BUACC 5935
AUDITING AND ASSURANCE SERVICES
SEMESTER 1, 2020
GROUP ASSIGNMENT
DUE DATE AND TIME: Week 10, Sunday 31st May at 5:00 PM
(Online group submission through Moodle)
PERCENTAGE OF FINAL GRADE: 25% (25 marks) of your total marks for this unit.
Assignment Description / Requirements
• This is a group assignment. Each group must be completed in a group of 2 to 3 members. It is your responsibility to form/ join a group and to ensure that the group dynamics work.
• The assignment has two parts. All parts have to be submitted to the assignment folder. You will need to have completed topics 4-6, to complete this part of your assignment. • Word limit: 3,500 words limit (excluding references).
• Students must fully reference the sources of all materials (i.e., textbooks, journals, newspapers, internet, etc), even if you have re-expressed the ideas, facts or descriptions; acknowledge all direct quotations; and not submit their work that has been researched and written by another person. Plagiarism is heavily penalised.
• Please monitor Moodle regularly for any further instructions or announcements.
Format of the Assignment:
• Title Page - including group number, student names and student IDs.
• Part A Answer
• Part B Answer
• References
• Appendix
Submission Instructions:
This assignment is to be submitted online only. (You are not required to submit a hard copy). The completed assignment must be submitted into Assignment Dropbox on Moodle on or before the due date. Only one submission per group is required. i.e. only one student submits on behalf of all other group members.
When you are required to submit an assignment through your Moodle Unit site, you will receive an email to your Federation email address confirming that it has been submitted. Once submitted you cannot take your assignment back but you can submit another version. The most recent version submitted will be marked.
You must keep a backup copy of every assignment you submit, until the marked assignment has been returned to you. In the unlikely event that one of your assignments is misplaced, you will need to submit your backup copy.
Any work you submit may be checked by electronic or other means for the purposes of detecting collusion and/or plagiarism.
Marking, Dispute Resolution, and Free Riders:
The marking will be done for the group as a whole not on individual basis. Each group member is awarded the same mark.
Working in groups has its pros and cons. It is beneficial that you can learn a lot by discussing the issues with your fellow students. Invariably different group members bring different skills to a project; it is up to you to make the best of it. If you find your group members are “not pulling their weight” or there are problems with any member’s commitment, please try to resolve those issues amongst yourselves. Open and honest communication always helps.
If you are unable to resolve these issues, you are most welcome to see your lecturer and tutor. We will try to sort out the problems together. Do this as soon as possible and certainly before the due date. In case of any dispute among the group members or if there are any free riders identified in the group, members should report to your lecturer in writing.
Assessment Feedback:
Students who submit their work by the due date will receive their marks and feedback on BUACC 5935 Moodle site within 15 working days of the assignment submission due date.
Notes:
• There is a discussion area on Moodle titled ‘Assignment discussion Forum’. This area is for you to discuss the assignment. It is an area for students to help each other.
• The assignment is to comply with the University’s General Guide to Writing and Study
Skills, General Guide to Referencing, and Assignment Layout and Appearance Guidelines, via the links below: https://federation.edu.au/__data/assets/pdf_file/0018/190044/General-Guide-to-Writingand-Study-Skills.pdf
https://federation.edu.au/__data/assets/pdf_file/0020/313328/FedUni-General-Guide-toReferencing-2016ed.pdf
https://federation.edu.au/__data/assets/pdf_file/0017/190043/General-Guide-to-Layoutand-Appearance.pdf
• Penalties for late submission: The marking penalties will apply if you submit an assessment task after the due date without an approved extension: 5% will be deducted from available marks for each calendar day up to five days, and work that is submitted more than five days after the due date will not be marked. Requests for extension of time must be made with the lecturer concerned and based on Special Consideration guidelines. For further information on Discretionary Assessment Extensions and Special Consideration, including access to the policy, procedures or associated forms, see http://federation.edu.au/current-students/essential-info/administration/specialconsideration
• Plagiarism and collusion are forms of cheating and are considered a serious academic misconduct, and severe penalties are associated with them. Please refer to the university policy for more information. https://federation.edu.au/current-students/assistance-support-and-services/studentsupport-services/student-advisory-service/misconduct/accused-of-plagiarism-ormisconduct
• Turnitin: Students are strongly recommended to check originality through Turnitin, prior to submitting the final assessment. For more information about Turnitin and how to check for originality, refer to the following useful links:
https://fedflix.federation.edu.au/media/Uploading+to+Turnitin/0_irjuaw8p/74540772 https://federation.edu.au/current-students/learning-and-study/online-helpwith/plagiarism
https://moodle.federation.edu.au/course/view.php?id=64539
Assignment
This assignment has two parts.
Part A:
Background
According to ASA 240 The auditor’s responsibilities relating to fraud in an audit of a financial report (para. 27):
‘When identifying and assessing the risks of material misstatement due to fraud, the auditor shall, based on a presumption that there are risks of fraud in revenue recognition, evaluate which types of revenue, revenue transactions or assertions give rise to such risks.’
(https://www.auasb.gov.au/admin/file/content102/c3/ASA_240_Compiled_2019-FRL.pdf)
Required:
Write a letter to your Audit Manager Mr Bobby Brown in which you address the following:
1. Relying on the information in ASA 240 (refer to link above). Explain the difference between the responsibility of management and those charged with governance and the auditor in relation to the prevention and detection of fraud.
2. Discuss the misconception that exists in society surrounding the role of the auditor in relation to the prevention and detection of fraud in an audit of financial statements.
3. Provide three reasons why an auditor presumes that there are potential risks of fraud relating to revenue recognition in entities. Make sure that you explain your reasons clearly.
4. Provide two case examples of revenue misstatements that have been reported in the media.
(1,200-1,500 words) (8 + 8 + 6 + 8 = 30 marks)
Part B:
Based on the 31 December 2019 Annual Report for Woodside Petroleum Limited (available on Moodle), prepare a planning memorandum for the audit partner which includes the following:
Required:
1. Identify four major business risks of Woodside and provide a detailed explanation of why each factor is identified as a risk to the business.
2. Results of analytical procedures. It is recommended that you prepare a trend analysis and prepare key ratios (Examples of a trend analysis and ratio analysis are available on Moodle). Identify and explain which changes in the trend analysis and ratio analysis would trigger further investigation in the audit for Woodside. (Please include your workings in the Appendix).
3. Identify four inherent risks that you identify from business risks and analytical procedures in parts 1 and 2. (Note: business risks are not the same as inherent risks).
4. Identify a key account and a key related assertion at risk of material misstatement based on the inherent risks you identify in part 3. (Note: Identify a key account and a key assertion for each of the four inherent risks identified in part 3).
5. Calculate planning materiality in a $ amount. You must include a breakdown of your calculation and a justification of your choice of base, the percentage used and your assessment of detection risk. Assume control risk is high.
(1,800-2,000 words) (12 + 20 + 12 + 8 + 8 = 60 marks)
Total of 90 marks will be scaled to a mark of 25%.
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