PART I
Choose a company that interests you and access their most current financial statements, MD&A and SEC filings. Using this information and any additional information you can gather about the industry, economy, and regulatory environment the company operates in complete a Risk Assessment for the company's audit.
You should have multiple risks in each area. Risk areas may include competition, economic, industry, regulatory, environment, etc.
At a minimum, your risk assessments should include the following:
- Risk description
- Estimated impact (low med high) based on materiality
- Estimated likelihood (low med high)
Use an Excel table to present your risk assessment. This workbook will then become your audit working papers.
This is an individual assignment.
PART II - Part II of the project is attached
PART III
Based on the Audit Plan created last week, create a plan for sampling and testing controls.
This can be done in a table format in your Excel workbook of audit papers. Include the account or process (i.e. Accounts Receivable or Cash Handling), objective, method, exception criteria, population, sampling unit and tolerable exception rate. For Sampling units, where exact numbers are not known (such as total number of customer accounts within Accounts Receivable), use an appropriate portion such as 1 out of 1,000.
In your spreadsheet, be sure to include your reasons for the criteria your team chooses.
Each group member should submit the Sampling and Testing Plan of Controls for grading purposes. The Sampling and Testing Plan of Controls should be part of your Excel working papers so you can turn in the entire workbook. Please be sure the tabs in the workbook are labeled appropriately.
Save your assignment as a Microsoft Excel spreadsheet.
PART IV
This part of the project will be done individually but will be based on your team's work in Modules 03 through 05.
The final report will consist of two parts. The first part is a summary written to the Senior Audit partner, which summarizes the work you have done, the tests you performed, and your findings. Assume you have completed all testing as planned. Choose three different items to note on the report that the findings were not as expected and detail what you did to resolve the issue.
Draft an Opinion Letter to be published and for the client. This should follow the industry standard in content and style.
Each group member should gather all audit papers and submit the completed audit package for individual grading purposes. To mirror a real world situation, you are encouraged to make any changes to earlier assignments before you hand in the final based either on feedback from the instructor or from further work of the group as the process progresses.
You will submit two documents this week
1. A Word document containing the summary for the senior audit partner and the opinion letter for the client. The audit summary should reference the audit working papers in the Excel workbook.
2. Your Excel workbook containing all of your working papers.
Attachment:- auditing project.xlsx