Recent Question/Assignment

QUEENSLAND UNIVERSITY OF TECHNOLOGY
QUT Business School - School of Accountancy
AYB301 Audit and Assurance
SUMMER SEMESTER 2019/2020
Assessment 2: Group Project – Audit Planning
(Weighting Total – 30%)
Due Friday 24th January at 11.59pm
Group Formation Your group of 4 will remain the same as the group you were part of in Assessment 1 (unless agreed with Unit Coordinator)
Working in a group You will now work with that group for the assessment task. You can use the email in this group area to communicate with group members and also save and share files between the group members.
Group Task ? Complete the Brookgrove Entertainment Ltd (BEL) Current File- Audit Planning Work Papers in the excel file provided on Blackboard under Assessment Assessment 2
? Submit the completed excel file online at the Group Project Submission link at Assessment Assessment Item 2: Group Project in AYB301 Blackboard site.
• Only one group member needs to submit on behalf of the group.
• Blackboard will automatically link all group members to this submission
• All marks and feedback will be provided electronically via Blackboard back to all group members.
Individual Task Each Student in the unit must also undertake a group project peer evaluation survey at Assessment Assessment Item 2: Group Project by the due date and time.
Weighting Submission of completed BEL Current File Audit Working Papers (22%)
Individual Peer Evaluation Survey (5%), Team Minutes (3%)
Grading will be based upon the text that is within the word limit (or 10% above)
Length Word Limit (2000 words +10% maximum)
Note: The analytical review worksheet and the Trial Balance worksheet are not counted as part of the submission word count.
This assessment item assesses the following learning outcomes and AoL goals:
PC3.1 Professionally communicate accounting and legal knowledge, advice and recommendations in written forms to both accountants and non-accountants.
HO2.1 Investigate real world business issues and situations through the effective analysis, evaluation and synthesis of theory and practice
TS4.2 Apply teamwork knowledge and skills to work effectively with others across diverse accounting purposes and contexts.
SE5.1 Demonstrate and apply knowledge of ethical and regulatory perspectives relating to professional accounting.
Late Assessment and Extensions
As the group project is an assessment that involves a group of four students and the group has a number of weeks to complete the assessment task, students will be unable to apply for an extension via the QUT Late Assessment Policy. Further information on late assignments and extensions can be found at https://www.student.qut.edu.au/studying/assessment/extension. The MOPP Policy relating to Late Assessment and Extensions can be found here: http://www.mopp.qut.edu.au/E/E_06_08.jsp

AUDIT PERMANENT FILE INFORMATION – With reference to the information you considered in Assessment 1 for SLD Chartered Accountants and BEL.
SLD have resolved any ethical, legal and client evaluation issues and have signed the engagement letter with Brookgrove Entertainment Ltd (BEL) to undertake the BEL audit for June 30, 2019. The following information is additional to the Permanent File contents for SLD and BEL:
Siu, Love & Dixon (SDL) Chartered Accountants
• SDL agreed upon an appropriate audit fee to be charged to BEL for the audit for the year ended 30 June 2019 which is consistent with the level of work required to form an opinion.
• Arabella Lee’s father, Jason, sold his shares in BEL prior to the audit engagement being accepted by SDL.
• As Cameron Mellifont had completed a temporary assignment at BEL during the year, it was decided he will not be involved in the 30 June 2019 audit. SDL recently employed a new intermediate auditor, Richard Butler, who has been assigned to take Cameron’s place on the BEL audit team. He has recently moved to Brisbane from Adelaide, where he spent two and a half years in audit at a middle-tiered firm.
• Arabella Lee is aware that she must respect the confidentiality of information acquired as a result of professional and business relationships.
Audit Client – Brookgrove Entertainment Ltd (BEL)
• Prior to the audit being accepted, BEL paid the outstanding business services fee to SDL for work previously provided by Daniel Siu.
• A new independent member has been appointed to the Audit Committee and BEL are in compliance with ASX’s Corporate Governance Principles and Recommendations.
• BEL have agreed that SDL will have access to all Board minutes throughout the audit process as they understand the importance of this for the auditors to gain sufficient appropriate audit evidence and for SDL to provide a high quality audit.
• As Brendan Mills had anticipated, the potential court case that may have been initiated by a company BEL were considering taking over, did not eventuate.
PLANNING THE AUDIT OF BEL 2019 (22%)
To start the planning process, Lucy Anderson (Audit Engagement Manager), Matthew Croker (Senior Auditor), Gerard Love (Audit Engagement Partner), and Bob Carroll (Audit Review Partner) had an initial meeting with the CEO and CFO of BEL. They provide the audit team with the following information from their meeting:
? Lucy has started the Current Audit File for BEL by setting up the work paper and worksheet templates for the:
? Planning Meeting Work paper (AP1) - to be used in preparation for the audit team planning ‘brainstorming’ meeting
? Analytical, Materiality and Risk Work Paper (AP2)
? Analytical Review Worksheet (AP2.1)
? Materiality Calculation Worksheet (AP2.2)
? BEL Trial Balance Analysis and Audit Risks (AP2.3)
? Meeting notes taken at discussions with BEL Senior Management (ACM1.1)
Further details on the purpose of each of the work papers is provided below.
Your group has been assigned to work with Lucy’s audit team. Lucy, together with Matthew, Richard, Arabella and your group (you are the new graduates) are about to start planning for the audit of BEL for the year ending 30 June 2019. This is a new audit engagement for SLD. Lucy has advised your group that any clarifications of the information provided should be addressed to herself or Matthew in the first instance.
Client Meeting Notes ACM1.1 provides the notes from the meeting between Gerard, Bob, Lucy, Matthew, Brendan and Genevieve discussing the key management assumptions and accounting treatment of the items in the Trial Balance.
The AEP Gerard Love and ARP Bob Carroll have invited the whole audit team to a planning ‘brainstorming’ meeting to discuss:

? The potential audit risk areas and their impact on the BEL 2019 audit
? The potential strategy for the conduct of audit of BEL for 2019
? Performance Materiality issues and concerns
? Possible fraud or scepticism issues
As new graduates, Lucy has asked your group to work together to prepare the following audit documentation for the audit planning “brainstorming’ meeting. Complete the documentation in the order listed below. Lucy has agreed to provide additional information to the graduates if needed to clarify any information provided.
AP2.3 -Trial Balance Analysis & Risks Worksheet
This is a supporting worksheet that provides audit planning details of all trial balance accounts for BEL and shows the final June 2019 balances (actuals as processed) and the comparative full year audited account balances for 30th June 2018.
• You will need to complete the trend analysis columns in this worksheet
• Determine an initial assessment of the overall risk of material misstatement at an account balance level
• Interpret the variance and percentage movement information
• Identify the impact on the audit plan for those account balances you deem most important to the audit
This worksheet includes determining the potential high level audit approach for BEL based on our knowledge of the TB accounts in question. SLD must determine whether to use a lower assessed level of control risk approach OR a predominantly substantive audit approach.
In completing the “High/Medium/Low Preliminary Assessment of Risk” column, you are determining an initial assessment of the overall risk of material misstatement. You may like to consider Inherent Risk, Control Risk and Detection Risk in your group discussions to arrive at the level of overall risk of material misstatement.
This worksheet will assist your group to complete AP2 Analytical Review, Materiality and Risk work paper and record the overall audit materiality from AP2.2 Materiality Calculation worksheet in Row 8 of AP2.3 the Trial Balance worksheet.

AP2.2- Materiality Calculation Worksheet
This worksheet will assist your group to calculate the overall materiality and the performance materiality for BEL, by comparing the data from 2018 and 2019 from AP2.3 Trial Balance Worksheet. Each group will need to discuss this information in the AP2 – Analytical Review, Materiality and Risk work paper.
This worksheet will assist your group to complete AP1 Planning Meeting work paper, AP2 Analytical Review, Materiality and Risk work paper and AP2.3 Trial Balance worksheet.
AP2.1- Analytical Review Worksheet
This is the supporting worksheet for the Analytical Review, Materiality and Risk work paper. It will assist the group to calculate and consider the ratios for the current year 2019 and compare with calculations of the same ratios for the prior year 2018.
The group will need to use the Trial Balance figures to calculate the ratios and you are expected to use Excel formulae to automatically link between the Trial Balance worksheet and the Analytical Review worksheet.
You can insert a legend for your calculations if that assists you in analysing information.
This worksheet will assist your group to complete AP2 Analytical Review, Materiality and risk work paper.
AP2 - Analytical Review, Materiality and Risk Work Paper
This work paper will summarise the findings from the analytical review, materiality and risks identified from the Trial Balance worksheet.
Each group will need to bring forward a summary of the key concerns and impact of materiality from the above worksheet analyses.
This worksheet will assist your group to complete AP1 Planning Meeting work paper.
AP1 - Planning Meeting Work Paper (Lead Schedule)
This work paper should include the key findings of your group’s brainstorming from all the information provided and the completed work papers and worksheets. The focus of this work paper is to identify the key impacts on the audit plan for BEL for the 2019 audit with sufficient detail for your group to present and discuss at the audit planning team meeting. The group will need to consider all the other work papers and worksheets in completing this work paper.

PEER EVALUATION OF GROUP PROCESSES – Completion of Survey, Meeting Minutes & Team Contract (8%)
Each Student in the unit must individually complete the Group Project Peer Evaluation Survey under Assessment Assessment Item 2: Group Project in the AYB301 Blackboard Site.
This online assessment is a required element of the group project assessment task and is summative in nature (worth 5%). You will be required to answer a series of questions about how individual members of your group managed the group project process. In addition your team minutes will also form part of this assessment process (3%).

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