ACC568 - Auditing Session 2 2015 Faculty of Business School of Accounting and Finance Internal Mode Subject Overview[Show] Lecturer Details[Show] Learning, Teaching and Support Strategies[Show] Text and Learning Materials[Show] Schedule[Show] Assessment Information[Show] Assessment Items[Hide] Item number Title Type Value Due date* Return date** 1 Developing and aswering multiple choice questions Assignment 10% Variable Variable 2 Case Study and Report Assignment 10% 23-Aug-2015 13-Sep-2015 3 Report and Case Studies Assignment 20% 13-Sep-2015 04-Oct-2015 4 Final Exam Exam 60% To be Advised. - * due date is the last date for assessment items to be received at the University ** applies only to assessment items submitted by the due date Assessment item 1 Developing and aswering multiple choice questions Value: 10% Due date: Variable Return date: - Submission method options Alternative submission method Task This session, we will be using an online system called PeerWise that lets you submit multiple choice questions (MCQs) and answers and rate other students' MCQs. Your activity in PeerWise is worth 10% of your final subject grade. To earn the 10%, you must contribute to PeerWise by writing questions that directly address a number of learning outcomes, answering questions and rating questions. I will advise you through an Announcement when the student numbers have been loaded into the site. Then you need to visit the following website: http://peerwise.cs.auckland.ac.nz/ . If this link fails please cut and paste the link into your internet browser. If you have enrolled late, please let me know so that your student number can be added to the site. If you have not used PeerWise before, just click the "Registration" link and follow the prompts. All you need to do is choose a user name and a password for your PeerWise account. If you have used PeerWise before, simply log in and then select "Join course" from the Home menu. To access our course, you will need to enter two pieces of information: 1) Course ID = xxxx This will be provided to you in the first week of the session. 2) Identifier = Your student number for this subject - please be careful, if you enter your student number incorrectly, you will not be awarded marks for this assignment. Over the session you need to create 5 multiple choice questions and answer 50 questions. You need to create 1 question by the end of week 2 to give fellow students time to attempt your questions and grade them. Try and answer 10 questions by the end of week 3. If you need help, please email me. I have set out a table below to help you time your question writing and answering. You will find at the beginning of each topic details of the subject learning outcomes addressed in the topic. These MCQs must address the learning outcomes listed under Rationale below. An explanation of the correct answer must also be provided. Within the explanation, the sources of information you used to develop the MCQ (e.g. lecture notes and/or textbooks) should be indicated. This will allow other students to further investigate the concepts covered in the MCQ. To encourage everyone to participate equally, all activity on PeerWise is anonymous however I am able to track contributions. Offensive comments or questions will not be tolerated. The following schedule provides details about when relative PeerWise tasks need to be completed. Date Due No. Questions created No. Questions answered and commented Subject learning outcome and Topics 10 August 1 be able to exercise critical and reflective judgement and appreciate the value of ethical practice. 17 August 10 7 September 1 be able to explain and critically evaluate influences on audit and assurance services including: Australian and international professional standards, statutory and common laws, regulatory bodies, and public expectations within a global market; 14 September 10 21 September 1 be able to demonstrate risk management methodologies and the role of internal controls in an audit context; 10 28 September 2 be able to design an audit plan and select and apply appropriate audit procedures for a financial statement audit be able to evaluate the expanding scope of assurance services and providers in today's international business environment; 20 Rationale There are a number of reasons for asking you to write your own questions. Firstly, the ability to write a good question means that you have understood the topic. When you write your alternate answer choices you show evidence of deep learning because you understand possible misconceptions. You will also get feedback on your questions from your fellow students. It has been shown that feedback that is given often and quickly is important for learning. The more questions you attempt, the better your grasp will be of the core concepts in this subject. The following learning outcomes are addressed by this assessment activity: be able to explain the role of assurance services and providers; be able to identify and evaluate the influences on the audit processes, including the Corporations Act, Common Law, Australian and International professional standards, professional bodies and public expectations within a global market; be able to appraise the client's business environment and apply the risk model; be able to explain, select and apply procedures involved in the audit process; and be able to appraise the expanding scope of auditing in the current international business environment. Marking criteria You will be graded by your peers! The more questions you attempt and provide feedback on, the more accurate the marks of your class mates will be. Your mark will be based on participation (see below), not the individual questions scores. To achieve a high score, it’s much better to write good quality questions that directly and clearly address the learning objectives. This can be difficult at first, but as you start writing questions on each topic, it will get easier. If you are having difficulty, I suggest drafting the question first on paper before adding it to PeerWise. These MCQs must address the learning outcomes as per the Rationale above. An explanation of the correct answer must also be provided. Within the explanation, the sources of information you used to develop the MCQ (e.g. lecture notes and/or textbooks) should be indicated. This will allow other students to further investigate the concepts covered in the MCQ. When rating a question, you should be judging three things: 1. Does the question address one or more of the subject learning outcomes? 2. Is the question of high enough quality that it could appear in the final exam? 3. Is the explanation provided with the question sufficient so that if someone answered the question incorrectly the explanation would help them to understand what they have done wrong? When making these judgments consider the following: 1. The quality of a question relates to how well it is composed. It should be clear in its intent, that is the question should not be ambiguous. It should be phrased so that it has only one possible answer. The question should directly and clearly relate to a key concept covered in the subject learning outcomes. 2. You should not rate questions differently based on their difficulty – an easy question is just as useful at helping others understand the material as a hard question. 3. Be fair with your ratings – you MUST justify a poor rating with a comment to the author of the question, or by agreement with a previously written comment making sure any comments you provide are constructive – you are rating questions written by your peers so provide the kind of feedback that you would find useful and encouraging yourself. As you contribute to PeerWise, you will accumulate a reputation score which is composed of three components: the first component is for question authoring; the second component is for answering questions; and the third component is for rating questions they have answered. A given student's component scores increase whenever the actions of other students generally agree with that students earlier decisions. In this sense, to accumulate high component scores, you are encouraged to make thoughtful contributions as early as possible (which are therefore more likely to agree with the decisions that other students make later on). The total score is calculated using a formula that combines the component scores such that to achieve a high total score it is much better to have good scores for each component rather than a very high score in just one (or two) components. You will gain a mark out of 10% that will appear in Grade Centre after the assignment has closed. This will be calculated as follows: Mark out of 10 PeerWise Reputation Score FL-HD 10 1850 + HD 9 1750 - 1849 HD 8 1500 - 1749 DI 7 1250 - 1499 CR 6 1000 - 1249 PS 5 750 - 999 PS 4 500 - 749 FL 3 250 - 499 FL 2 100 - 249 FL 1 below 100 FL 0 zero FL In order to pass this assignment, you need to accumulate a PeerWise Reputation Score of more than 749. Note that you can see your total score in the top right hand corner of the PeerWise screen when you are logged in. If you find a question that you feel is not related to a subject learning objective or you feel is offensive you can, within the software, mark the question as inappropriate. Do send an email to me to alert me about this. Any questions that are off topic will be deleted and no marks will be awarded for writing, answering, or rating questions that are not addressing the learning objectives. Just a reminder, plagiarised material is not acceptable. If you have copied a question from a website or another source directly, you must reference the material you have used. Word for word copying is not acceptable and will be detected by Turnitin. We will be downloading all questions from the site and checking these for plagiarised material. This only applies to material copied from external sources, we are aware that there may be similar questions in PeerWise that have been authored separately. Assessment item 2 Case Study and Report Value: 10% Due date: 23-Aug-2015 Return date: 13-Sep-2015 Submission method options Alternative submission method Task Question 1 5% Read the following case and answer the question below: Case: Jenny Tenterfield spent the 30th June performing inventory observation procedures. This included taking test measurements at a client’s grain storage tower in a small regional town. Jenny had measured grain inventories on two previous audits and was the in-charge accountant on this audit. Jenny’s observations of the quantity of the grain fell 10% below the client’s records. Jenny’s attention was drawn to the discrepancy between the two measurements of what was in the tower because, in her judgment, such a gap was significant enough to be material. The resulting difference between the inventory as reported by the client and the audited amount was enough to cause a significant drop in net income. Jenny documented her findings in the working papers and proposed an adjusting entry for the difference. After further investigation Jenny found that a discrepancy in the grain inventory had occurred two months previously. The quantity of the grain inventory as reported by a government inspector at the time was also lower than that on the client’s records. The difference on the inventory valuation, however was not as great as that in Jenny’s test. No adjustment to the client’s records had been made at that time. This information was included in the working papers. Before discussing the discrepancy with the client, Jenny told Greg, the engagement partner, about the problem. Greg, who had substantial experience in the industry, advised Jenny that this would be a sensitive issue with the client. He also pointed out that the grain inventories are notoriously difficult to measure, with the potential errors as large as 10%. Greg promised that he would handle the matter personally and therefore told Jenny not to discuss the matter with the client. The partner kept the inventory working papers. After completion of the field work, Jenny returned to the office to wrap up her work on the engagement. The inventory working papers were still not in the file. Upon Jenny’s enquiry the partner handed her a new set of working papers. These working papers which had been dated as at the audit date had been signed off by Greg and substantiated the book amount. Jenny’s subsequent questioning of the partner revealed that Greg had personally performed additional work on the grain inventory after the client’s year–end. Based on his own evidence gathering the partner had substituted his own working papers for the documentation that Jenny had prepared. No evidence remained of Jenny’s proposed adjustments. An unmodified opinion was subsequently issued. Required What should Jenny do? Use the Accounting and Professional Ethical Standards and one of the ethical decision models presented in your text to help you answer the question. An example is provided below using the American Accounting Association (AAA) Model. You can use any of the models from the textbook; you do not have to use the AAA model. American Accounting Association Model Decision making process 1. Determine the facts The facts are: …. 2. Define the ethical issues The ethical issues are… The stakeholders are… Question 2 5% Task Prepare a report for your fellow students that: a) Describes the development of the internationalisation of auditing. b) Evaluates the need for the internationalisation of auditing. c) Identifies barriers to the internationalisation of auditing. Rationale This assessment has been designed to assess your ability to: • Be able to explain and critically evaluate influences on audit and assurance services including: Australian and international professional standards, statutory and common laws, regulatory bodies, and public expectations within a global market; • Be able to exercise critical and reflective judgment and appreciate the value of ethical practice. Marking criteria Question 1 Criteria HD (42-50) Distinction (37-41) Credit (32-36) Pass (25-31) Description of the ethical decision guide that you are using (10 Marks). Highly detailed and relevant description of the ethical decision guide demonstrating a highly sophisticated level of understanding. A complex and explicit statement as to why this guide was chosen for this dilemma is included. Good description of the ethical decision guide demonstrating a good level of understanding. A clear statement as to why this guide was chosen for this dilemma is included. Clear description of the ethical decision guide demonstrating an effective level of understanding. Basic description of the ethical decision guide demonstrating a simple level of understanding. Application of the ethical decision guide that you are using (30 Marks). Complex and detailed application of the ethical decision guide demonstrating deep understanding of the use of the guide. There are extensive relevant references to ethical and auditing standards. Logical application of the ethical decision guide demonstrating clear understanding of the use of the guide. There are a number of relevant references to ethical and auditing standards. Minor problems with the application of the ethical decision guide. There are some relevant references to ethical and auditing standards. Ethical decision guide partially applied including some references to ethical and auditing standards. Professional communication (Note: you are required to space between paragraphs; use Arial 10pt or TNR 12 pt; use 1.5 or double line spacing) (5 Marks). Work contains distinct understandable statements with no errors. There is a sophisticated use of language. Extremely well organised. Content is structured in a manner that facilitates the reader’s understanding. Work contains distinct understandable statements with minimal errors. Answer is well organised. Content is structured in a manner that facilitates the reader’s understanding. Minor spelling, grammar and punctuation errors. Work shows evidence of proofreading. Well-structured with one main idea or argument provided per paragraph arguments/ideas. Some spelling, grammar and punctuation errors found but the work is readable and structured. Work may include too many ideas in one paragraph. Appropriate resources and correct referencing (5 Marks) Used four or more sources. All work has been referenced correctly as per APA (6th edn) requirements. Used two or more sources. All work has been referenced correctly as per APA (6th edn) requirements. Used one or more sources. All work has been referenced within the body of the answer and in the reference list, with some omissions or errors in terms. No additional sources other than the text used. Others’ work is not always acknowledged and there are a number of errors or non-compliance with the APA (6th edn). Question 2 Criteria HD (42-50) Distinction (37-41) Credit (32-36) Pass (25-31) Description of the development of the internationalisation of auditing (10 Marks). Identification of at least 5 activities that have led to the development of the internationalisation of auditing. A deep understanding of the interrelationship of these activities is demonstrated. Identification of at least 4 activities that have led to the development of the internationalisation of auditing. A clear understanding of the interrelationship of this activities is demonstrated. Identification of at least 3 activities that have led to the development of the internationalisation of auditing. Some attempt is made to describe the interrelationship of these activities. Identification of at least 2 activities that have led to the development of the internationalisation of auditing. Evaluation of the need for the internationalisation of auditing (10 Marks). A complex and highly detailed evaluation of the need for the internationalisation of auditing is presented. A logical attempt to evaluate the need for the internationalisation of auditing is presented. A good attempt to explain the need for the internationalisation of auditing is presented. Some attempt to explain the need for the internationalisation of auditing is presented. Identification of the barriers to the internationalisation of auditing (10 Marks). Identification of the range of barriers to the internationalisation of auditing is presented demonstrating a deep understanding of the issues. Identification of many of the barriers to the internationalisation of auditing is presented demonstrating a good understanding of the issues. A number of the barriers to the internationalisation of auditing are presented. Some attempt to identify the barriers to the internationalisation of auditing is presented. Professional communication (Note: you are required to space between paragraphs; use Arial 10pt or TNR 12 pt; use 1.5 or double line spacing) (5 Marks). Work contains distinct understandable statements with no errors. There is a sophisticated use of language. Extremely well organised. Content is structured in a manner that facilitates the reader’s understanding. Work contains distinct understandable statements with minimal errors. Answer is well organised. Content is structured in a manner that facilitates the reader’s understanding. Minor spelling, grammar and punctuation errors. Work shows evidence of proofreading. Well-structured with one main idea or argument provided per paragraph arguments/ideas. Some spelling, grammar and punctuation errors found but the work is readable and structured. Work may include too many ideas in one paragraph. Appropriate resources and correct referencing (5 Marks). Used four or more sources. All work has been referenced correctly as per APA (6th edn) requirements. Used two or more sources. All work has been referenced correctly as per APA (6th edn) requirements. Used one or more sources. All work has been referenced within the body of the answer and in the reference list, with some omissions or errors in terms. No additional sources (other than the textbook) used. Others’ work is not always acknowledged and there are a number of errors or non-compliance with the APA (6th edn). Assessment item 3 Report and Case Studies Value: 20% Due date: 13-Sep-2015 Return date: 04-Oct-2015 Submission method options Alternative submission method Task Question 1 7% It has been suggested that independence of auditors is compromised through the business risk audit approach. Task Prepare a report that: a) Explains and evaluates the need for audit independence b) Briefly describes the business risk audit approach c) Evaluates the impact that this approach has on the independence of auditors. Question 2 7% Case You are currently planning the audit of Wood Art Furniture Pty Ltd. You have calculated the following ratios in order to assist you in identifying potential audit risk areas: Ratio Unaudited 30/6/15 Audited 30/6/14 Industry average Cost of goods sold/sales (%) 60 75 69.24 Operating expenses/sales (%) 12 14 14.81 Selling and Administrative expenses/sales (%) 3 5 4.90 Interest expense/sales (%) 7 1.5 5.23 Total cost/sales (%) 85 95.5 93.25 Profit/sales (%) 5 4.5 5.15 Inventory turnover (times per year) 1.96 1 2.15 Accounts receivable turnover (days) 75 95 75.00 Current assets/current liabilities 2 1.2 1.45 Receivables/current liabilities .25 .25 0.40 Profit/capital (% per year) 13 11 18.19 Times dividend earned 1.6 2 1.80 In addition you have the following information: Wood Art Furniture Pty Ltd is a large proprietary company involved in the manufacture and wholesale of high end wooden furniture such as expensive dining tables and chairs and desks. The company was growing well in previous years but growth appears to have stopped in 2014 but has picked up again in 2015. Current year operating profit has increased by nearly 15% while sales have fallen slightly from last year’s levels. A computerised wood cutting machine purchased in January 2014 was found to be defective and could not be made to work properly. A replacement machine was purchased from another supplier as Wood Art could not afford to be without a computerised cutting machine and no longer trusted the reliability of the original supplier’s machines. Wood Art are currently negotiating with the supplier of the first machine for a refund. The supplier does not want to give a refund, instead they want to replace the machine. In order to finance both computerised machines Wood Art doubled its bank loan. Industry average data was obtained from the Australian Bureau of Statistics, and is calculated using figures from all furniture manufacturing companies in Australia. Your assistant has reviewed the data and made the following notes: Cost of goods/sales, operating expenses/sales, and selling and admin expenses /sales have all fallen, indicating an improvement in management efficiency. In addition, these ratios are all lower than industry averages, indicating Wood Art Pty Ltd has good cost control measures in place. The inventory turnover ratio has fallen, indicating that inventory is held for less time than prior years. This should lessen our concerns regarding obsolescence. Debtors are now being collected 20 days (or 16%) faster than the prior year, reducing cash flow concerns and lessening pressure on the provision for doubtful debts. Current assets to current liabilities has increased, indicating an improvement in Wood Art Pty Ltd’s liquidity position. In addition, this ratio is above industry average. Required a) Examine the ratios that your assistant has prepared and the validity of your assistant’s comments, and where appropriate provide an alternative interpretation and analysis. b) Evaluate the implications of your analysis on the year-end audit testing. Adapted from the Professional Year Programme of The Institute of Chartered Accountants in Australia - 2000 Accounting 2 Module Question 3 6% The following are misstatements that have occurred in Fresh Foods Co-operative, a retail and wholesale food business: 1. The incorrect price was used on sales invoices for billing shipments to customers because the wrong price was entered into the computer master file of prices. 2. A vendor’s invoice was paid twice for the same shipment. The second payment arose because the vendor sent a duplicate copy of the original 2 weeks after the payment was due. 3. A vendor was paid for the full amount on the invoice but the vendor then complained that the full payment was not received. The vendor then discovered that their billing department had added goods to the invoice after the original invoice was sent to Fresh Foods. Fresh Foods has no evidence that these goods were received. 4. During the physical count of inventory, one counter wrote down the wrong description of several products and miscounted the quantity. 5. A salesperson sold an entire carload of lamb at a price below cost because she did not know the cost of lamb had increased in the past week. 6. On the last day of the year, a truckload of beef was set aside for shipment but was not shipped. Because it was still on hand it was counted as part of the inventory. The shipping document was dated the last day of the year, so it was included as a current-year sale. 7. An accounts payable clerk processed payments to himself by adding a fictitious vendor address to the approved vendor master file Required a) For each misstatement, identify one or more types of controls that were absent. b) For each misstatement, identify the transaction- related audit objectives that have not been met. c) For each misstatement, suggest a control to correct the deficiency. Rationale This assessment has been designed to assess your ability to: • be able to demonstrate risk management methodologies and the role of internal controls in an • audit context; • be able to design an audit plan and select and apply appropriate audit procedures for a financial • statement audit; • be able to explain and critically evaluate influences on audit and assurance services including: Australian and international professional standards, statutory and common laws, regulatory bodies, and public expectations within a global market; • be able to exercise critical and reflective judgment Marking criteria Question 1 Criteria HD (42-50) Distinction (37-41) Credit (32-36) Pass (25-31) Explanation and evaluation of need for audit independence (20 Marks). Complex and highly detailed explanation and clear critical evaluation of need for audit independence. Clear and detailed explanation and evaluation of need for audit independence. Clear explanation with some evaluation of need for audit independence. Basic explanation with little evaluation of need for audit independence. Brief description of the business risk audit approach (10 Mark) Logical and detailed description of the business risk audit methodology demonstrating deep understanding of the process. Clear and detailed description of the business risk audit methodology demonstrating a clear understanding of the process. Clear description of the business risk audit methodology demonstrating understanding of the process. Basic description of the business risk audit methodology demonstrating some understanding of the process. Evaluation of the impact that the business risk approach has on the independence of auditors (25 marks). Well structured and highly detailed evaluation of the impact that the business risk approach has on the independence of auditors demonstrating a deep understanding of the influences on audit services. Clear and detailed evaluation of the impact that the business risk approach has on the independence of auditors demonstrating a good understanding of the influences on audit services. A reasonable evaluation of the impact that the business risk approach has on the independence of auditors demonstrating a moderate understanding of the influences on audit services. Some attempt to evaluate the impact that the business risk approach has on the independence of auditors demonstrating little understanding of the influences on audit services. Professional communication (Note: you are required to space between paragraphs; use Arial 10pt or TNR 12 pt; use 1.5 or double line spacing) (5 Marks). Work contains distinct understandable statements with no errors. There is a sophisticated use of language. Extremely well organised. Content is structured in a manner that facilitates the reader’s understanding. Work contains distinct understandable statements with minimal errors. Answer is well organised. Content is structured in a manner that facilitates the reader’s understanding. Minor spelling, grammar and punctuation errors. Work shows evidence of proofreading. Well-structured with one main idea or argument provided per paragraph arguments/ideas. Some spelling, grammar and punctuation errors found but the work is readable and structured. Work may include too many ideas in one paragraph. Appropriate resources and correct referencing (5 Marks). Used four or more sources. All work has been referenced correctly as per APA (6th edn) requirements. Used two or more sources. All work has been referenced correctly as per APA (6th edn) requirements. Used one or more sources. All work has been referenced within the body of the answer and in the reference list, with some omissions or errors in terms. No additional sources (other than the textbook) used. Others’ work is not always acknowledged and there are a number of errors or non-compliance with the APA (6th edn). Question 2 Criteria HD (42-50) Distinction (37-41) Credit (32-36) Pass (25-31) Use of the formulae which underpin the information provided by the assistant to check the statements made by the assistant for any errors and if errors found to provide the correct interpretation. This demonstrates the ability to use business risk analysis in a novel situation and to use critical and reflective judgment. (20 Marks) All errors in assistant’s judgment identified. Correct interpretation provided demonstrating a sophisticated understanding of how the formula can be used to analyse the risks that a business faces. Majority of errors in assistant’s judgment identified. Correct interpretation provided demonstrating a good understanding of how the formula can be used to analyse the risks that a business faces. Some errors in assistant’s judgment identified. Most alternative interpretations correct. Demonstrating a developing understanding of how the formula can be used to analyse the risks that a business faces. Demonstration of understanding of some of the formula. Some errors in assessing the assistant’s judgment identified. Some errors in alternative interpretation. Correlation of correct interpretation with additional information provided. This demonstrates the ability to use business risk analysis in a novel situation and to use critical and reflective judgment. (10 Marks) All additional information taken into consideration when developing correct interpretation of ratios. Further demonstrating the high level of understanding of business risk analysis. Most of the additional information taken into consideration when developing correct interpretation of ratios demonstrating a good level of understanding of business risk analysis. Much of the additional information taken into consideration when developing correct interpretation of ratios demonstrating an moderate level of understanding of business risk analysis. Some additional information taken into consideration when developing correct interpretation of ratios.This demonstrates a basic level of understanding of business risk analysis. Identification of year-end audit test that will need to be completed to minimise audit risk identified through the analysis of the ratios and the additional information. This demonstrates the ability to design an audit plan (10 Marks). All appropriate year end audit tests identified with a clear statement as to how these will minimise audit risk. This demonstrates a sophisticated level of audit planning. Most appropriate year end audit tests identified. Evidence of some understanding as to how these will minimise audit risk. Many appropriate year end audit tests identified. Evidence of some understanding as to how these will minimise audit risk. Some appropriate year end audit tests identified. Basic understanding of how these will minimise audit risk. Professional communication (Note: you are required to space between paragraphs; use Arial 10pt or TNR 12 pt; use 1.5 or double line spacing) (5 Marks). Work contains distinct understandable statements with no errors. Extremely well organised. Content is structured in a manner that facilitates the reader’s understanding. Work contains distinct understandable statements with minimal errors. Answer is well organised. Content is structured in a manner that facilitates the reader’s understanding. Minor spelling, grammar and punctuation errors. Work shows evidence of proofreading. Well-structured with one main idea or argument provided per paragraph arguments/ideas. Some spelling, grammar and punctuation errors found but the work is readable and structured. Work may include too many ideas in one paragraph. Appropriate resources and correct referencing (5 Marks). Used four or more sources. All work has been referenced correctly as per APA (6th edn) requirements. Used two or more sources. All work has been referenced correctly as per APA (6th edn) requirements. Used one or more sources. All work has been referenced within the body of the answer and in the reference list, with some omissions or errors in terms. No additional sources used other than the text. Others’ work is not always acknowledged and there are a number of errors or non-compliance with the APA (6th edn). Question 3 Criteria HD 37-50 Distinction 37-50 Credit 32-36 Pass 25-31 Identification of absent controls. This demonstrates the level of understanding of the role of internal controls (15 Marks). Identification of all absent controls demonstrating a deep understanding of the role of internal controls. Identification of most of the absent controls demonstrating a good level understanding of the role of internal controls. Identification of some of the absent controls demonstrating a moderate level understanding of the role of internal controls. Identification of only a few of the absent controls demonstrating a very basic level understanding of the role of internal controls. Identification of unmet audit objectives. (10 Marks) Identification of all unmet audit objectives demonstrating a sophisticated understanding of the development of an audit plan. Identification of most unmet audit objectives demonstrating a good level of understanding of the development of an audit plan. Identification of some of the unmet audit objectives demonstrating a moderate level of understanding of the development of an audit plan. Identification of most unmet audit objectives demonstrating a basic level of understanding of the development of an audit plan. Identification of the control to correct the deficiency (15 Marks). Identification of all of the controls to correct the deficiencies, demonstrating critical and reflective thinking and a deep understating of the role of internal controls. Identification of most of the controls to correct the deficiencies, demonstrating critical and reflective thinking and a good understating of the role of internal controls. Identification of some of the controls to correct the deficiencies, demonstrating a moderate level of critical and reflective thinking and understating of the role of internal controls. Some attempt to identify the controls to correct the deficiencies, demonstrating a basic level of critical and reflective thinking and understating of the role of internal controls. Professional communication (Note: you are required to space between paragraphs; use Arial 10pt or TNR 12 pt; use 1.5 or double line spacing) (5 Marks). Work contains distinct understandable statements with no errors. Extremely well organised. Content is structured in a manner that facilitates the reader’s understanding. Work contains distinct understandable statements with minimal errors. Answer is well organised. Content is structured in a manner that facilitates the reader’s understanding. Minor spelling, grammar and punctuation errors. Work shows evidence of proofreading. Well-structured with one main idea or argument provided per paragraph arguments/ideas. Some spelling, grammar and punctuation errors found but the work is readable and structured. Work may include too many ideas in one paragraph. Appropriate resources and correct referencing (5 Marks). Used four or more sources. All work has been referenced correctly as per APA (6th edn) requirements. Used two or more sources. All work has been referenced correctly as per APA (6th edn) requirements. Used one or more sources. All work has been referenced within the body of the answer and in the reference list, with some omissions or errors in terms. No additional sources used other than the text. Others’ work is not always acknowledged and there are a number of errors or non-compliance with the APA (6th edn). Assessment item 4 Final Exam Value: 60% Date: To be advised Duration: 2 hours plus 10 minutes reading time Submission method options N/A - submission not required/applicable Rationale This assessment task has been designed to assess your ability to: Be able to explain and critically evaluate influences on audit and assurance services including: Australian and international professional standards, statutory and common laws, regulatory bodies, and public expectations within a global market; Be able to evaluate the expanding scope of assurance services and providers in today's international business environment; Be able to demonstrate risk management methodologies and the role of internal controls in an audit context; Be able to design an audit plan and select and apply appropriate audit procedures for a financial statement audit; and Be able to exercise critical and reflective judgment and appreciate the value of ethical practice. Requirements The final examination is an open book - restricted materials exam. It will be sat within the official examination period. The examination consists of three short answer questions in Part A worth five marks each (for a total of 15 marks) and three problem questions in Part B worth 15 marks each (for a total of 45 marks). Marks for requisite parts of questions in Part B will be clearly stated on the paper. A sample exam paper (with solutions) has been provided in this subject outline. Marking criteria Marks will be awarded for correct answers and no marks deducted for incorrect answers. All questions must be answered. Criteria High Distinction Distinction Credit Pass Short answer questions (15 marks) In response to each of the short answer questions, students will be required to demonstrate, for a range of scenarios, their ability to: explain and critically evaluate influences on audit and assurance services including: Australian and international professional standards, statutory and common laws, regulatory bodies, and public expectations within a global market; evaluate the expanding scope of assurance services and providers in today's international business environment; demonstrate risk management methodologies and the role of internal controls in an audit context; design an audit plan and select and apply appropriate audit procedures for a financial statement audit; and exercise critical and reflective judgement and appreciate the value of ethical practice. To meet this level you will attain a cumulative mark between 85%-100% for this section of the examination. A mark in this range (no less than 72 marks) indicates that you have answered the three questions to a high or exceptional level & no more than one question is answered at a basic level. Overall, in meeting this level you will demonstrate exceptional knowledge, understanding, and ability across the majority of topics in this subject. To meet this level you will attain a cumulative mark between 75%-84% for this section of the examination. A mark in this range (no less than 64 marks) indicates that you have answered at least two of the three questions to a high level or above & no more than one question is answered to a basic or limited level. Overall, in meeting this level you will demonstrate a comprehensive knowledge, understanding, and ability across the majority of topics in this subject. To meet this level you will attain a cumulative mark between 65%-74% for this section of the examination. A mark in this range (no less than 55 marks) indicates that you have answered at least one of the three questions to a high level or above & no more than two questions are answered to a basic or limited level. Overall, in meeting this level you will demonstrate a sound knowledge, understanding, and ability across the majority of topics in this subject. To meet this level you will attain a cumulative mark between 50%-64% for this section of the examination that consists of 3 short answer questions with 5 marks available for each. A mark in this range (no less than 7marks) indicates that you have answered at least two of the three questions to a basic level or above & no more than two questions are answered to a limited level. Overall, in meeting this level you will demonstrate a basic knowledge, understanding, and ability across the majority of topics in this subject Part B Problem questions (45 marks) In response to each of the problem questions, students will be required to demonstrate, for a range of scenarios, their: - understanding of: explain and critically evaluate influences on audit and assurance services including: Australian and international professional standards, statutory and common laws, regulatory bodies, and public expectations within a global market; evaluate the expanding scope of assurance services and providers in today's international business environment; demonstrate risk management methodologies and the role of internal controls in an audit context; design an audit plan and select and apply appropriate audit procedures for a financial statement audit; and exercise critical and reflective judgement and appreciate the value of ethical practice. To meet this level you will attain a cumulative mark between 85%-100% for this section of the examination. A mark in this range (no less than 38 marks) indicates that you have answered two of the three questions to a high or exceptional level & no more than one question is answered at a basic level. Overall, in meeting this level you will demonstrate exceptional knowledge, understanding, and ability across the majority of topics in this subject. To meet this level you will attain a cumulative mark between 75%-84% for this section of the examination. A mark in this range (no less than 33 marks) indicates that you have answered at least two of the three questions to a high level or above & no more than one question is answered to a basic or limited level. Overall, in meeting this level you will demonstrate a comprehensive knowledge, understanding, and ability across the majority of topics in this subject. To meet this level you will attain a cumulative mark between 65%-74% for this section of the examination. A mark in this range (no less than 29 marks) indicates that you have answered at least one of the three questions to a high level or above & no more than two questions are answered to a basic or limited level. Overall, in meeting this level you will demonstrate a sound knowledge, understanding, and ability across the majority of topics in this subject. To meet this level you will attain a cumulative mark between 50%-64% for this section of the examination. A mark in this range (no less than 22.5 marks) indicates that you have answered one or two of the three questions to a basic level or above & no more than two questions are answered to a limited level. Overall, in meeting this level you will demonstrate a basic knowledge, understanding, and ability across the majority of topics in this subject. Material provided by the University 2 x 12 page answer booklets Material required by the student As listed in Exam Conditions. Textbooks - as specified (annotations permitted) Auditing, Assurance and Ethics Handbook published by Pearson and CPA or by Wiley and CA ANZ (or ICAA if prior to 2015). Unmarked except for highlighting, underlining and or tagging. Brief captions allowed on tags only.