ACFI3005 Auditing and Assurance Assessment 2 – Group Assignment Report 2025

ACFI3005 Overview

Weighting: Worth 30% of final mark: 10% for in-class discussions, 15% for the final report, and 5% for the presentation.

• Length: 1,000 words maximum for each in-class discussion, 3,000 words +/-10% for the final report.
• Due and Submission: In-class discussions will be submitted via Canvas at the end of weeks 3, 5, 8, and 9. Both the presentation and report will be submitted via Canvas in Week 11.
• Please refer to the marking criteria at the end of this document to guide your work.

Preparation

• Forming group: By Sunday of Week 2, form a group of 3-4 students, select your group leader, and register your group on Canvas. Discuss your group’s choice of a company.
• In-class discussions: This is a progressing group work, requiring you to work in groups from the early stage of the course. As such, in weeks 3, 5, 8 and 9, you prepare tasks as prescribed in the case, discuss your work in groups during the class time, and submit your work as a group at the end of the week. Each task will weight 2.5% towards the total mark of the assignment. If you do not participate in these discussions during the class time, you will receive zero for the task.
• Registering your choice of a company: By Sunday of Week 4, register your group’s choice of a company on Discussion/Canvas. No two groups will work on the same company, and groups will be permitted their choice of a company on a first come, first served basis.
• Submitting the written report and oral presentation: By Thursday of Week 11, 11.59 pm AEST, the group leader submits the written report and oral presentation that each group will have recorded. One submission for each group.
• The marking rubrics for the written and oral works are given in this document.
• Peer Assessment must be completed by Sunday of Week 11. NO PEER ASSESSMENT, NO MARK.

ACFI3005 Description Of The Assignment

Auditors generally work in groups to audit the financial reports of their clients. For this assignment, your group (as an audit team) will choose a company (your client) and conduct a preliminary risk assessment based on previous period financial reports and other relevant information.

Requirements:

Select a company listed on the Australian Stock Market or a large proprietary company. Please do not choose too big or complex a company, e.g. Woolworths, Coles, JB-HiFi, etc.

Find the latest available review report and two annual (full year) reports for your selected company. The review report will provide half year results. Each annual report will include an auditor’s report, financial statements (Statements of Financial Position, Profit or Loss, Cash Flows), and explanatory notes. Address these tasks:

Task 1:

Compare and contrast the two most recent auditor’s reports (i.e. the latest annual report and review report) by:

• Identifying the types of opinion given and level of assurance provided.
• Identifying and justifying three key audit matters (KAMs) or any other issues and concerns that your audit team will have to consider in the coming year-end audit.

Task 2:

Provide an understanding of the client at the economy, industry, and entity levels by discussing at least two indicators for each category (e.g. entity level: major customers, importer/exporter, capital structure). From the understanding, identify six potential risks of material misstatement.

(You can use any items that are discussed in Topic 3 material, e.g. interest rates, industry competition, products, changes in major customers/suppliers, questions listed in the case study – Crest Outfitters in Chapter 3).

From the review report, project the half year result to full year result (by doubling the half year result). From the two annual reports, collect historical financial data for the latest available three years. Using the projected result and three-year historical data, address the tasks below

Task 3:

Planning Materiality: your audit firm dictates that one planning materiality amount (and percentage if necessary) is to be used for the financial statement as a whole. The planning materiality bases are as follows:

Based on the information collected and your risk assessment in Task 2:

select the base for planning materiality that you believe is most appropriate and provide three reasons justifying the base you have chosen.
calculate and suggest the planning materiality (amount and percentage) that you would use for the client.

Conduct analytical procedures, involving:

• Comparison and trend analyses of the Statements of Profit or Loss and Financial Position.
• Common-size analysis of the Statement of Profit or Loss.
• Ratio analysis (using one ratio for each of the three ratio categories: i.e., one ratio for profitability; one ratio for liquidity, and one ratio for solvency).

Task 4:

Discuss the results from Task 3 by highlighting six significant unusual or unexpected results (unusual variances or no variance) and identifying areas with high risk of potential misstatements. For each risk listed, identify key accounts and assertions that require attention in the new audit.(You can refer to the case study Crest Outfitters in Chapter 4, textbook pages 106-107 and other resources for further understanding.)
Considering all the work done starting from Task 1, conclude the overall level of risk and materiality of the firm and recommend the areas of audit focus for the coming year-end audit.

Companies and their annual reports can be searched by using:

• Company websites (usually under “investor relations”)
• Yahoo finance http://au.finance.yahoo.com/ (company profile, downloadable share price data)
• Australian Securities Exchange www.asx.com.au (Company profile, ASX announcements)
• Reserve Bank of Australia www.rba.gov.au (Government bonds and interest rates)
• AFR market tools http://afr.com/markettools/ (share market data including dividend information)
• IBIS World www.ibisworld.com.au (industry, market and company research)
• Other data bases available at UON library (DatAnalysis).
• A. In-Class Discussions (2.5% Each, 10% In Total)
• In-class discussion Week 3: Address Task 1
• In-class discussion Week 5: Address Task 2
• In-class discussion Week 8: Address Task 3
• In-class discussion Week 9: Address Task 4.1
• Each task should have a maximum length of 1,000 words

B. Written Report Format (15 Marks)

Use feedback and comments provided to in-class discussions to work on the quality of the final report addressing all four tasks of the assignment.

• The written report should take the form of a formal report and be presented in ONE DOCUMENT.
  The word limit is 3000 words (+/- 10%).
• Must use your quantitative analysis (with detailed calculations) to support your argument.
• Excel calculations will need to be copied (can be as an image) into the Word document. Your detailed calculations (e.g. Excel) must be included in an appendix, otherwise significant marks will be deducted.
• Whenever necessary, the report must be properly referenced (APA6th is preferable, APA7th is also allowable).

Your report should be structured along the following lines:

Executive summary (should be one stand-alone page with no page number)

• Table of contents
• Introduction
• Preliminary risk assessment
• Conclusion and recommendation
• Appendices (calculations showing formulae used and the company’s financial data that has been used in the analysis)
• Bibliography

C. Oral Presentation (5 Marks)

The key objective of the oral presentation is to enable you to demonstrate your work to the Course Coordinator. Each participant can speak for a maximum of three minutes and explain their part of the report and the key findings that related to their part of the work. The entire oral presentation for each group should NOT exceed 15 minutes.

D. Peer Assessment

Sometimes problems related to teamwork arise from differing perceptions among team members as to the worth of different types and level of contributions. The same mark for all members is not always fair as each individual brings different skills and different commitments to the task.

To address these issues, this course will use the Peer Assessment that allows you to provide formative feedback on each team member’s performance and your Course Coordinator to moderate each individual’s mark in the group assignment.

NO PEER ASSESSEMENT, NO MARK.

Participation in Peer Assessment is MANDATORY and students who do not undertake the Peer Assessment will be given a mark of zero for this assessment item. The Peer Assessment must be completed by Sunday (inclusive) of Week 11, using the link provided on Canvas.

Learning Criteria

• To identify and assess the various risks associated with a business, understand their impact in planning an audit approach, and communicate the analysis using a report format and oral presentation.
• To recognise and appraise contemporary auditing issues, being able to provide critical thinking on these issues.
• To research practice and issues impacting auditing and assurance, and communicate knowledge in a written context.

ACFI3005 Essay And Report Format

Your essay and report should adopt the format illustrated in the “Gold Guide” available at
http://www.newcastle.edu.au/__data/assets/pdf_file/0005/149918/Gold-Guide-NBS-APA-Referencing-Resource.pdf

Word Limit

Word limits (as per the marking criteria) provide you with guidance. Try to control the word limit within -/+10%. When you go beyond this level, your work is either lacking depth or off topic, which is where marks are deducted.

Format

Number every page.
Font size: 11 or 12.
Attach a completed Newcastle Business School cover sheet with the Turnitin submission, otherwise your report presentation will be penalised.

Notes:

The assignment must be attempted and completed in group and submitted to Turnitin by the due date. No individual work will be accepted.
You must control the similarity rate of your work within the green zone (around 25%). Turnitin reports can be used as evidence by the lecturer in the event that plagiarism is suspected in an assignment. Suspected acts of plagiarism will be forwarded to the Student Academic Conduct Officer (SACO).

Any assignment submitted late will be penalised at a rate of 10% per day of the possible maximum mark for the assignment for each day or part day that the assessment is late. Any assignment submitted more than five days after the due date will be awarded zero marks.