Holmes Institute HI5026 Memo 04 – Semester 02, 2014
Background:
Mr. Howe, a Junior Partner of the CPA firm Dewey,
Cheatem, & Howe (DCH), wants you to combine and
discuss the following issues into a single coherent 1½
page training memo for new audit assistants:
1) Audit risk is a key consideration and guide to planning an
audit – explain why?
2) List the key components of the Audit Risk Model (ARM)
and discuss how they interact?
3) How can well-structured or judicious statistical sampling
cost-effectively assist with estimating the components of
the Audit Risk Model and/or resolve an unsatisfactory
outcome of that model? and
4) Discuss the key strengths of and key differences between
random sampling, haphazard sampling, and judgement
sampling and how those differences might affect the
discussion in part 3 (above).
A Full Service Creative Accounting
Firm
Loopholes Located Books Juggled Taxes Evaded
Funds Diverted Money Laundered Shortages Hidden
Pensions Plundered Credit Denied Parking Validated
Bankruptcies our Specialty!
This memo is to be answered in groups of 3-6 students, where each group will submit one
report with the names and student numbers of all group members in the heading. The
assignment is due in lecture, week 12. The marking rubric that will guide the marking is
posted to the assignment section of the HI5026 Blackboard site.