School of Business & Law
ACCT20040 – Auditing and Ethical Practice
ACCT20075 – Auditing and Ethics
Assessment Task - Term 1, 2016
The object of this assignment is to assist students to develop critical analysis skills in relation to the auditor’s legal liability to their client, contributory negligence and the extent to which an auditor is liable to third parties.
This is a written assessment with a weighting of 30%. A marking rubric has been provided to assist you with the marking scheme for this assessment task. The written assessment is to be presented in report format, the report is due on Thursday 30st March 2016 at 11.45pm AEST. The report is to have a maximum length of 1,000 words.
Context
You have graduated with your accounting degree and recently commenced work with a leading firm of public accountants in Queensland. The firm has been auditing the financial reports for Opium Shopping Centres for a number of years, however, information has just been received by the firm’s audit partner that could have serious repercussions for the firm. As a recent University graduate with top marks in your audit course, the firm’s audit partner has asked you to prepare a report for the audit team.
Background information
Opium Shopping Centres has borrowed heavily in recent years. The pressures of rapid expansion have been felt within its finance department and the chief financial officer (CFO) has begun to make mistakes. The CFO neglected to reclassify some of its debts from non-current liabilities to current liabilities following default on some terms of the contract with an international banking syndicate, and omitted contingent liabilities from the notes to the accounts. The billion dollar mistakes were not detected by either the directors or the auditors,
and the financial report and audit report were published. Following discovery of the mistake the shares in Opium Shopping Centres lost value rapidly and the company was placed into liquidation.
Assignment Requirements
The audit partner requires a written short report to be presented in simple language and in an interesting, easy-to-read format. It should:
Discuss the auditor’s liability for losses suffered by:
i. Opium Shopping Centres investors, and
ii. other parties
Formatting Requirements
Please note that penalties will apply for not following the formatting instructions.
The Report will consist of:
• Cover page which shows the title of the report, the author (Student name and ID number) and the word count
• table of contents
• a one-page executive summary
• the report itself
• references
Presentation. The report is required to be prepared in 1.5 line spacing, using a Times New Roman 12 point font, with 2 cm margins on all sides (remember penalties apply for not following instructions). You are required to cite at least three (3) current sources which should include items from the following categories: academic literature, textbooks, media, and websites. It is vital that the sources used are reliable, reputable, and relevant, cited in an accurate manner and properly referenced using the APA or Harvard method. (Please note: Do not include lecture slides in your list of citations, you are expected to refer to the abovementioned sources)
The report should be presented in simple language and in an interesting, easy-to-read format.
Digital file. The entire document is to be prepared in an electronically-friendly document format as a single file.
Submission. The report is to be submitted online through the Moodle site for this unit.
Note: Assignments will be checked for plagiarism and ghost writing
The total word length should be no more than 1000 words, (excluding the reference list). You must include your word count on the cover page.
ACCT20040/ACCT20075 Auditing Assignment – Term 1 2016 – Assignment Criteria Sheet Grade 7 6 5 4 4 Mark
i) Evaluate critically significant accounting issues and legal liability to clients with reference to relevant Standards and/or Corporations Act. Comprehensive and well-judged application of accounting issues and auditor responsibilities with reference to relevant Standards and/or Corporations Act.
(8.5-10 marks) Effective and well-judged application of accounting issues and auditor responsibilities with reference to relevant Standards and/or Corporations Act.
(7.5-8.5 marks) A reasonable well-judged application of accounting issues and auditor responsibilities with reference to relevant Standards and/or Corporations Act.
(6.5-7.5 marks) Some application of accounting issues and auditor responsibilities with reference to relevant Standards and/or Corporations Act.
(5-6.5 marks) Little application of accounting issues and auditor responsibilities with little or no reference to relevant Standards and/or Corporations Act.
( 5 marks) /10
ii) Evaluate critically significant arguments relating to auditor liability to third parties with reference to an appropriate case law Comprehensive and well-judged identification of legal arguments available to third parties, including how an appropriate legal case would support a third party claim and other guidance available to third parties who rely on the audited financial report.
(8.5-10 marks) Effective and well-judged identification of legal arguments available to third parties, including how an appropriate legal case would support a third party claim and other guidance available to third parties who rely on the audited financial report.
(7.5-8.5 marks) A reasonable well-judged identification of legal arguments available to third parties, including how an appropriate legal case would support a third party claim and other guidance available to third parties who rely on the audited financial report.
(6.5-7.5 marks) Some identification of legal arguments available to third parties, including how an appropriate legal case would support a third party claim and other guidance available to third parties who rely on the audited financial report.
(5-6.5 marks) Little identification of legal arguments available to third parties, including how an appropriate legal case would support a third party claim and other guidance available to third parties who rely on the audited financial report.
( 5 marks) /10
Preparation of a report for the audit team as directed by the audit partner Response to task is comprehensive and concise. Report written in a clear, logical and structured manner and communicates points to the audit team in an interesting and easy-to-read format. Correct spelling, punctuation, grammar and referencing.
(8.5-10 marks) Response to task is comprehensive. Written in a clear, logical and structured manner and communicates most points to the audit team in an interesting and easy-to-read format. Mostly correct spelling, punctuation, grammar and referencing.
(7.5-8.5 marks) Response to task is adequate. Written in a reasonably clear, logical and structured manner and presenting some valid points to the audit team. Some spelling, punctuation, grammar and referencing mistakes.
(6.5-7.5 marks) Response to task is adequate. Writing lacks clarity and structure. Response presents some valid points to the audit team. Several spelling, punctuation, grammar and referencing mistakes.
(5-6.5 marks) Response to task was unclear, illogical and unstructured. Little or no presentation of valid points to the audit team. Unsatisfactory spelling, punctuation, grammar and acknowledgement of sources.
( 5 marks) /10
Total Mark (30)