Reference no: EM131650
The Virgin brand entered the Australian aviation market in 2000 in competition with Qantas and the other major airlines and launched Virgin Australia in 2011. (Further information relating to Virgin Australia is available from their website- it is suggested that you have a look at the media link for some additional information that might be helpful):
You will be required to assess and analyse Virgin Australia from an auditing perspective, in the period leading up to reporting periods ending on or after 30th June 2013. Always think "audit" - what could possibly go wrong that might affect the reliability of the financial reports!!
You are encouraged strongly to use the Internet and other media to assist you in collecting further information relating to Virgin Australia. To do well in the assignment, it is expected that you will undertake research on the entity beyond merely the Virgin Australia homepage and their annual reports.
Problem
Required:
(a) From your research, identify four (4) issues or events (accounting or otherwise) that may have an impact on the planning of the audit of Virgin Australia for years ending on or after 30th June 2013.
1. Students should use initiative in answering this question. Remember auditors are trying to find conditions or events that might give rise to material misstatement. Whilst not necessarily related to Virgin Australia, ASA 315 provides some examples of common conditions and events that may indicate the existence of 'risks of material misstatement'. Please go to Appendix 2 of ASA315 of your Auditing Handbook for a broad categorisation of possible events or conditions that might possibly apply to Virgin Australia. Please be warned however that you MUST demonstrate clearly (with substantive research evidence) that an identified issue relates specifically to Virgin Australia and the planning of its audit.
2. Inclusion of evidence of research is critical. Do NOT merely use information from the company's financial reports - to score well you must find independent research evidence to support the issue. Better quality research = better quality marks.
(b) State what audit evidence you would gather in order to gauge the issues identified in part (a) above, for inclusion in the planning strategies for the audit of Virgin Australia.