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莫纳什大学ACB3620 2020年第二学期期末考试代考

莫纳什大学ACB3620第二学期期末考试代考

· 案例展示

Semester Two 2020

Exam - Alternative Assessment Task

STUDENT ID:

SURNAME:

GIVEN NAME:

UNIT CODE: ACB3620

UNIT TITLE: Assurance and Audit Services

ASSESSMENT DURATION:           2 hours 40 minutes (includes reading, downloading, and uploading time)

  • This is an individual assessment task.
     
  • This is a closed book exam
  • All responses must be included within this document and under individual questions.
  • Students are required to answer ALL questions.
  • This assessment accounts for 50% of the total in the unit and has a hurdle requirement of 40% to pass the unit.
  • If a calculator is allowed for this assessment, you can use any model
  • Upon completion of this assessment task, please upload this document to Moodle using the assignment submission link.
  • Your submission must occur within 2 hours 40 minutes of the official commencement of this assessment task (Australian Eastern Daylight Time).

Please read the next page carefully and sign and date the Student Statement before commencing the assessment task.

Intentional plagiarism or collusion amounts to cheating under Part 7 of the Monash University (Council) Regulations

Plagiarism: Plagiarism means taking and using another person’s ideas or manner of expressing them and passing them off as one’s own. For example, by failing to give appropriate acknowledgment. The material used can be from any source (staff, students or the internet, published and unpublished works).

Collusion: Collusion means unauthorised collaboration with another person on assessable written, oral or practical work and includes paying another person to complete all or part of the work.

Where there are reasonable grounds for believing that intentional plagiarism or collusion has occurred, this will be reported to the Associate Dean (Education) or delegate, who may disallow the work concerned by prohibiting assessment or refer the matter to the Faculty Discipline Panel for a hearing.

Student Statement:

  • I have read the university’s Student Academic Integrity Policy and Procedures.
  • I understand the consequences of engaging in plagiarism and collusion as described in Part 7 of the Monash University (Council) Regulations https://www.monash.edu/legal/legislation/current-statute-regulations-and-related-resolutions
  • I have taken proper care to safeguard this work and made all reasonable efforts to ensure it could not be copied.
  • I have not used any unauthorised materials in the completion of this assessment task.
  • No part of this assessment has been previously submitted as part of another unit/course.
  • I acknowledge and agree that the assessor of this assessment task may for the purposes of assessment, reproduce the assessment and:
  1. provide to another member of faculty and any external marker; and/or
  2. submit it to a text-matching software; and/or
  3. submit it to a text-matching software which may then retain a copy of the assessment on its database for the purpose of future plagiarism checking.
  • I certify that I have not plagiarised the work of others or participated in unauthorised collaboration when preparing this assessment.

Signature: (Type your full name)

Date:

Privacy Statement

The information on this form is collected for the primary purpose of assessing your assessment and ensuring the academic integrity requirements of the University are met. Other purposes of collection include recording your plagiarism and collusion declaration, attending to the course and administrative matters and statistical analyses. If you choose not to complete all the questions on this form it may not be possible for Monash University to assess your assessment task. You have a right to access personal information that Monash University holds about you, subject to any exceptions in relevant legislation. If you wish to seek access to your personal information or inquire about the handling of your personal information, please contact the University Privacy Officer: privacyofficer@adm.monash.edu.au

MARKS ALLOCATED TO QUESTIONS WITHIN THIS ASSESSMENT TASK

Question

1

2

3

4

5

6

7

8

9

TOTAL

Allocated Marks

12

20

16

24

28

100

Office Use Only

Mark received

Second marking

Question 1

You are employed as an auditor with a mid-tier accounting firm Holt and Peralta. One evening when you are out enjoying dinner, you meet two old friends from university, Terry and Gina. You explain to your friends that you are now working as an auditor, and you talk about the responsibilities that auditors have when conducting audits and issuing audit reports. Gina cannot understand why an unqualified audit opinion does not mean that the financial reports are absolutely true and correct.

Required

  1. What is the audit expectation gap? Discuss four factors that cause the expectation gap.

Please provide your answer in the space below (use as much space as needed)

(6 marks)

  1. Discuss four ways in which the expectation gap can be reduced.

Please provide your answer in the space below (use as much space as needed)

(6 marks)

(Total = 6 + 6 = 12 marks)

Question 2

  1. Describe the cut off assertion and explain the techniques clients might deliberately use to violate this assertion because of pressure to meet sales targets. How might an auditor detect these actions?

Please provide your answer in the space below (use as much space as needed)

(6 marks)

  1. Explain the purpose of prevent and detect controls. Why would it be important for an entity to have both types of controls?

Please provide your answer in the space below (use as much space as needed)

(9 marks)

  1. Fossils Forever is a mining company that has interests in mining for exotic minerals. Fossils Forever has recorded capitalised exploration and evaluation expenditure of $22 million, which is considered by their auditors to be a material amount. No commercially viable deposits have been discovered yet. This issue was raised by the auditors in a meeting with the management, who then agreed to make the following disclosure in the notes to the accounts: “…the ultimate recovery of the Company’s capitalised exploration expenditure is dependent upon the discovery and development of commercially viable mineral deposits and the generation of sufficient future income values there from”. The auditors are satisfied with this disclosure. Advise which audit opinion you would provide for Fossils Forever. Explain why you chose this audit opinion.

Please provide your answer in the space below (use as much space as needed)

(5 marks)

(Total = 6 + 9 + 5 = 20 marks)

Question 3

Charlie Black is an audit manager employed by D&I Partners, a mid-tier accounting firm in Melbourne. Charlie is collecting data to assist in the client continuance decision for the client Green Waste Ltd for the financial year ended 30 June 2019. The following findings have been documented:

  1. In March 2019, D&I Partners undertook an agreed upon procedure for Green Waste valuing the company’s non-current assets. The assets are expected to be a material asset in the Statement of Financial Position at year end.
  1. Green Waste has not paid the audit fees related to the 2018 financial year end audit undertaken by D&I Partners.
  1. Charlie’s partner, Dennis, has recently commenced work as a security guard at Green Waste’s main recycling centre.
  1. Charlie owns shares in the company Red Recycling Ltd. Green Waste has recently acquired all the shares in Red Recycling making it a fully owned subsidiary of Green Waste.

Required

For each of the above situations (i to iv):

  1. Identify and explain the threat to auditor independence that is implicated.

(8 marks)

  1. Your conclusion on whether independence is likely to be impaired. Provide justification for your answer.

(8 marks)

(Total = 8 + 8 = 16 marks)

a) Threat to independence (4 x 2mks = 8 mks)

b) Conclusion and justification (4 x 2mks = 8 mks)

(i)

(ii)

(iii)

(iv)

Question 4

You are currently planning the audit of Fleming Pty Ltd for 30 June 2020. Fleming is a large proprietary company involved in the importation of mechanical equipment from India. Your assistant has calculated the following ratios in order to assist you in identifying potential audit risk areas:

Ratio

Unaudited 30/6/2020

Audited 30/6/2019

Industry Average

Gross profit margin (gross profit /sales)

60%

50%

52%

Operating expenses (operating expenses/ sales)

19%

20%

18%

Times interest covered

3 times

3 times

4 times

Profit margin (profit after tax/sales)

4.50%

3.91%

5.15%

Inventory turnover

1.56 times

1.95 times

2.15 times

Accounts receivable collection period

80 days

65 days

65 days

Current (current assets/current liabilities)

1.45:1

1.20:1

1.45:1

Quick (current assets less inventory/current liabilities)

80%

80%

100%

Return on equity (profit/capital)

19%

16%

18%

Total Debt to Equity ratio

50%

50%

55%

Additional information:

  • During the year ended 30 June 2020, the company doubled its non-current bank loan.
  • Sales have increased by 20% in the 2020 financial year.

Required

Based on the above information:

  1. Identify four accounts at risk of material misstatement and explain why each account is at risk.

(8 marks)

  1. For each account identified in part (a), identify an assertion at risk of material misstatement and explain why the assertion is at risk.

(8 marks)

  1. For each assertion identified in part (b), discuss a test of control or substantive procedure that the auditor should conduct.

(8 marks)

(8 + 8 + 8 = 24 marks)

Please provide your answer in the space below (use as much space as needed)

(a) Account at risk and explanation (4 x 2mks = 8 mks)

(b) Assertion at risk and explanation (4 x 2mks = 8 mks)

(c) Test of control or substantive procedure (4 x 2mks = 8 mks)

1.

2.

3.

4.

Question 5

Alto Ltd is the manufacturer of a high-tech smart watch, known as the Constellation. The Constellation was launched on 1 January 2020 and is the first smart watch of its type to incorporate advanced health monitoring and is capable of diagnosing and monitoring common diseases and other health conditions. The Constellation is Alto’s main product line, along with a range of Constellation accessories such as charge docks and replacement wrist bands.

The Constellation retails for $5,499 and is currently only available to purchase directly from the three Alto retail stores, which are located within the busy Melbourne shopping district. Alto has consistently maintained a high level of security within its stores. Recently, however, the full-time security guard at the Bourke St store resigned from their position. Alto has yet to hire another security guard and so the sales staff have taken on the security duties in addition to their own sales tasks.

Alto operates its main factory in a south-eastern suburb of Melbourne, where 60 full-time staff and 24 part-time workers are employed. As the technology is so advanced, many of the watch parts are imported from the company’s main supplier in China. Alto experienced some problems with the manufacturing of the Constellation leading up to the launch date, when it was discovered that manufacturing equipment in the factory was not operating effectively. This delayed the production of the Constellation, and as a result, Alto employed a large number of casual workers to ensure the launch deadline was met. During this time, product testing was scaled back and stocktakes, which had previously been conducted on a monthly basis, were postponed until after the launch date.

Required

  1. Define audit risk and the three components of the audit risk model.

Please provide your answer in the space below (use as much space as needed)

(6 marks)

  1. Describe five inherent risk factors and assess inherent risk for Alto.

Please provide your answer in the space below (use as much space as needed)

(8 marks)

  1. Describe five control risk factors and assess control risk for Alto.

Please provide your answer in the space below (use as much space as needed)

  1. Explain the effect of the above risk assessments on detection risk, preliminary materiality level, and the audit strategy for Alto.

Please provide your answer in the space below (use as much space as needed)

(6 marks)

(Total = 6 + 8 + 8 + 6 = 28 marks)

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