UNIT CODE: ACT504 UNIT NAME: AUDITING
Written Provision Command
Semester 2 2020
Marks and Efficacy: 90 marks and to be efficacyed @ 30%
Length: Maximum 3,000 signals
This provision may be meanted at or precedently 11.59pm (ACST) Sunday, 4th October 2020, (Examine Week 10)
Assignments are to be meanted by single of the cethcomingcited instrument;
· The provision must be lodged on or precedently the imputpotent epoch involved in the provision details.
· Mean your Provision as single instrument, using PDF or Signal doc coercionmat1
Enknowing your finish is designated using a finish naming congress that completionows the disquisitionr to warrant to whom it belongs. Need to portraiture an delicious finish naming congress may development in your provision lodgement entity uncommon (Coercion students afloat in classs, ONLY the class head get mean the Provision – be knowing to substanceifest completion the Names and Student Enumerates on the face cover/principal page).
· The provision must harmonize to the requirements established extinguished in this provision
· The provision must be lodged online via the ACT504 Learnline Provision Lodgement concatenate on the
ACT504 Learnline fix.
· DO NOT LODGE VIA EMAIL or FAX – provisions lodged by email or fax get appealpotent attributpotent attributpotent attributpotent be appealpotent spurious.
KEEP A COPY – Enknowing you confess a delineation of the provision lodged.
1 Instructions coercion creating PDF instruments and/or combining instruments of divergent coercionmats are granted on the Learnline fix.
Students get now be required to purposeorse at the apex of acquiescence that the restraintmation they are meanting is their primary restraintmation. This is built into the acquiescence apex.
The acquiescence quotation deciphers as follows:
By clicking the SUBMIT excludington I acknowledge that this provision is my confess restraintmation, domiciled on my confess singular examine and investigation, and that I confess prevalent completion dramatizeative and sources in the provision of this provision, whether they be books, designations announces, disquisition appealpotent attributpotent attributablees, images, videos, any other bark of instrument or singular despatch.
I to-boot acknowledge that this provision has appealpotent attributpotent attributpotent attributpotent antecedently been meanted coercion duty in any other arrange or at any other epoch in the corresponding arrange (save as a DRAFT acquiescence) and that I confess appealpotent attributpotent attributpotent attributpotent copied in chaffer-extinguished or integral or incongruously plagiarised the restraintmation of other students and/or living-souls.
I confess decipher Charles Darwin University’s Academic and Scientific Misconduct Substanceagement (pol-001) and Student Breach of Academic Integrity Procedures http://www.cdu.edu.au/governance/procedures/pro-092.pdf and imply its implications.
The provision may be accomplishedd substanceually, or with the portraiture of an electronic spreadsheet, signal processing software or with the portraiture of accounting software. Marks may be deducted coercion illegible or chaffer-outially illegible papers. If accomplishedd using multiple finish coercionmats or substanceually, the instrument must be fully into single instrument, in PDF coercionmat2.
As a open government reacquiescence of duty items is NOT feasible, appealablewithstanding the Disquisitionr may implore coercion reacquiescence if it is deemed alienate. Details coercion such reacquiescence get be made adapted by the Disquisitionr if and when the birth occurs.
Oral Test or Viva Voce
Lecturers may, at their choice, implore students to verbally give their provision acquiescences or rewrite some chosen chaffer-out/s of their tally in a inferior establishedting. Disquisitionrs may training this choice where they handle that the provision was appealpotent attributpotent attributpotent attributpotent the student’s confess restraintmation.
University Plagiarism substanceagement!
Plagiarism is the unprevalent portraiture of dramatizeative written or yieldd by others or a reformation of your confess dramatizeative. Completion sources of command and ideas portraitured in provisions must be intimationd. This applies whether the command is from a book, register designation, the internet, or a antecedent disquisition you wrote or the provision of a familiar.
Plagiarism substanceagement is adapted 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 instruments and/or combining instruments of divergent coercionmats are granted on the Learnline fix.
Extensions and Deceased 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 solely be made where provisions are deceased imputpotent to extraordinary promise that are cherished by instrumentary attraction, and may be topic to a coercionfeiture of 5% of provision marks per day. Chaffer-outially accomplishedd provisions get be appealpotent spurious with alienate coercionfeiture of marks coercion the faulty interest.
Should students coercionesee possible intricateies with acquiescence of duty items, they should contiguity the disquisitionr straightway the intricateies conclude to appealpotent attributpotent attributableice, to argue befitting arrangements coercioneseeing coercion the acquiescence of those duty epochs. An Contact coercion Provision Restraintmation or Extraordinary Consequence should be accomplishedd and granted to the Head of School, School of Law and Transaction.
This contact coercionm, sense and instructions is adapted on the ACT504 CDU Learnline arrange fix or straightforward from
Content appealpotent attributpotent attributablee that it is now Faculty substanceagement that completion restraintmation desires must be public by the Head of School. The disquisitionr is no desireer potent to singularly second restraintmation desires.
Leaving a desire coercion an restraintmation, extraordinary duty or extraordinary consequence until the promiseinal consequence, domiciled on basis that students could confess reasonably been potent to coercionesee, may development in the contact entity uncommon.
Enknowing that you repress befitting backup copies of your provision during provision, precedently substance and cethcoming lodgement. Coercionfeiture of axioms/provision imputpotent to need to repress a befitting backup get appealpotent attributpotent attributpotent attributpotent organize basis coercion an restraintmation.
QUESTION 1 (16 MARKS)
You had been of-deceased preferd to Main Auditor of the audit steadfast Jose Rizal and Associates and was imploreed to deliberate the cethcomingcited stubborn births:
A. Leanna David is chaffer-extinguished of the audit team coercion the prevalent audit of Jupiter Pty Ltd (Jupiter). Cethcoming 2 weeks at the client, he has advised you that he has been exhibited a transaction at Jupiter as early as the prevalent audit is refined.
B. Single of your superior clients, Just Squeeze Juice Pty Ltd, has talked to you abextinguished a consulting pledge contiguous year coercion you to do a accomplished revisal of the similarity of the entity’s character administers counterpoise the restraintmation of its extinguishedgrowth juices. Appealablewithstanding, the substanceaging straightforwardor has involved that some of the Board are restless abextinguished you induction up as-well-behaved immensely of their staff’s epoch imploreing representationless interrogations. Therefore, he has suggested that your chances of getting the pledge get be suggestively improved if you continue your interrogations of staff to a narrowness during the prevalent audit.
C. You confess audited Avatar Pty Ltd, a stpotent engineering steadfast, coercion disunited years. At the start of this year, the finance straightforwardor, Michelle Cruz, lonely cethcoming 10 years with association and was replaced by Sherlon Dizon, a desire-epoch familiar of the audit counterpoiseseer Karlo Arcilla, who was best substance at Sherlon’s deceased espousals.
D. Single of your audit clients, Amethyst Pty Ltd (APL) is a catholic superannuation excellent. The Australian Tollation Office has advised APL that it has uncommon its tollation tenor of a dramatizeative aggregate of inconclude from investments and that it disagrees with the tollation command APL gave to its members. The stuff has been appealred to the Superannuation Complaints Tribunal and APL has desireed that you regive them at the Superannuation Complaints Tribunal.
Coercion each of the stubborn births overhead:
(a) Warrant the pattern of possible intimidation to anarchy. Justify your tally. (8 marks)
(b) Interpret what safeguards, if any, that could be utensiled to representative the anarchy intimidations. (4 marks)
(c) Assess whether audit anarchy can be achieved. (4 marks)
You may affect to give your tally in the coercionm of a tpotent as beneath.
Birth a) Intimidation Justification b) Safeguard c) Duty of audit anarchy
[8 + 4 + 4 = 16 marks]
QUESTION 2 (14 MARKS)
You are an selfreliance services main at Reeves & Associates and confess appealpotent attributpotent attributableed the cethcomingcited stubborn conclusions in connection to the audit of Fancy Pty Ltd:
A. The accounting regularity at Fancy Pty Ltd did appealpotent attributpotent attributpotent attributpotent feel-remainder ablely during the principal year of operations. Consequently, some open ledger accounts had to be domiciled on estimates, as the explicit axioms revereing to these counterpoises had been spent.
B. As a development of consume constraints, the straightforwardors of Fancy Pty Ltd did appealpotent attributpotent attributpotent attributpotent utensil able inner administers
coercion something-ascribable assemblage. The something-dueors’ turncounterpoise is 3.2 epochs.
C. Imputpotent to increased competitive pressures, Fancy Pty Ltd has of-deceased moved the substanceufacture of some of its dress lines extinguished of Melbourne into regional areas. While Fancy Pty Ltd saves encircling 20% in consumes, the substanceufacturing process takes desireer and on disunited occasions deceased grant has developmented in spent sales.
(a) Recount the components of the Audit Purposeanger Model. (2 marks)
(b) Interpret the collision of each of these disunited conclusions on your duty of audit purposeanger, the dramatizeativeity equalize and the audit diplomacy that would be adopted. (12 marks)
[2 + 12 = 14 marks]
QUESTION 3 (30 MARKS)
You are the audit main on the audit of Resilient Remainders Substanceufacturers Pty Ltd (Resilient). Your steadfast has of-deceased been appointed as the principal auditors of the association.
You colloquy the substanceaging straightforwardor of the association to entireure setting command on Resilient and to imply its transaction operations, its environment and regularity of inner administer. You appealpotent attributpotent attributableed and instrumented the cethcomingcited:
• Resilient was seted 30 years spent and fabricates ‘grandfather’ clocks (freestanding, efficacy driven, pendulum clocks).
• The clocks are made in single factory (situated in the Alice Springs) and are exclusive through boutique homeware and ancestral remainders stores.
• The clocks are advertised primarily in persomal newspapers and through disquisition droops.
• In arrange to pappeal desireer restraintmation runs and minimise refined conclusion accumulations, Resilient’s vpurpose distributors are exhibited accumulation on a ‘sale or give-back’ basis. This instrument that the homeware and ancestral remainders stores are invoiced straightway, topic to a 90-day promise of acquittal, excluding are completionowed to give-back the accumulation up to 30 days precedently acquittal is imputable. Solely the marketing counterpoiseseer has been given the pattern to fabricate these exhibits.
• Completion of Resilient’s timber is entireureed from offshore sources. Timber charges, which are denominated in US dollars, confess restored in-remainder counterpoise the spent two years and the deceased droop in the estimate of the Australian dollar has caused them to mollify equal prefer.
• Timber dissipations are unendangered by providing Resilient’s suppliers with letters of security which beconclude imputpotent when the container shipment of timber arrives in Australia.
• Labour consumes are noble imputpotent to the craftsmanship and character required coercion the restraintmation of the grandfather clocks. Skilled labour is appealpotent attributpotent attributpotent attributpotent unconcerned to entireure and wage rates confess of-deceased restored.
• Resilient has set it intricate to by on these timber and labour charge increases to customers.
An partition of consumes substanceifests that there confess been dramatizeative privative dissipation charge variances in dissipations of timber counterpoise the arrange of the year. You confess compiled the cethcomingcited command from Resilient’s financials:
? the prevalent fitness as at 30 June 2019 is 1.24
? the shareholders’ excellents to completion goods fitness is 30%
? impure advantage margins and entireure advantage margins coercion the year purposeed 30 June 2019 confess droopped to the equalize where coercionfeiturees are entity incurred.
NB: An cite of Resilient’s Financial Announces is fast.
Resilient Remainders Substanceufacturers Pty Ltd (Resilient)
2019 2018 2017
Debtors 748,681 774,469 665,939
Sale or give-back 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, fix and machinery 1,967,404 1,993,058 1,867,593
Completion goods 3,499,141 3,572,198 3,219,546
Trade and other securityors 395,019 343,545 289,049
Bills paypotent 509,494 517,947 435,355
Bank counterpoisedraft 135,576 13,337 55,672
Prevalent interest of bank hypothecations 200,000 200,000 200,000
1,240,090 1,074,830 980,076
Bank hypothecations 1,200,000 1,400,000 1,600,000
Share excellent 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
Advantage and Coercionfeiture Account
Impure sales 6,077,296 6,233,124 5,350,321
Produce – 200,551 – 153,958 – 123,057
Allure sales 5,876,745 6,079,166 5,227,264
Consume 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 Consume Variances
Dissipation charge (121,546) (49,865) (16,051)
Labour consume (182,319) (62,331) (26,136)
(303,865) (112,196) (42,187)
Operating advantage 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
Allure advantage (loss) (38,317) 654,140 769,057
Toll 0 196,242 230,717
Allure advantage cethcoming toll (loss) (38,317) 457,898 538,340
Asia Pacific College of Transaction & Law Semester 2 2020
Resilient’s bank finances the association’s timber dissipations using bills of vary drawn at 90 days from the epoch of acquittal of the shipment. It has to-boot plentiful hypothecation finance to Resilient. The bank league, which is imputpotent coercion revisal soon, requires Resilient to:
? repress a prevalent fitness of 1.2
? repress a shareholders’ excellents to completion goods fitness of at lowest 30%
? repress entireure sales of a narrowness of $100,000 per quarter
? arrange a open design financial announce coercion the year purposeed 30 June 2019 and confess it audited according to Australian Auditing Standards. Appealpotent attributpotent attributablee that this is a requirement of the bank league as Resilient is appealpotent attributpotent attributpotent attributpotent required to yield a open design financial announce subordinate the Corporations Act.
Required – Q3 Chaffer-extinguished 1:
Coercion chaffer-outs (a), (b) and (c) of this interrogation, content inattention completion going solicitude consequences. Domiciled on the setting command overhead and your portraiture of preparatory disquisition agreement aid analytical procedures, tally the cethcomingcited interrogations:
a) Warrant and interpret two (2) asestablished accounts at purposeanger of dramatizeative wrong-statement (6 marks).
b) Recount single (1) conclusion revereing the earlier year’s conditions and interpret why (2 marks).
c) Recount three (3) factors that may produce into interrogation the going solicitude boldness coercion Resilient.
Disconcerning the evaluation of substanceagement’s duty of the going solicitude boldness, shabby recount the remainder of the postulates on your audit planning (6 marks).
[6 + 2 + 6 = 14 marks]
Now, cethcoming examining Resilient’s inferential gauge counterpoise, you appealpotent attributpotent attributableice that single of the payments of the sales and marketing branch is ‘sales benefites’. You interrogation this payment and the association’s accountant informs you that a monthly benefit of 10% of integralowance is hired to completion sales and marketing staff if sales coercion the month yield the budgeted target. The marketing counterpoiseseer is entitled to a 20% benefit if the targets are achieved. This motive was utensiled during the antecedent financial year and was in fix coercion the promiseinal six months of the year. You appealpotent attributpotent attributablee that the benefit has been hired integral month past the motive was utensiled (save coercion the antecedent month, when sales were immensely inferior than expected). This seems a shabby uncommon becaportraiture Resilient had solely achieved its budgeted sales targets in two extinguished of the six months earlier to the start of the project. You summon developments coercion the promiseinal six months of the year and discover that:
? sales were overhead the monthly budget condition when benefites were hired
? there was no suggestive exexchange in impure margins
? give-backs of accumulation sold on the ‘sale or give-back’ basis were well-mannered-behaved-behaved-behaved beneath those in the principal six months save in the latest month of the year
? something-dueors’ equalizes (measured in days extinguishedstanding) were overhead their budgeted equalizes excluding give-backed to a further regular equalize at year purpose.
On pappeal enquiry, the accountant advises that the marketing counterpoiseseer is authorised to do the cethcomingcited with revere to the accumulation sold on a ‘sale or give-back’ basis:
? exhibit customers a ‘sale or give-back’ chaffer as desire as the chaffer is among the association’s pricing structures and the promises of the project
? start and second the invoicing of customers when a sale is made (i.e. if the accumulation is appealpotent attributpotent attributpotent attributpotent give-backed among 60 days)
? start and second the conclusion of security appealpotent attributpotent attributablees coercion these customers when give-backs are made among 60 days or when pricing or character conclusions inaugurate.
Required – Q3 Chaffer-extinguished 2:
Domiciled on the setting command overhead, tally the cethcomingcited interrogations: a) Interpret single (1) inner administer conclusion at Resilient (2 marks).
b) Warrant and interpret two (2) deprivation purposeanger factors at Resilient (4 marks).
c) Warrant two (2) assertions (as defined by ASA 315) at purposeanger as a development of the deprivation purposeanger factors authorized in (b) overhead. Justify your tally with intimation to the setting scenario (6 marks).
d) Recount two (2) audit procedures that would oration possible wrong-statements arising from deprivationulent financial announceing. Enknowing that your procedures are favoring to the scenario and the deprivation purposeanger factors authorized in (b) overhead. You may aim to appeal 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 ruled at its convocation to mean the withholding of AASB 1031 Dramatizeativeity. There were disunited reasons coercion this design which includes: there is no International Announceing Standard equiponderant and it does appealpotent attributpotent attributpotent attributpotent appear affect there get be, past 2005 there has been the gradational withholding of subjoined Australian control from a enumerate of Australian Accounting Standards, and there is now an updated control on dramatizeativeity in the IASB Conceptual Framework.
The superior collision of the withholding of AASB 1031 is the non-location of the favoring accidental control coercion dramatizeativeity. The withholding of AASB 1031 became able to annual announceing initiation on or cethcoming 1 July 2015.
1. Summarize the suggestive exchanges and collision on financial announceing with AASB 1031 Dramatizeativeity (issued by the Australian Accounting Standards Boards – AASB) from 1995 to 2015. (8 Marks)
You can give your tally using a tpotent coercionmat:
Epoch continuance Exchanges in AASB1031 Dramatizeativeity
Standard Collision on financial announceing
2. Earlier to the withholding of AASB 1031 and with intimation to the AASB 1031 Dramatizeativeity (issued by the
Australian Accounting Standards Boards – AASB) and the ASA 320 Dramatizeativeity in Planning and Performing an Audit and ASA 450 Evaluation of Wrong-statements Authorized during an Audit (issued by the Auditing and Selfreliance Standards Board – AUASB), (12 Marks):
a. Define dramatizeativeity.
b. Extinguishedline the leading and accidental guidelines of dramatizeativeity.
c. How the constructs of “materiality” bias the auditors’ professional opinion on wrong-statements?
3. Post withholding of AASB 1031, would this withholding of AASB1031 Dramatizeativeity Standards:
a. harmonise/produce tenor to auditors’ duty of dramatizeativeity wrong-statements or would this produce dissimilitude to auditors’ duty of wrong-statements? Why so?
b. What other bias, if any, this would produce to the auditors’ opinion on wrong-statements and what collisions or implications this would confess on the portraiturefulness of financial announces? Argue your tally and fitnessnale.
(Aid your tallys with the appropriate Australian Accounting Standards and Australian Auditing Standards as well-mannered-behaved-behaved-behaved as authorised/published Peer-reviewed Academic Registers and Designations.) (10 Marks)
NOTE: In tallying Interrogation 4, portraiture APA appealencing mode and aid your tallys with appropriate accounting and auditing standards as well-mannered-behaved-behaved-behaved as published peer-reviewed academic registers. A narrowness of 5 peer-reviewed academic registers is expected. (Hint: this is a immense convenience to utilise the University’s Library Services online such as Library Search, Advance Search, eJournals and Axiomsbases such as EBSCOhost, coercioneseeing.)
[8 + 12 + 10 = 30 marks]
*** Purpose of Provision***