key Assertion (Identify ONE assertion audit should be concentrated - See ASA315.A128(b) Substantive test of detail (Describe ONE Use the following template for Part c): Expense account Explanation why a risk Key Assertion (Identify ONE assertion for expense account - See ASA315.A128(a)) Note: ASA315 and ASA520 can be viewed online from the AUASB website. Part 2 - Assessment Marking Criteria (6 marks) Requirement Content Marks An asset account. You must explain why 0.5 mark for identifying asset (This account must be you think the particular account at risk from your Group chosen account is at risk. company) 1.5 marks for explanation of why account is at risk. Only ONE assertion needs to be identified. 1 mark for identifying key assertion as per ASA315.A128(b) (2021) + No mark if more than one relevant assertion provided. Substantive test must be relevant to the account chosen and not from the textbook. An expense account. (This You should identify 0.5 mark for identifying expense account must be from your relevant key assertion account Group chosen company) from classes of transactions only in this 1.5 marks for explanation of why section such as account is at risk. occurrence, completeness, accuracy, 1 mark for identifying key assertion cut-off, classification and as per ASA315.A 128(a) (2021) presentation (less likely). { No mark if more than one relevant assertion provided. Presentation and clarity Deduct up to 12
