7036EFA Auditing and Assurance Assignment Brief | Coventry University

Assignment Task

• This is an individual piece of coursework which contributes 100% to the overall module mark.
• The assignment is designed to enable you to demonstrate your understanding of the Auditing and Assurance materials and how analytical you have been in analysing the following case study. The submission should demonstrate that you have immersed yourself in the course material, that you have carried out wider reading and that you have done some thinking on your own. You will be expected to use relevant academic literature and advance textbooks for the module as sources, to state relevant accounting and/or auditing standards and to carry out wider reading.
• Word limit: 3000 words (+/- 10%) [minimum: 2,700 words; maximum: 3,300 words].
• There will be a penalty of a deduction of 10% of the mark (after internal moderation) for work exceeding the word limit by 10% or more.
• The word limit includes quotations but excludes the bibliography.
• Anonymous marking will be implemented for the assignment, and you are required to only use your Student ID Number on the submission.
• References: The referencing style is APA style (7th edition), you can find out more about it here: https://libguides.coventry.ac.uk/apa.
•  Style and format
  Font size: 12pt (preferably Arial/Times New Roman) Line spacing:    1.5 lines

Requirement

Case Study

You are an audit senior at the audit firm AAK & Co, a firm of registered auditors. Ray Ltd is an audit client of your firm and your firm is busy with the completion phase of the audit for the financial year ended 31st December 2024. Ray Ltd is a private company which specialises in the service and repair of both commercial and private properties here in the UK.

Materiality for the audit of Ray Ltd’s financial statements has been set at £450,000.

In addition to the audit of Ray Ltd, you have also been asked by your audit engagement partner, Matthew Hill, to assist him in evaluating possible ethical and professional issues arising from a review of the audit working papers of another company of unrelated case; i.e. BMB Ltd.

You are provided with the following EXHIBITS, which are relevant to the questions:

1.    EXHIBIT 1: Completion matters – details regarding issues you have discovered during your review of the audit working papers of Ray Ltd.
2.    EXHIBIT 2: Draft auditor’s report and supplementary information of Ray Ltd.
3.    EXHIBIT 3: Review notes—issues identified from a review of the audit working papers of BMB Ltd prepared by Matthew.

Case Study Required:

1. Using the information contained in EXHIBIT 1:

a) Discuss the implications of the fraud for the completion of the audit, and the actions to be taken by the auditor.

b) In respect of the development costs ONLY:

(i)  Comment on the sufficiency and appropriateness of the audit evidence obtained, and
(ii) Recommend the actions to be taken by the auditor, including the further evidence which should be obtained.

2. Using the information contained in EXHIBIT 2, critically appraise the extract from the proposed auditor’s report of Ray Ltd for the year ended 31st December 2024. Provide at least 4 critiques of the draft auditor's report. (4 critiques x 7.5 marks)

(Note: You are NOT required to re-draft the extracts from the auditor’s report).

3. In EXHIBIT 3, you have been provided with issues identified from a review of the audit of BMB Ltd by Matthew. In respect to this, in your notes you should identify and discuss the nature of the ethical and professional issue(s)/threat(s) arising from a review of the audit working papers of BMB Ltd, and for threat(s) identified, recommend any actions which should now be taken by AAK & Co to reduce the threat(s) to an acceptable level.

Marks will be awarded for the demonstration of:

• professional presentation (format/layout), logical flow of the discussion and critical analysis and evaluation in your answer; and
• reference to relevant standards (International Accounting Standards (IAS) and/or International Standards on Auditing (ISA))

Assessed Module Learning Outcomes

The Learning Outcomes for this module align to the marking criteria which can be found at the end of this brief. Ensure you understand the marking criteria to ensure successful achievement of the assessment task. The following module learning outcomes are assessed in this task:

1. Critically evaluate the nature, purpose, scope and governance of auditing and internal control processes within business organisations as part of the audit conceptual framework.
2. Explain and evaluate accounting and internal control risks and systems.
3. Appraise and critically review audit risk, audit procedures and audit evidence.
4. Explain and evaluate audit procedures within audit assignments.
5.  Explain and appraise the nature of the audit report and its limitations.
6. Explain and be aware of the extending audit horizons.