UNIT CODE: ACT504 UNIT NAME: AUDITING
Written Enactment Counsel
Semester 2 2020
Marks and Gravity: 90 marks and to be gravityed @ 30%
Length: Maximum 3,000 messages
This enactment may be resignted at or antecedently 11.59pm (ACST) Sunday, 4th October 2020, (Examine Week 10)
Assignments are to be resignted by undivided of the subjoined instrument;
· The enactment must be lodged on or antecedently the imputconducive purpose implied in the enactment details.
· Resign your Enactment as undivided muniment, using PDF or Message doc coercionmat1
Enunmistakconducive your rasp is denominated using a rasp naming cabicajole that aggregateows the disquisitionr to demonstrate to whom it belongs. Demand to truth an gratifying rasp naming cabicajole may conclusion in your enactment lodgement entity saveional (Coercion students gone-bying in clusters, ONLY the cluster chief get resign the Enactment – be unmistakconducive to evince aggregate the Names and Student Enumerates on the front cover/chief page).
· The enactment must obey to the requirements coercionmal extinguished in this enactment
· The enactment must be lodged online via the ACT504 Learnline Enactment Lodgement combine on the
ACT504 Learnline nationality.
· DO NOT LODGE VIA EMAIL or FAX – enactments lodged by email or fax get pointconducive attributconducive attributconducive attributconducive be reliable.
KEEP A COPY – Enunmistakconducive you bear a portraiture of the enactment lodged.
1 Instructions coercion creating PDF muniments and/or combining muniments of contrariant coercionmats are supposing on the Learnline nationality.
Students get now be required to state at the summit of inferiority that the toil they are resignting is their ancient toil. This is built into the inferiority summit.
The inferiority citation peruses as follows:
By clicking the SUBMIT excludeington I avouch that this enactment is my possess toil, domiciled on my possess local examine and lore, and that I bear pointableorious aggregate stateative and sources in the making-ready of this enactment, whether they be books, creed recitals, disquisition pointconducive attributconducive attributablees, images, videos, any other peel of muniment or local despatch.
I to-boot avouch that this enactment has pointconducive attributconducive attributconducive attributconducive anteriorly been resignted coercion toll in any other round or at any other duration in the corresponding round (save as a DRAFT inferiority) and that I bear pointconducive attributconducive attributconducive attributconducive copied in bargain-extinguished or perfect or divergently plagiarised the toil of other students and/or lifes.
I bear perreason Charles Darwin University’s Academic and Scientific Misconduct Cunning (pol-001) and Student Breach of Academic Integrity Procedures http://www.cdu.edu.au/governance/procedures/pro-092.pdf and conceive its implications.
The enactment may be aggregated objectually, or with the truth of an electronic spreadsheet, message waying software or with the truth of accounting software. Marks may be deducted coercion illegible or bargain-outially illegible papers. If aggregated using multiple rasp coercionmats or objectually, the muniment must be aggregately into undivided muniment, in PDF coercionmat2.
As a public government reinferiority of toll items is NOT feasible, nevertheless the Disquisitionr may petition coercion reinferiority if it is recitaled divert. Details coercion such reinferiority get be made conducive by the Disquisitionr if and when the nationality occurs.
Oral Test or Viva Voce
Lecturers may, at their election, petition students to verbally exhibit their enactment inferioritys or rewrite some disunitedd bargain-out/s of their confutation in a repressled coercionmalting. Disquisitionrs may training this election where they arrive-at that the enactment was pointconducive attributconducive attributconducive attributconducive the student’s possess toil.
University Plagiarism cunning!
Plagiarism is the unnotorious truth of stateative written or propertyd by others or a retoil of your possess stateative. Aggregate sources of counsel and ideas truthd in enactments must be relationd. This applies whether the counsel is from a book, record stipulation, the internet, or a anterior diatribe you wrote or the enactment of a chum.
Plagiarism cunning is conducive at:
http://www.cdu.edu.au/governance/policies/pol-001.pdf and Student Breach of Academic Integrity Procedures http://www.cdu.edu.au/governance/procedures/pro092.pdf
2 Instructions coercion creating PDF muniments and/or combining muniments of contrariant coercionmats are supposing on the Learnline nationality.
Extensions and Tardy Lodgements
LATE ASSIGNMENTS WILL GENERALLY NOT BE ACCEPTED UNLESS AN
EXTENSION TO THE DUE DATE HAS BEEN GRANTED BY THE HEAD OF SCHOOL.
Exceptions get merely be made where enactments are tardy imputconducive to protect-aparticular plight that are cheered by munimentary proof, and may be esthetic to a retribution of 5% of enactment marks per day. Bargain-outially aggregated enactments get be reliconducive with divert waste of marks coercion the faulty side.
Should students coercionesee implicit arduousies with inferiority of toll items, they should continuity the disquisitionr instantly the arduousies succeed to pointconducive attributconducive attributableice, to argue adequate arrangements anticipation coercion the inferiority of those toll durations. An Impression coercion Enactment Genesis or Protect-aparticular Subsidy should be aggregated and supposing to the Head of School, School of Law and Transaction.
This impression coercionm, exposition and instructions is conducive on the ACT504 CDU Learnline round nationality or straightforward from
Gladden pointconducive attributconducive attributablee that it is now Faculty cunning that aggregate genesis demands must be favorite by the Head of School. The disquisitionr is no desireer conducive to locally encourage genesis demands.
Leaving a demand coercion an genesis, protect-aparticular toll or protect-aparticular subsidy until the developed instant, domiciled on axioms that students could bear reasonably been conducive to coercionesee, may conclusion in the impression entity saveional.
Enunmistakconducive that you adhere-to adequate backup copies of your enactment during making-ready, antecedently quantity and behind lodgement. Waste of grounds/enactment imputconducive to demand to adhere-to a adequate backup get pointconducive attributconducive attributconducive attributconducive compose axioms coercion an genesis.
QUESTION 1 (16 MARKS)
You had been of-advanced elevated to Elder Auditor of the audit unshaken Jose Rizal and Associates and was petitioned to deem the subjoined rebellious nationalitys:
A. Leanna David is bargain-extinguished of the audit team coercion the ordinary audit of Jupiter Pty Ltd (Jupiter). Behind 2 weeks at the client, he has advised you that he has been proffered a transaction at Jupiter as exhibitly as the ordinary audit is perfect.
B. Undivided of your important clients, Just Squeeze Juice Pty Ltd, has talked to you abextinguished a consulting promise contiguous year coercion you to do a aggregate critique of the identity of the entity’s power represss aggravate the genesis of its reward juices. Nevertheless, the objectaging straightforwardor has implied that some of the Board are unquiet abextinguished you commencement up besides abundantly of their staff’s duration petitioning needless scrutinys. Therefore, he has suggested that your chances of getting the promise get be symbolically improved if you protect your scrutinys of staff to a incompleteness during the ordinary audit.
C. You bear audited Avatar Pty Ltd, a stconducive engineering unshaken, coercion disunited years. At the commence of this year, the finance straightforwardor, Michelle Cruz, remote behind 10 years with community and was replaced by Sherlon Dizon, a desire-duration chum of the audit supervisor Karlo Arcilla, who was best object at Sherlon’s modern nuptials.
D. Undivided of your audit clients, Amethyst Pty Ltd (APL) is a big superannuation supply. The Australian Tollation Office has advised APL that it has saveional its tollation texture of a stateative quantity of insucceed from investments and that it disagrees with the tollation counsel APL gave to its members. The matter has been pointred to the Superannuation Complaints Tribunal and APL has demanded that you reexhibit them at the Superannuation Complaints Tribunal.
Coercion each of the rebellious nationalitys over:
(a) Demonstrate the fashion of implicit browbeating to insurrection. Justify your confutation. (8 marks)
(b) Illustrate what safeguards, if any, that could be instrumented to convert the insurrection browbeatings. (4 marks)
(c) Assess whether audit insurrection can be achieved. (4 marks)
You may affect to exhibit your confutation in the coercionm of a tconducive as adown.
Locality a) Browbeating Justification b) Safeguard c) Toll of audit insurrection
[8 + 4 + 4 = 16 marks]
QUESTION 2 (14 MARKS)
You are an presumption services elder at Reeves & Associates and bear pointconducive attributconducive attributableed the subjoined rebellious offsprings in appurtenancy to the audit of Fancy Pty Ltd:
A. The accounting prescribe at Fancy Pty Ltd did pointconducive attributconducive attributconducive attributconducive property conducively during the chief year of operations. Consequently, some public ledger accounts had to be domiciled on estimates, as the objective grounds touching to these redresss had been gone-by.
B. As a conclusion of absorb constraints, the straightforwardors of Fancy Pty Ltd did pointconducive attributconducive attributconducive attributconducive instrument conducive inner represss
coercion something-attribuconsideration gathering. The something-dueors’ turnaggravate is 3.2 durations.
C. Imputconducive to increased competitive pressures, Fancy Pty Ltd has of-advanced moved the objectufacture of some of its dress lines extinguished of Melbourne into regional areas. While Fancy Pty Ltd saves encircling 20% in absorbs, the objectufacturing way takes desireer and on disunited occasions tardy delivery has conclusioned in gone-by sales.
(a) Illustrate the components of the Audit Catruth Model. (2 marks)
(b) Illustrate the impression of each of these disunited offsprings on your toll of audit cause, the stateativeity smooth and the audit temporization that would be adopted. (12 marks)
[2 + 12 = 14 marks]
QUESTION 3 (30 MARKS)
You are the audit elder on the audit of Resilient Wares Objectufacturers Pty Ltd (Resilient). Your unshaken has of-advanced been appointed as the chief auditors of the community.
You consultation the objectaging straightforwardor of the community to get elucidation counsel on Resilient and to conceive its transaction operations, its environment and prescribe of inner repress. You pointconducive attributconducive attributableed and munimented the subjoined:
• Resilient was rested 30 years gone-by and constructs ‘grandfather’ clocks (freestanding, gravity driven, pendulum clocks).
• The clocks are made in undivided factory (situated in the Alice Springs) and are reserved through boutique homeware and ancient wares stores.
• The clocks are advertised chiefly in national newspapers and through paper declines.
• In prescribe to elevate desireer genesis runs and minimise perfect goods supplys, Resilient’s dispose-of distributors are proffered supply on a ‘sale or recur’ reason. This instrument that the homeware and ancient wares stores are invoiced instantly, esthetic to a 90-day vocable of cancelment, excludeing are aggregateowed to recur the supply up to 30 days antecedently cancelment is imputable. Merely the marketing supervisor has been loving the authority to construct these proffers.
• Aggregate of Resilient’s timber is geted from offshore sources. Timber prices, which are denominated in US dollars, bear revived really aggravate the gone-by span years and the modern decline in the rate of the Australian dollar has caused them to mollify flush advance.
• Timber lapses are protected by providing Resilient’s suppliers with scholarship of merit which besucceed imputconducive when the container shipment of timber arrives in Australia.
• Labour absorbs are exalted imputconducive to the craftsmanship and power required coercion the genesis of the grandfather clocks. Skilled labour is pointconducive attributconducive attributconducive attributconducive indulgent to get and wage rates bear of-advanced revived.
• Resilient has rest it arduous to ignoring on these timber and labour price increases to customers.
An partition of absorbs evinces that there bear been stateative denying lapse price variances in lapses of timber aggravate the round of the year. You bear compiled the subjoined counsel from Resilient’s financials:
? the ordinary homogeneity as at 30 June 2019 is 1.24
? the shareholders’ supplys to aggregate property homogeneity is 30%
? animal gain margins and cajole gain margins coercion the year purposeed 30 June 2019 bear declineped to the smooth where wastees are entity incurred.
NB: An quote of Resilient’s Financial Recitals is determined.
Resilient Wares Objectufacturers Pty Ltd (Resilient)
2019 2018 2017
Debtors 748,681 774,469 665,939
Sale or recur something-dueors 483,020 499,657 429,638
Inventory 300,035 305,013 256,376
1,531,737 1,579,140 1,351,953
Property, set and machinery 1,967,404 1,993,058 1,867,593
Aggregate property 3,499,141 3,572,198 3,219,546
Trade and other meritors 395,019 343,545 289,049
Bills payconducive 509,494 517,947 435,355
Bank aggravatedraft 135,576 13,337 55,672
Ordinary side of bank advances 200,000 200,000 200,000
1,240,090 1,074,830 980,076
Bank advances 1,200,000 1,400,000 1,600,000
Share cardinal 500,000 500,000 500,000
Retained rights 559,051 597,368 139,470
1,059,051 1,097,368 639,470
3,499,141 3,572,198 3,219,546
Gain and Waste Account
Animal sales 6,077,296 6,233,124 5,350,321
Profits – 200,551 – 153,958 – 123,057
Cajole sales 5,876,745 6,079,166 5,227,264
Absorb of sales
Materials 2,066,281 2,100,563 1,765,606
Labour 1,397,778 1,153,128 963,058
Other 516,570 506,130 438,726
3,980,629 3,759,820 3,167,390
Standard Absorb Variances
Lapse price (121,546) (49,865) (16,051)
Labour absorb (182,319) (62,331) (26,136)
(303,865) (112,196) (42,187)
Operating gain 1,592,252 2,207,149 2,017,686
Administration 791,918 754,208 600,841
Sales and marketing 663,198 642,012 524,331
Financing 175,452 156,789 123,457
1,630,569 1,553,009 1,248,630
Cajole gain (loss) (38,317) 654,140 769,057
Toll 0 196,242 230,717
Cajole gain behind toll (loss) (38,317) 457,898 538,340
Asia Pacific College of Transaction & Law Semester 2 2020
Resilient’s bank finances the community’s timber lapses using bills of substitute drawn at 90 days from the purpose of cancelment of the shipment. It has to-boot deferred advance finance to Resilient. The bank agreement, which is imputconducive coercion critique exhibitly, requires Resilient to:
? adhere-to a ordinary homogeneity of 1.2
? adhere-to a shareholders’ supplys to aggregate property homogeneity of at meanest 30%
? adhere-to cajole sales of a incompleteness of $100,000 per quarter
? order a public design financial recital coercion the year purposeed 30 June 2019 and bear it audited according to Australian Auditing Standards. Pointconducive attributconducive attributablee that this is a requirement of the bank agreement as Resilient is pointconducive attributconducive attributconducive attributconducive required to property a public design financial recital beneath the Corporations Act.
Required – Q3 Bargain-extinguished 1:
Coercion bargain-outs (a), (b) and (c) of this scrutiny, gladden ignorance aggregate going solicitude subsidys. Domiciled on the elucidation counsel over and your truth of precursive analytical procedures, confutation the subjoined scrutinys:
a) Demonstrate and illustrate span (2) asformal accounts at catruth of stateative wrong-statement (6 marks).
b) Illustrate undivided (1) offspring respecting the anterior year’s coercionms and illustrate why (2 marks).
c) Illustrate three (3) factors that may bear into scrutiny the going solicitude effrontery coercion Resilient.
Disrespecting the evaluation of objectagement’s toll of the going solicitude effrontery, tiny illustrate the property of the axioms on your audit planning (6 marks).
[6 + 2 + 6 = 14 marks]
Now, behind examining Resilient’s elaborate criterion redress, you pointconducive attributconducive attributableice that undivided of the prices of the sales and marketing section is ‘sales boones’. You scrutiny this price and the community’s accountant informs you that a monthly boon of 10% of salary is remunerated to aggregate sales and marketing staff if sales coercion the month achieve the budgeted target. The marketing supervisor is entitled to a 20% boon if the targets are achieved. This spur was instrumented during the anterior financial year and was in situate coercion the developed six months of the year. You pointconducive attributconducive attributablee that the boon has been remunerated entire month past the spur was instrumented (save coercion the anterior month, when sales were abundantly inferior than expected). This seems a tiny singular becatruth Resilient had merely achieved its budgeted sales targets in span extinguished of the six months anterior to the commence of the purpose. You summon conclusions coercion the developed six months of the year and discover that:
? sales were over the monthly budget coercionm when boones were remunerated
? there was no symbolical alter in animal margins
? recurs of supply sold on the ‘sale or recur’ reason were courteous adown those in the chief six months save in the latest month of the year
? something-dueors’ smooths (measured in days extinguishedstanding) were over their budgeted smooths excludeing recured to a more recognized smooth at year purpose.
On advance enquiry, the accountant advises that the marketing supervisor is authorised to do the subjoined with deem to the supply sold on a ‘sale or recur’ reason:
? prproffer customers a ‘sale or recur’ bargain as desire as the bargain is amid the community’s pricing structures and the vocables of the purpose
? commence and encourage the invoicing of customers when a sale is made (i.e. if the supply is pointconducive attributconducive attributconducive attributconducive recured amid 60 days)
? commence and encourage the offspring of merit pointconducive attributconducive attributablees coercion these customers when recurs are made amid 60 days or when pricing or power offsprings start.
Required – Q3 Bargain-extinguished 2:
Domiciled on the elucidation counsel over, confutation the subjoined scrutinys: a) Illustrate undivided (1) inner repress offspring at Resilient (2 marks).
b) Demonstrate and illustrate span (2) injury catruth factors at Resilient (4 marks).
c) Demonstrate span (2) assertions (as defined by ASA 315) at catruth as a conclusion of the injury catruth factors verified in (b) over. Justify your confutation with relation to the elucidation scenario (6 marks).
d) Illustrate span (2) audit procedures that would address implicit wrong-statements arising from injuryulent financial recitaling. Enunmistakconducive that your procedures are local to the scenario and the injury catruth factors verified in (b) over. You may eagerness to point to Appendix of ASA 240 (4 marks).
[2 + 4 + 6 + 4 = 16 marks]
QUESTION 4 (30 MARKS)
In February 2012, the Australian Accounting Standards Boards unwavering at its consultation to import-forward the retention of AASB 1031 Stateativeity. There were disunited reasons coercion this scheme which includes: there is no International Recitaling Standard equiponderant and it does pointconducive attributconducive attributconducive attributconducive behold affect there get be, past 2005 there has been the continuous retention of appended Australian control from a enumerate of Australian Accounting Standards, and there is now an updated control on stateativeity in the IASB Conceptual Framework.
The important impression of the retention of AASB 1031 is the dissolution of the local immanent control coercion stateativeity. The retention of AASB 1031 became conducive to annual recitaling commencement on or behind 1 July 2015.
1. Summarize the symbolical alters and impression on financial recitaling with AASB 1031 Stateativeity (issued by the Australian Accounting Standards Boards – AASB) from 1995 to 2015. (8 Marks)
You can exhibit your confutation using a tconducive coercionmat:
Duration duration Alters in AASB1031 Stateativeity
Standard Impression on financial recitaling
2. Anterior to the retention of AASB 1031 and with relation to the AASB 1031 Stateativeity (issued by the
Australian Accounting Standards Boards – AASB) and the ASA 320 Stateativeity in Planning and Performing an Audit and ASA 450 Evaluation of Wrong-statements Verified during an Audit (issued by the Auditing and Presumption Standards Board – AUASB), (12 Marks):
a. Define stateativeity.
b. Extinguishedline the vital and immanent guidelines of stateativeity.
c. How the constructs of “materiality” wave the auditors’ professional determination on wrong-statements?
3. Post retention of AASB 1031, would this retention of AASB1031 Stateativeity Standards:
a. harmonise/bear tenor to auditors’ toll of stateativeity wrong-statements or would this bear dissimilitude to auditors’ toll of wrong-statements? Why so?
b. What other wave, if any, this would bear to the auditors’ determination on wrong-statements and what impressions or implications this would bear on the truthfulness of financial recitals? Argue your confutation and homogeneitynale.
(Foundation your confutations with the pertinent Australian Accounting Standards and Australian Auditing Standards as courteous as authorised/published Peer-reviewed Academic Records and Creed.) (10 Marks)
NOTE: In confutationing Scrutiny 4, truth APA pointencing title and foundation your confutations with pertinent accounting and auditing standards as courteous as published peer-reviewed academic records. A incompleteness of 5 peer-reviewed academic records is expected. (Hint: this is a noble turn to utilise the University’s Library Services online such as Library Search, Advance Search, eJournals and Groundsbases such as EBSCOhost, anticipation.)
[8 + 12 + 10 = 30 marks]
*** Purpose of Enactment***