This weakness has not stopped Andy moving up the ladder, but slow expansion

VICTORIA UNIVERSITY COLLEGE OF BUSINESS BAO5524 PROFESSIONAL AUDITING SEMESTER 3, 2017 AUDITING ASSIGNMENT Due on Sunday, 4 February, 2018 at 11.59pm Max. 3000 words 20 marks Table of Contents SECTION I Case Study on Ethics ________________________________________________ 2 SECTION II Case Study using ActiveData for Excel _________________________________ 3 Submission Instructions ______________________________________________________ 4 1. Assignment submission _______________________________________________________ 4 2. Referencing and style ________________________________________________________ 4 3. Preventing plagiarism ________________________________________________________ 4 ASSIGNMENT FEEDBACK SHEET AND MARKING GUIDE _____________________________ 6 GROUP DOCUMENTED MINUTES ______________________________________________ 7SECTION I CASE STUDY ON ETHICS Andy Smith is a promising senior manager beginning his tenth year at his firm. Andy has been a steady performer during his career and is known for his technical and personal skills. Not all the firm’s partners are enthusiastic about Andy. His track record for bringing in new clients has been marginal. This weakness has not stopped Andy moving up the ladder, but slow expansion in the client base has meant that the firm has not made a new partner for three years. Andy is well aware that his ability to bring in new clients is critical to his aspirations to become a partner. Office Supplies (OS) Ltd, a large supplier of office products, furniture and technology, has decided to put its audit and related accounting services out for tender. OS’s current auditor performs significant non-audit services. In fact, fees for non-audit services are well in excess of the audit fee. Andy has been given the primary responsibility for developing and presenting the tender to OS’s board of directors. He has nearly completed preparations for the presentation and has discussed all the specifics with two partners who will have a significant involvement in servicing the audit and related service needs of OS, should the firm be successful in its tender. As required by the board of OS, a detailed outline of the proposal presentation and itemised preliminary budget were submitted nine weeks in advance of the presentation. On the Monday evening before the presentation, Andy’s wife receives a call from her sister, Lisa. Lisa’s flatmate, Silvya, is the secretary of OS’s managing director. Silvya noticed that one of the proposal presentations was going to be done by someone named Andy Smith and asked if it was the same Andy Smith who was married to Lisa’s sister. Lisa said it was and Silvya began to tell her about some of the proposals. Silvya had said she noticed several things about the managing director’s evaluation of the proposal submitted by Andy’s firm. First, the bid was significantly higher than one of the other bids. Second, the managing director had mentioned two items of major importance that had been left out of the proposal. Silvya could not remember these items ‘off the top of her head’, but she told Lisa she would be willing to run off a copy of the memo if Lisa wanted her to. Andy’s wife tells him about the call from Lisa at dinner that evening. Required: (a) Consider the ethical issues, in relation to Andy, Andy’s wife, Andy’s firm, Lisa, and Sylvia. (b) Recommend the most appropriate course of action that Andy should take that will be in compliance with the spirit and form of the professional standards, and/or the Corporations Act 2001. Cite relevant references where appropriate.SECTION II CASE STUDY USING ACTIVEDATA FOR EXCEL You have been assigned to the audit of inventories for GHT Ltd. (GHT) for the year ended 31 March, 2018. GHT sells a wide variety of hardware products to retail outlets. All inventory is purchased for resale directly from manufacturers and the inventory items are located in a single warehouse. GHT maintains computerised perpetual inventory records and uses the first-in first-out (FIFO) inventory method for external financial reporting. Due to time restraints and remote location of the warehouse, you were unable to attend the physical stocktake of the inventory at the end of the financial year. However, GHT’s accountant, Steven Day, advised you that there were no material discrepancies found between the physical stock count and perpetual records of the inventory. At your request, Steven emailed you an electronic listing of the inventory (GHT_Inventory.xls) on 15 May, 2018, along with the financial reports for the year ended 31 March, 2018. The inventory on hand at 31 March, 2018 was reported at $455,319.55. Required: (a) Identify the key financial report assertions for the audit of inventory at GHT Ltd. (b) Perform audit procedures, using the “Active Data for Excel” add-on to Microsoft Excel to address the assertions identified in (a). The inventory listing of GHT Ltd., GHT_Inventory.xlsx, is posted on the VU Collaborate homepage of BAO5524. GHT_Inventory File Record Field Description Prod. no. Product No. Prod. name Product description Unit Cost Unit Cost Sales Price Sales Price PQTY Quantity last purchased SQTY Quantity last sold Stock To Date Stock available for sale LPDATE Last Purchase Date LSDATE Last sales date COS Cost of Sales Sales Sales Revenue Submit the following documentation: i) the excel file generated. The file should be labelled with your Group name. ii) a report summarizing the following: a) The audit assertions and objectives tested; b) detailed procedures utilised to achieve each of the audit objectives. c) outcome of your procedures, and d) further audit implications.SUBMISSION INSTRUCTIONS 1. Assignment submission i) The assignment is to be submitted electronically by groups of three or four students as per self-allocation to a group on VU Collaborate. Please allocate to a group by 21 January, 2018. ii) Groups must assign a leader and keep all records of meetings and tasks assigned to group members. Students must meet physically or electronically at least three times before submitting the assignment. Meeting records must be attached at the end of your assignment. A suggested meeting log is attached. iii) Submission of this assignment by the due date is compulsory for the successful completion of the subject. iv) The assignment must be submitted to Turnitin via a link on VU Collaborate. Only a single copy should be submitted by one team member or team leader. v) The Turnitin/Dropbox Similarity Report should be no more than 30%. vi) Each member of the team must complete, scan and submit the Assignment Cover Sheet along with the assignment. Late submission without the extension approval from your unit coordinator will be penalised at 1 mark (out of 20) per calendar day. vii) Completed extension application form must be submitted to your unit coordinator at least three days in advance of the due date. viii) Students are responsible to protect their work and save data by making necessary backup. Loss of data due to a computer or storage devices problems will not be considered a legitimate reason for an extension. ix) Students should keep a copy of their assignment until their result for the unit is finalised. 2. Referencing and style a) The presentation should be clear, concise and accompanied by expository text accessible to the reader b) The presentation of the entire assignment should be written in English of an appropriate academic register and a format and standard of presentation acceptable to business study c) Assignment should be double spaced with left and right margins of 2.5cm and top and bottom margins of 2.5cm. It must be typed in Microsoft Word using Times New Roman, 12 font size. d) The assignment is required to use a Harvard referencing style (see VU library for Referencing Style guides https://www.vu.edu.au/library/accessborrowing/search-browse-resources/library-guides) e) Assignment without proper referencing (in text and end of text) will be subject to substantial deduction of marks. This
may result in the assignment being marked zero. 3. Preventing plagiarism 3.1 Academic Honesty and Preventing Plagiarism Policy Plagiarism is defined as ‘The practice that involves use of another person’s intellectual output and presenting it (without appropriate acknowledgement) as one’s own’. Examples of plagiarism:ï‚· Word-for-word copying of sentences/paragraphs in an assignment without acknowledgement or with insufficient or improper acknowledgement; ï‚· Downloading essays or assignments from the web and presenting these for assessment; ï‚· Presenting another student’s work or research data as the student’s work; ï‚· Copying out parts of any text without acknowledging the source(s). This may be written text, structures within texts, diagrams, formulae, sound files, still photographs, audiovisual material (sound and image files), graphics/animations/multimedia objects, other computer based material, mathematical proofs, art objects, products and others. This can be done as verbatim copying or paraphrasing. ï‚· The use of someone else’s concepts, experimental results, experimental conclusions or conclusions drawn from analysing evidence or arguments without acknowledging the originator of the idea(s) or conclusion(s). 3.2 Students are responsible for: ï‚· Understanding and respecting the University’s policies and procedures regarding plagiarism, collusion, and other forms of academic misconduct, and as such should only submit work for correction or academic credit that is their own or that properly acknowledges the ideas, interpretations, words or creative works of others; ï‚· Avoiding the lending or making accessible original work to others; ï‚· Being clear about the appropriate referencing rules that apply to their field of study; ï‚· Refusing to be a party to another student’s efforts to undermine the academic integrity of the University. ï‚· Seeking assistance with their learning and assessment tasks if they are unsure of appropriate forms of acknowledgement.ASSIGNMENT FEEDBACK SHEET AND MARKING GUIDE VICTORIA UNIVERSITY, COLLEGE OF BUSINESS BAO5524 PROFESSIONAL AUDITING, SEMESTER 3, 2017 STUDENTS GROUP MARKS Max SECTION I (i) Abstract 6 (ii) Introduction 6 Part (a) Andy’s wife, Lisa, and Sylvia 18 Part (a) Andy and Andy’s firm 20 Part (b) 30 Conclusion 6 Bibliography, referencing and citations 7 Presentation, English expression, coherence, grammar and spelling 7 SECTION II (a) Identify the key financial report assertions for the audit of inventory (explain reasons for selecting the assertions) 25 (b) Use of “Active Data for Excel” add-on to Microsoft Excel to audit Accounts Receivable balance of GHT Ltd. as at 30 June, 2013.(Five tests required – Excel file marked) 25 Report summarizing the following: i) The audit assertions and objectives tested; 5 ii) detailed procedures utilised to achieve each of the audit objectives. 10 iii) outcome of your procedures, and 10 iv) further audit implications. 15 Presentation (for Section B) 10 Total 200 Divide by 10 to give a mark out of 20. 20GROUP DOCUMENTED MINUTES __________________________________________________________________________________ Date of Meeting:______________________________ Time Meeting began:__________________________ Time Meeting ended:__________________________ Location of meeting: online / VU campus other:_____________________________________ Attendees:___________________________________________________________________ Apologies from any absent members:______________________________________________ Agenda of Meeting: Minutes of Meeting: Agreed Actions: Time Date and location of next meeting:________________________________________________ Signatures of all attendance:

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