Reference no: EM132389810 , Length: word count:3000

FNS60217 Advanced Diploma of Accounting
FNSACC602 Audit and Report on Financial Systems and Records
ALTEC College

Learning Outcomes

On successful completion of this unit, the learner/trainee will be able to;

• Assess options
• Identify information sources
• Determine audit strategies
• Schedule resources and timelines and monitor progress
• Review data and verify statements
• Determine reporting formats

Assessment Task 1:
Case Study: Woolworths

In this task, you will be provided with a copy of Woolworth's 2011 annual report. Based on the annual report and your research of the company (company website, media reports and analyses), answer the following questions;

Q1. What is the purpose of an annual report? Explain its significance to the business.
Q2. What company's objectives and obligations of reporting would you identify from the report?
Q3. Who is the auditor?
Q4. What are the main items covered in the auditor's report
Q5. What are the main items covered in the directors' statement?
Q6. What are the main items addressed in the corporate governance statement
Q7. What risk management policies are discussed?
Q8. What does the company say about corporate ethical standards?
Q9. Provide examples from the accounts of the accounting principles of materiality, comparability, conservatism and consistency.

Assessment Task 2:
Practical Task: Plan for a Balance Sheet Audit

This exercise is aimed at developing and understanding of the audit and reporting process and skills in planning and conducting audits of balance sheet items including assets, liabilities, income, and expenses based on general auditing principles.

This task provides an opportunity to;

• Develop/enhance an understanding of the balance sheet accounts
• Analyse the relationships between balance sheet and income statement accounts
• Develop and apply audit techniques for certain balance sheet accounts
• Use analytical procedures and approaches in auditing

You will be provided with a sample balance sheet; alternatively, you may use the balance sheet used in the previous tasks.

As an actual audit of balance sheet will require an examination of actual financial data such as bank statements, receipts, transactions, and actual reconciliations, in this task, you will assume a "preparatory" role of an auditor and develop an audit strategy ("how to" approach) for auditing balance sheet of a client organisation. You may use the organisational context used in the previous task (Assessment Task1).
Organisational context is the key as it provides a basis for management decisions and financial/investment activities.
Using and organisational context prepare an audit strategy; how will be audit following balance sheet items; Cash and Bank Balance
Account Receivable
Fixed Assets Liabilities
Investment (or Loans) In addition;
• Describe the purpose and significance of the audit
• Include an overview of legal (legislative) and compliance (AASB) information and references to specific laws/regulations and standards pertaining to financial reporting and auditing
• Describe company's responsibility for reporting, governance and record-keeping as a public company
• Outline governance and internal control issues that will be relevant to the audit
• Audit procedure and auditor's approach to audit (specific tasks that the auditors will perform)

• Analytical procedures (e.g. variation, trend, ratio) to be used and their significance

Assessment Task 3:
Develop an Audit Plan: Fortescue Metal

In this task, you will be required to assume the role of a member of an audit team appointed to audit the financial reports of one of the ASX listed companies. This is an individual task. However, your trainer/assessor will play the role of audit team leader and provide you with necessary instructions and information to complete this task. Ideally, this task should be completed in parts in tandem with the relevant learning sessions during the allocated assessment times.

Read the following company brief and complete the given task. You may have to research more company information.

Task:
As part of the audit team appointed to audit Fortescue's 2011 financial reports and identify any inconsistencies in its reporting and internal controls, you have been delegated with the task to prepare a draft audit plan and template for team's review. Prepare an audit plan and template covering the following elements;

• Executive summary
• Company brief and market/industry developments
• Audit purpose and objectives
• The legal and statutory requirements relevant to the financial audit
• Auditor's role, responsibilities and ethical guidelines
• Audit methodology
• Audit strategies and line of enquiry
• Materiality estimation and allocation

• Control environment evaluation (Summary of company's financial policies and internal control systems)
• Risk assessment and contingency plans
• Audit test program
• Audit timeline, milestones and evaluation
• Matters to report to management
• Data storage, access and security procedures

The above must be covered in the audit plans and could be used as guides for headings/sections of the plan. The audit plan should be word-processed and written as a formal document for presentation to senior management and the audit team.

You will need to prepare two separate documents; The Audit Plan and the Audit Template.

Attachment:- Audit and Report on Financial Systems and Records.rar