1. For the purpose of the assignment, you assume the role of an auditor and your firm has recently been appointed as external auditor of an entity. As required by Auditing Standard ASA300, you are preparing an audit plan for the audit of the entity's financial statements.
2. The audit fee is $92,000 and had been communicated to the client in the Engagement Letter.
3. You are required to download the 2011 annual report published by the following entity:
4. Using the first four steps in the audit process as prescribed in Chapter 6 (pages 254-255) of the textbook, plan the audit for the entity you have chosen. Since you are required to develop an audit plan for a real life entity, quoting directly from textbook does not meet the objective of the assignment.
5. Your audit plan must include the followings:
1. Executive summary
2. Introduction
3. Audit plan with the following headings:
a. Understanding the entity and its environment
b. Understanding internal control
c. Assessing the risks of material misstatement (for 5 key accounts)
d. Developing responses to assessed risks (for the accounts selected above)
4. Conclusion
5. References
6. Appendice
Additional information
For the purposes of the assignment, the following auditing standards are relevant:
- ASA210 Terms of Audit Engagements
- ASA220 Quality Control for Audits of Historical Financial Information
- ASA230 Audit Documentation
- ASA250 Consideration of Laws and Regulations in an Audit of a Financial Report
- ASA300 Planning an Audit of a Financial Report
- ASA315 Understanding the Entity and its Environment and Assessing the Risks of
Material Misstatement
- ASA320 Materiality and Audit Adjustments
- ASA330 The Auditor's Procedures in Response to Assessed Risks
- ASA520 Analytical Procedures
Hints
. You are required to plan the audit using only information that is publicly available. That is, you only use the information that is published by the entity either on its website or printed materials.
2. You must download and use the proforma audit plan on webct.
3. Information on the organisation's internal control structure can be obtained by looking at the relevant section in the annual report, materials published on the entity website and comparing them to the Principles of Good Corporate Governance and Best Practice Recommendations published by the ASX Corporate Governance Council.