The marking rubric below sets out the requirements:

Principally you will be marked on four components:

(1)What things did the auditor do wrong/fail to do.

(2)Legal issues both from a statue perspective (corporate law) and other legal issues.

(3)Ethical issues

(4)Format, Presentation Quality and Demonstration of Research

(5 marks for each component)

As mentioned above, the assessment should be presented in an academic paper format.

A key aspect in your choice of format/layout should be to ensure you impart your key messageseffectively (i.e., complete the requirements)andefficiently(i.e.,it should be succinct and take into account the word limit).

Make sure all pages are numbered, and the text fits within the margins of your pages. Make sure to include the relevant heading.

Required:

Prepare an Academic paper analysing and critically discussing the following case in terms of legal liability, and ethical failings. What might happen to Shirley and what defences she may have, and would they work (also what does the ASIC statement "refer the matter further" mean):

Case:

Shirley Simms is asole proprietor of Sims and Coy. and registered company auditor.

In March 2020, was approached by Mr Tom Shifty of Shifty Builders Pty Ltdto audit the company. Mr Shifty explained that in a month's time he planned to float the company, and required the Audit report, and also an Investigating Accountant's Report to meet ASIC and the ASX requirements within that month. Shirley protested that the time line was short, however Tom offered her a bonus of $100,000 on top of her normal fees if she could complete the audit inside the timeline.Mr Shifty explained that her brother Mark who had just been appointed CFO of Shifty Builders Pty Ltd had recommended her. Shirley realised that this was an opportunity to expend her client base, and move into public company auditing. Further, the $100,000 would help to repay her housing loan, which due to a downturn in the economy due to COVID 19, she had found difficult to service. She also realized that she would need support to conduct the audit and placing an advertisement in a casual jobs site, soon found a recent accounting graduate, who had no audit experience, and a first year accounting student. She appointed the recent graduate as Audit Manager, and the student as his Audit Senior, and sent them off to audit Shifty Builders, while she continued with the smaller audits the firm was involved in. The six smaller audits accounted for some $60,000 per annum and together with some tax and general accounting made up the total revenue of the firm up to this point of about $150,000 per annum. She instructed the new staff, that as time was short they were to prove the assets of Shifty Builders.

The new Audit Manager sent a letter to Shifty Builders' main bankers (the XYZ Bank) asking for all details of the bank's dealings with Shifty Builders, and completed a bank reconciliation, inspected all the other assets, and wrote letters to all the listed creditors and debtors of the company. The Audit Senior ticked off a number of physical assets including 500 term deposit receipts for deposits held with the Which Bank totalling $500,000.

The two newly appointed staff returned and advised that they had found everything in order, so in early April, Shirley issued a clean audit report, and satisfactory investigating accountants report. Two weeks later the share float opened. On the 1^stMay, Shirley's brother appeared at her office ashen faced to advise that Mr Shifty could not be found, and the float trust account, which had held $5 million was empty, and he had discovered that the $500,000 of term deposit receipts was 100 copies of a $5000 term deposit receipt .

On 1^stJune a solicitor's letter arrived on behalf of the new shareholders of the company seeking reimbursement of the $5 million they had contributed to the float.

On 2^ndof June, a solicitor's letter arrived on behalf of the existing family shareholders, two of whom were also listed with ASIC as board members.

On the 5^thJune ASIC notified Shirley that they would be conducting an investigation, and may refer the matter further.

On 7^thJune, a letter arrived from the Disciplinary committee of the professional accounting body of which Shirley was a member, asking for an explanation of the news reports they were hearing.

Marking Criteria and Rubric

Met requirements of the learning outcomes a, and bto an excellent level

(80 to 100%)

Met requirement of the learning outcomes a, and b to a very good level

(70 to 79%)

Met requirementof the learning outcomes a, and b to a good level

(60 to 69%)

Met requirement of the learning outcomes a, and bto asatisfactory level

(50 to 59%)

Did not met requirement

(0 to 49%)

Part 1 (out of 10 marks)

Fully researched and thoroughly covered all Requirements in depth and detail

Soundly researched and covered all points

A good development of all points

Allpoints were covered

Did not cover all points

Part 2 (out of 10 marks)

Fully researched and thoroughly covered all Requirements in depth and

Soundly researched and covered all points

A good development of all points

Allpoints were covered

Did not cover all points

Part 3 (out of 10 marks)

Fully researched and thoroughly covered all Requirements in depth and

Soundly researched and covered all points

A good development of all points

Allpoints were covered

Did not cover all points

Part 4 (out of 10 marks)

Proper structure language and grammar and full evidence of supporting research

Proper structure and language and good evidence of research

Basic structure and grammar and evidence of research

Readable language

Some evidence of research

Poor grammar and little or no research

Grand Total Mark (Out of 40)

Unit Mark Contribution (Out of 20%)

Assessment Cover Sheet

Student ID Number/s:

Student Surname/s:

Given name/s:

Course:

School:

Unit code:

Unit title:

Due date:

Date submitted:

Campus:

Lecturer:

Tutor:

Student Declaration

I/We declare that:

1.the work contained in this assignment is my own work, except where acknowledgement of sources is made;

2.certify that this assessment has not been submitted previously for academic credit in this or any other course;

3.I have read the MIT's Plagiarism and Academic Misconduct Policy Procedure, and I/we understand the consequences of engaging in plagiarism;

4.a copy of the original assignment is retained by me and that I may be required to submit the original assignment to the Lecturer and/or Unit Co-ordinator upon request;

I have not plagiarised the work of others or participated in unauthorised collaboration when preparing this assignment.

MIT ID

Signature

Date