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AUDITING AND ASSURANCE SERVICES

T2, 2022/2017

Task 2: Group Assignment
(Total Marks – 30)

GENERAL INFORMATION
As per the Course Description, this assignment constitutes 30 % of the total assessment in this course and
is due at the end of week 10 of the semester. Submission will be electronic copy via the assignment
submission drop-box under the Assessment tab in Moodle. Only one copy of the assignment is to be
submitted per group.
PURPOSE
The BUACC5935 course considers the audit function as it relates to the assurance engagement
framework and how legislation and accounting and auditing standards provide guidance on completing
the audit. Topics covered in the course include auditor independence, ethical threats and safeguards; client
acceptance; management assertions; audit risk; the internal control environment; audit sampling; the
attainment of sufficient and appropriate audit evidence; auditor liability; and audit reporting. Each topic is
introduced by a critical and integrative review of key theoretical concepts that are then applied to practical
settings.
The main purpose of this assignment is to provide students with the opportunity to apply the knowledge
and skills acquired during the semester to a practical task involving the use of ‘real-world’ accounting
information. In particular this will enable you to gain insights into and information about one of the
following companies using the published financial statements of the company as your primary data
source. And you are required to choose ONE of the following eight companies as your target company:
1. Afterpay Limited
2. Amcor Plc
3. BHP Group
4. Commonwealth Bank of Australia
5. JB Hi Fi Limited
6. Qantas Airways Limited
7. Telstra Corporation Ltd
8. Woolworths Group
This is intended to consolidate students’ accounting knowledge and skills. Students are required to
complete the assignment in groups maximum number per group are THREE and this is intended to
foster the development of the co-operative work skills that will be of importance in most employment
contexts.

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Dr Hassan Elhawary
BUACC5935: AUDITING AND ASSURANCE SERVICES
Task 2: Group Assignment
ASSESSMENT DETAILS AND REQUIREMENTS
Students are to organise themselves into groups of THREE to complete the assignment and do not have
automatic entitlement to adopt some other arrangement (such as completing the assignment individually
or in a larger group). Students who have difficulty finding a partner or who encounter other difficulties
(for example, their partner withdraws from the course) should consult the Lecturer/ Tutor. And you need
to send your group member names and IDs to your lecturer/ Tutor.
REQUIREMENTS
You are working for a large audit firm, Melbourne & Associates (M&A) where the office is located in
Melbourne. Based on your selected company’s annual report, the audit partner, Mr John Park, has advised
you to prepare a planning memorandum which includes the following:
1. Describe the core business of the company and explain how why gaining on understanding of the
client’s business is so important to auditor.
2. Identify four major business risks of the company and provide a detailed explanation of why each
factor is identified as a risk to the business.
3. *Results of analytical procedures: (1) You are required to prepare a key financial ratio analysis from
your selected company’s Consolidated Financial statements. (Note: Include your workings in the
Appendix). (2) You need to identify and explain which changes in the ratio analysis would trigger
further investigation in the audit for the company.
4. Identify four inherent risks that you identify from business risk and analytical procedures in points 2
and 3. (Note: Business risks are not the same as inherent risks).
5. Identify a key account and a key related auditor assertion at risk of material misstatement based on
the inherent risk you identify in point 4. (Note: Identify One key account and One key assertion for
each of the four inherent risks identified in point 4).
6. Calculate planning materially in a dollar ($) amount. You must include a breakdown of your
calculation and a justification of your choice of base, the percentage used and your assessment of
detection risk. Assume the company’s control risk is high.
7. Determine a number of methods the company can implement to overcome the high control risk.
Assume the company’s control risk is high.
8. Explain why would the company obtain sustainability assurance services from a consulting firm and
obtain company audit report from a chartered accounting firm?
9. Recently, the Covid-19 pandemic has been shown to impact audit quality such as (1) audit fees, (2)
going concern assessment, (3) auditor human capital, (4) audit procedures, and (5) audit personnel
salaries. Select any of two of these five factors and explain how does Covid-19 impact these two audit
quality factors?
Note*
The basic requirement is to make a general analysis of the profitability, efficiency, liquidity, gearing
(leverage), and investment performance of one of the above companies using the information available
in the company’s annual reports available via Moodle.

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Dr Hassan Elhawary
BUACC5935: AUDITING AND ASSURANCE SERVICES
Task 2: Group Assignment
Students are to use the ‘Consolidated’ data in conducting their analysis. Note that the annual reports
contain comparative data for the previous year’s results. The assignment will contain two main
elements:
SCHEDULE(S) OF RELEVANT RATIOS AND OTHER USEFUL CALCULATIONS
The schedule(s) of relevant ratios and other useful calculations should be incorporated in one or more
appendices. Ratios and other calculations should be presented so as to facilitate comparison between two
financial year (2019/2020 to 2020/2021) data. Students are advised to show the calculations used in
determining particular ratios and other figures.
A WRITTEN REPORT
The written report should:
• Explain briefly what is revealed by the ratios and other calculations in the context of the company’s
profitability, efficiency, liquidity, gearing (leverage) and investment performance. In particular, any
important changes from 2020 to 2021 should be identified, discussed and, where possible, explained.
• Provide an overall assessment of the company from the perspective of existing and potential equity
investors (shareholders).
The assignment is to comply with the University’s General Guide to Writing and Study Skills and
General Guide to Referencing and the written report is not to exceed 3,500 words (excluding the
Executive Summary and calculations which are to be incorporated in an appendix). Students are required
to use the ‘APA system’ for the acknowledgment of sources. In order to help ensure that assignments
meet required presentation standards, students are strongly advised to use the ‘Presentation check-list’
attached to these notes.
Students may, if they wish, seek, and use additional information about the company from sources other
than the annual report (for example, from newspapers, business magazines etc.). However, it is not
envisaged that students will be engaged in extensive research of this nature, and it is expected that the
annual report provided will be the primary resource relied upon in completing the assignment. Students
are expected to obtain relevant share price data for the company so that investment ratios (such as a
dividend yield ratio) can be calculated. (It is recommended that students obtain the company’s share
price as of 30 June 2020 and 30 June 2021 for the purpose of calculating relevant ratios on these dates.
Share price data is available among other sources, from on the ASX website. Under no circumstances
are students to make direct personal contact with the company or its officers (for example by telephone,
fax, letter or email) in an attempt to gather further information.
SUGGESTED REPORT FORMAT AND APPROACH
SECTIONS IN REPORT:
Complete assignment in appropriate report format. Suggested report structure and headings:
TITLE PAGE
Your title or cover page needs to convey the main information about your assignment. It must look
professional and include:
The Course Code and Name:

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Dr Hassan Elhawary
BUACC5935: AUDITING AND ASSURANCE SERVICES
Task 2: Group Assignment
The title of the assessment task:
Name of the Course-Coordinator and of your tutor
Trimester, year and date of submission
TABLE OF CONTENTS
The Table of Contents (TOC) provides the outline of your report to the marker/reader. It is the first
indication that you have addressed key issues and carefully planned you work. Your TOC should look
well laid out as if it is the TOC in a book. Use numbering for major e.g., 1.0 and minor headings e.g., 1.1
where appropriate and include page numbers. You can use an extra page to detail illustrations or tables if
it is appropriate.

EXECUTIVE SUMMARY
The Executive Summary should give an overview of your report to a busy executive who does not have
time to read it in full. It should:
▪ convey the purpose of the report,
▪ give a summary of key themes, ideas or findings (sub‐headings may be used),
▪ provide abridged recommendations.
The Executive Summary should not exceed 150 words. The words in the Executive Summary are not
included as part of the final word count.
BACKGROUND: COMPANY OVERVIEW
The introduction should give an overview of your report to a busy auditor partner, John Park who does
not have time to read it in full. It should contain the purpose of the report.
ANALYSIS
The main body of the report should include a discussion of what is revealed by the ratios and other
calculations in the context of the company’s profitability, efficiency, liquidity, gearing (leverage) and
investment performance. In particular, any important changes from 2020 to 2021 should be identified,
discussed and, where possible, explained. The main areas of analysis are:
• Profitability
• Efficiency
• Liquidity
• Gearing (Leverage)
• Investment Ratios
Audit planning memorandum
• Sub-Heading 1: Business overview
• Sub-Heading 2: Business risks
• Sub-Heading 3: Results of analytical procedures
• Sub-Heading 4: Inherent risks
• Sub-Heading 5: Key accounts and key related assertions
• Sub-Heading 6: Planning materially

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Dr Hassan Elhawary
BUACC5935: AUDITING AND ASSURANCE SERVICES
Task 2: Group Assignment
• Sub-Heading 7: Recommendations for weak internal control
• Sub-Heading 8: Sustainability assurance services from a consulting firm vs. audit report from a
chartered accounting firm
• Sub-Heading 9: The impact of COVID-19 on audit quality
CONCLUSIONS AND FINDINGS
The Conclusion is your evaluation or summary of the major points and key findings as discussed in the
Body of the report. The Conclusion should always be concise and must not contain any new information.
It should not require a substantial number of words to draw information together and summarise what you
have found.
RECOMMENDATIONS
Your recommendations are the culmination of all your work and should deliver a well‐rounded and
thoughtful ending to your research. The material in the body of your report provides the basis for your
considerations. The conclusion provides a summary of your deliberation over your findings. The
recommendations provide the reader with your considered opinions of what would be the best decision(s)
to make, or course(s) of action to follow, based on your research and critical analysis.
For this assignment your recommendations should be directed towards both the internal
management/directors of the company and also existing and potential external equity investors.
APPENDIXES
The appendix must contain a one-page summary in table format of the results of your ratio calculations.
This summary of your ratio results should be followed by the actual ratio calculations and workings.
Footnotes should also be used in your appendix to justify any values you have used in your calculations
where there is some uncertainty if you have selected the correct figure (value) from the annual report to
be used in the formulas.
REFERENCES
This must contain full details all sources referred to or cited in the report, using the Federation University
author‐date (APA) style.

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Dr Hassan Elhawary
BUACC5935: AUDITING AND ASSURANCE SERVICES
Task 2: Group Assignment
ANALYSIS APPROACH
In particular, any important changes from 202 to 2021 should be identified, discussed and, where
possible, explained. This may include amongst other aspects discussion and analysis of:
• Key results/trends from the ratio calculations
• Implications of your findings on the various
• Possible reasons and explanations behind the company’s fianacial performance and results
• Strategic implications for the company
• Strategies to improve the companies financial performance and results and also improve
investor (shareholder/member) confidence
PRESENTATION AND REFERENCING
PRESENTATION
The ‘Presentation check-list’ (see attached appendix) indicates the requirements and expected standards
concerning presentation. An assignment that complies with the guidelines highlighted in this check-list
would normally be expected to achieve the required presentation standard (see assessment criteria below).
If further guidance is required, students should refer to the General Guide to Writing and Study Skills
and General Guide to Referencing
REFERENCING
The link to the library website for more information is: Fed Uni Library Referencing
If additional clarification is necessary, students should discuss the matter with the staff member
responsible for conducting their tutorial.
ASSESSMENT CRITERIA
In assessing submitted assignments consideration will be given to:
• Overall neatness, completeness and quality of presentation.
The students are expected to achieve a satisfactory standard with respect to this criterion as a matter of
course and for this reason no credit will be granted for achieving it. However, assignments that fail to
achieve the minimum standard in connection with this criterion will be penalised. The expected
standard concerning this criterion is contained in the attached ‘Presentation check-list’.
• Timeliness of submission.
The students are expected to be able to meet reasonable deadlines for the submission of assessable
work as a matter of course. For this reason, no credit will be given for submitting the assignment by
the due date. Assessment tasks submitted after the due date, without prior approval/arrangement, will
be penalised at 10% of the available marks per day or part of say. Requests for extension of time
must be made with the lecturer concerned and based on Special Consideration guidelines
https://federation.edu.au/current-students/essential-info/administration/special-consideration
• Demonstrated skill in identifying and calculating relevant ratios and other indicators of
profitability, efficiency, liquidity, gearing (leverage), and investment performance.

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Dr Hassan Elhawary
BUACC5935: AUDITING AND ASSURANCE SERVICES
Task 2: Group Assignment
This criterion relates specifically to the requirement to prepare a schedule (or schedules) of relevant
ratios and other calculations and carries a weighting of 12 marks out of the 30 available for the
assignment.
• Demonstrated understanding of financial reports and ratios and other indicators of profitability,
efficiency, liquidity, gearing (leverage), and investment performance. Written reports in excess of
3,500 words will be penalised.
A single copy (only) of the assignment should be submitted, for which the students who prepared it will
usually receive the same mark. This is based on the expectation that each student will have contributed
equally to the preparation of the assignment. Where this expectation has not been satisfied separate
marks may be allocated.
Selected students may be invited to discuss their assignment with the person responsible for marking it.
This discussion will only be taken into account in marking assignments where it provides evidence that
the integrity of students’ work has been compromised. This may, for example, be evidenced by students
being unable to explain the meaning of their assignment, being unable to explain why certain information
has been included and so on.
PLAGIARISM
Plagiarism is the presentation of the expressed thought or work of another person as though it is one’s
own without properly acknowledging that person.
Students must not allow other students to copy their work and must take care to safeguard against this
happening. In cases of copying, normally all students involved will be penalised equally; an exception
will be if the student can demonstrate the work is their own and they took reasonable care to safeguard
against copying.
Plagiarism is a serious offence. Please refer to the following documents:
• Statute 6.1: Student Discipline
• Regulation 6.1: Student Discipline
• Regulation 6.1.1: Plagiarism
APPENDIX: PRESENTATION CHECK-LIST
As indicated above, the assignment for BUACC5935 is to be presented in accordance with the
University’s General Guide to Writing and Study Skills and General Guide to Referencing. To assist
students in achieving the required standard the following check-list is provided.
It is highly recommended that students read through the following items before they commence work on
the assignment so that they have a general understanding of what is expected concerning presentation.
An assignment that complies with the guidelines highlighted in this check-list would normally be
expected to achieve the required presentation standard (see the assessment criteria above).

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Dr Hassan Elhawary
BUACC5935: AUDITING AND ASSURANCE SERVICES
Task 2: Group Assignment
Prior to submitting their assignments students should read carefully through the following statements
and tick the ‘Completed’ box for each item only when they are satisfied that their assignment meets the
specified presentation standard.
Section references are to the University’s General Guide for the Presentation of Academic Work
(revised edition, 2014). All students should ensure that they have a copy of this document before
commencing work on the assignment.

Completed

1. We have read the General Guide to Writing and Study Skills and General Guide to
Referencing and understand why the proper presentation of academic work is
important.

2. We have read and understood the section dealing with plagiarism.

3. We have read the section concerning ‘Layout an appearance’ and complied with its
guidelines. Please note that ‘1.5’ or ‘double’ spacing is required for the written
sections of this assignment.

4. Our assignment has a title page that contains the information specified in the ‘Title
page or cover sheet’ section (and includes the BUACC5935 tutorial group of each
student).

5. Our assignment has an abstract (or synopsis or summary) prepared in accordance
with the instructions contained in the ‘Reports’ section.

Note: As per p.36, the abstract follows immediately after the title page and ‘should
summarise or précis the content of the work’. Note that the abstract or synopsis
should not simply be a restatement of the topic, nor a table of contents in prose form.
6. If our assignment contains a table of contents, it has been prepared in accordance
with the General Guide to Writing and Study Skills.

7. If our assignment contains appendices, they have been prepared in accordance with
the General Guide to Writing and Study Skills.

9. We have read the General Guide to Referencing and understand the importance of
properly acknowledging the use of other writers’ works. For this assignment the
APA system is required to be used.

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Dr Hassan Elhawary
BUACC5935: AUDITING AND ASSURANCE SERVICES
Task 2: Group Assignment
10. We have read the General Guide to Referencing which deals with the APA citation
style and used the APA system in our assignment.

Note: In an assignment of this nature the need to acknowledge sources by ‘author-
date’ references may be limited. This is on account of the technical knowledge and

skills required to complete the assignment being taught as part of the course content.
However, where students quote or use ideas from a particular source (for example, a
newspaper article or a textbook) this should be acknowledged. Some judgement is
needed in this matter. For example, if a current ratio is calculated there is no need to
acknowledge the source of the formula used since the current ratio forms part of
general accounting knowledge. However, if a particular author is quoted, or a
particular author’s ideas concerning, for example, an appropriate current ratio, are
used, then an acknowledgment using an ‘author-date’ reference (see examples in the
General Guide to Referencing) will be required. The proper acknowledgment of
sources is very important in academic work, and it is worth investing some time in
learning to do it correctly, as the benefit will be enduring.
11. Our assignment contains a reference list prepared in accordance with the General
Guide to Referencing.

12. We have carefully proofread our assignment prior to submitting it. (Simply running
the assignment through a spell-checker, while helpful, is not a substitute for a careful
proofreading). When proofreading our assignment, we endeavoured to identify and
correct all spelling, punctuation, grammatical and other similar errors.

13. We understand that the staff member(s) responsible for taking our tutorials is(are)
available to answer questions relating to the presentation of our assignment. If we
were uncertain of how to achieve the proper presentation standard, we asked a staff
member for advice.

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Dr Hassan Elhawary
BUACC5935: AUDITING AND ASSURANCE SERVICES
Task 2: Group Assignment
HINTS:
BUACC5935 Group Assignment Self Learning Guideline
Read Chapter 7 of the prescribed textbook, and:
1. Understand the steps in auditing planning overview and be able to explain why obtaining an
understanding of the entity and its environment is so important.
2. Understand the process of analytical procedures and be able to calculate key financial ratios used in
analytical procedures
3. Be able to interpret the key changes of financial ratios
4. Refer to Appendix 7A (pp.276- 277) of the prescribed textbook for key financial ratios. (Hint:
Students may also calculate other financial ratios such as Gross profit margin; Net profit margin; Debt
ratio; Market performance Ratios including Earnings per share (EPS), Dividend per share (DPS),
Price earnings ratio.
Read Chapter 8 of the prescribed textbook, and:
1. Understand the risks of misstatement through understanding the entity
2. Understand the importance of business risks in audit planning
3. Understand the importance of inherent risks in audit planning and be able to use audit assertion to
respond to client firm’s inherent risks.
4. Understand the importance of internal control to an entity.
Read Chapter 9 of the prescribed textbook, and:
1. Understand the concept of materiality
2. Be able to determine the materiality for the financial report as a whole (see prescribed textbook Table
9.1 (pp.327) for a common base and materiality level for materiality planning)).
The information for the impact Covid-19 on audit quality might not be available in annual report or the
prescribed textbook, but online search (i.e., academic journals or media reports) will show if there is the
impact. Please cite the reference

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Dr Hassan Elhawary
BUACC5935: AUDITING AND ASSURANCE SERVICES
Task 2: Group Assignment

BUACC5935

AUDITING AND ASSURANCE SERVICES

T2, 2022/2017

Task 2: Group Assignment
(Total Marks – 30)
(Marking Rubric)
BUACC5935: AUDITING AND ASSURANCE SERVICES
Task 2: Group Assignment (Total Marks – 30)
Group Names & IDs:
Student ID & Name:
Marking Criteria Marks
Allocated
Marks
Awarded

Marker’s Comments

Executive
summary 4
Discussion &
Analysis:
1.0 Introduction

& Background-
Business overview

5
2.0 Business risks
8

3.0 Results of
analytical
procedures

8
4.0 Inherent risks
8
5.0 Key accounts
and key related
assertions

8

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Dr Hassan Elhawary
BUACC5935: AUDITING AND ASSURANCE SERVICES
Task 2: Group Assignment
6.0 Planning
materially 7
7.0
Recommendations
for weak internal
control

5
8.0 Sustainability
assurance services
from a consulting
firm vs. audit
report from a
chartered
accounting firm
6

9.0 The impact of
COVID-19 on
audit quality

5

Selection &
calculatiuon of
appropriate raios:
8
Interpretation of
ratios: 8
Evaluation

5

Conclusion

5

Overall
Recommendations 5
Citations and
reference list in
correct APA style.
Writing style,
mechanics,
structure &
referencing.
Spelling and
grammar: Well

5

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Dr Hassan Elhawary
BUACC5935: AUDITING AND ASSURANCE SERVICES
Task 2: Group Assignment
structured, with
few or no errors in
spelling and
grammar

Penalty will apply
for late submission:
10% of the marks
for this task for
each delay in
submission of a
day (weekend
included)
Total for
Presentation (out
of 100)

100 0

Total for Presentation (Scaled
down to 30%)
0

Keep up with good work