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HI6026 Audit, assurance and compliance

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HI6026 AUDIT, ASSURANCE AND COMPLIANCE
Assignment Specifications
Purpose
This assignment aims to enhance students’ critical thinking skills and higher order application abilities
by researching and analysing a legal case involving the litigation of an auditor/audit firm. Students
will need to propose and document mitigating measures to address the risk of litigation and make
appropriate recommendations to the audit approach, in terms of the audit strategy adopted, the
audit procedures required in the audit program and other appropriate ways for the auditor to
mitigate against both professional reputational damage and financial losses.
The assignment structure must be as follows:
1. Holmes Institute Assignment Cover Sheet – Full Name, Student No., Campus, Session No.
2. Executive Summary
• The Executive summary should be concise and not involve too much detail.
• It should make commentary on the main points only and follow the sequence of the report.
• Write the Executive Summary after the report is completed, and once you have an overview
of the whole text.
• The Executive Summary appears on the first page of the report.
3. Contents Page – This needs to show a logical listing of all the sub-headings of the report’s
contents. Note this is excluded from the total word count.
4. Introduction – A short paragraph which includes background, scope and the main points raised
in order of importance. There should be a brief conclusion statement at the end of the
Introduction.
5. Main Body Paragraphs with numbered sub-headings – Detailed information which elaborates on
the main points raised in the Introduction. Each paragraph should begin with a clear topic
sentence, then supporting sentences with facts and evidence obtained from research and finish
with a concluding sentence at the end.
6. Conclusion – A logical and coherent evaluation based on a thorough and an objective assessment
of the research performed.
7. Appendices – Include any additional explanatory information which is supplementary and/ or
graphical to help communicate the main ideas made in the report. Refer to the appendices in the
main body paragraphs, as and where appropriate. (Note this is excluded from the total word count.)
Page 3 of 6
HI6026 AUDIT, ASSURANCE AND COMPLIANCE
Assignment Topic – Auditors and Legal Liability
Read the following extract from the ACCA (the Association of Chartered Certified Accountants)
website, which is the global body for professional accountants, as stated:
“Over the past two decades the bill for litigation settlements of Big Four audit firms alone has run
into billions of dollars. Examples include Deloitte’s 2005 settlement of $250m regarding its audit of
insurance company Fortress Re and PwC’s $229m settlement in the lawsuit brought by the
shareholders of audit client Tyco in 2007.”
“Auditor liability is increasingly concerning, both in terms of audit quality and the reputation of the
profession but also in terms of the cost to the industry and the barriers this creates to competition
within the audit market.” (Source: www.accaglobal.com)
Required
Given the importance of professional liability to auditors and the negative publicity this creates for
the profession as a whole, research a recent case (Post 2000) where an auditor/audit firm was sued
for professional negligence. Students may research cases from the UK, USA, NZ or Canada in addition
to Australian cases.
With reference to the facts of the selected case, the significant Auditing and Accounting issues and
the final judgement handed down in your selected case:
 Provide a brief description of the key events and the factual issues behind the case
 Explain the culpability or which parties were deemed responsible and why. Outline the
damages imposed or the penalties and consider whether they were appropriate.
 investigate and explain the relevant issues in Auditing and Accounting raised by the case,
 The root-cause of the issues such as; market pressure, organisational culture, fraud etc.
 any problems, mistakes or misrepresentations made by the defendants, which contributed to
the adverse judgement and the awarding of damages,
 Finally, provide recommendations and possible improvements to:
o the Audit Strategy,
o the Audit Program,
o Other effective measures;
which would prevent the recurrence of the same litigation in the future and maintain
the professional reputation of auditors.
Resources and Reference Links:
1. https://asic.gov.au
2. www.accaglobal.com
3. “Are Auditors fit for purpose?”- https://www.bbc.co.uk/programmes/m0002mg6
4. Textbook: Gay & Simnett, Auditing & Assurance Services in Australia, 6th Edn, McGraw Hill
Education, 2017
5. Students may explore the following high profile cases:
o Deloitte’s 2005 settlement of $250m regarding its audit of insurance company
Fortress Re.
o PwC’s $229m settlement in the lawsuit brought by the shareholders of audit client
Tyco in 2007
o Royal Bank of Scotland (RBS) vs Bannerman Johnstone MacLay (Bannerman) (2002)
Page 4 of 6
HI6026 AUDIT, ASSURANCE AND COMPLIANCE
Group Formation and Group Assignment
Students are required to work on the assignment in groups of 4 – 6, produce a group report and a
short video presentation of approximately 10mins. Group membership will need to be
communicated to the local campus lecturer in writing to the session lecturer by week 6.
Both assessment items must be submitted on Blackboard. The written assignment must be in a report
format and submitted through safe-assign prior to final submission. The originality percentage
should be as low as possible. The written submission must be double-checked, edited and rephrased
if the originality percentage and plagiarism risk is noted as high, as per safe-assign.
Video Presentation
Students must use power-points slides with clear dot-points, noting the key information. The video
presentation should be considered a professional business presentation, which would be viewed by
colleagues in the Auditing profession. All students in the group must participate in the video or marks
will be deducted. Video presentations should not exceed the 10mins time limit or marks will be
deducted. Impressive video presentations may be played in class provided that consent is given.
Marking Criteria

Group Assignment Marking CriteriaWeighting
Executive Summary3%
Main Body of the Report10%
Conclusion3%
Punctuation, Spelling, Grammar, Word Choice, Academic English Expression2%
Report presentation, formatting and effective use of any additional materials1%
Correct referencing, In-text citation, acknowledgement of sources, consistency1%
Weight20%
Video Presentation Marking CriteriaWeighting
Effective verbal communication of the key content in a professional manner.4%
Effective use of power-point slides with clearly legible text in concise
statements and effective coverage of the content in a professionally produced
presentation, which is engaging and logically structured.
4%
Total length of the video presentation is within the 10mins limit and effective
participation of all group members is noted.
2%
Weight10%
Total Weight30%

Page 5 of 6
HI6026 AUDIT, ASSURANCE AND COMPLIANCE
Marking Rubric

ExcellentVery GoodGoodSatisfactoryUnsatisfactory
Executive
Summary
(3 marks)
Very effectively
written synopsis
with clear
communication of
the main points in
a concise
paragraph.
(3 marks)
Competently
composed a
strong synopsis.
The main points
are
communicated
well.
(2.5 marks)
Synopsis is well
written with all
the expected
points raised.
(2 marks)
Synopsis is
clearly
written, but it
is brief or has
some errors.
(1.5 mark)
Synopsis is
deficient and
poorly written.
Too brief.
(0 – 1 mark)
Main Body
Including
Introduction
(10 marks)
Excellent. Well
organised. Main
points are logically
ordered; sharp
sense of
structuring and
arrangement of key
information.
Supporting details
are specific to the
main points and
adequate facts and
other evidence is
provided and well
articulated.
(8.5 – 10 marks)
There are valid
points raised with
a good argument
/ thesis
statement,
paragraphing is
noted, and the
points in the
introduction are
explained in more
detail with
supporting
evidence.
(7.5 – 8.5 marks)
There are valid
points raised,
paragraphing is
noted, and the
points in the
introduction are
explained in
more detail
with supporting
evidence.
(6.5 – 7.5
marks)
Some
organization;
main points
are there but
they are
disjointed;
Minor
structuring
issues.
(6.5 – 5 marks)
Poorly organized;
no logical
progression;
beginning and
ending are vague.
No structure.
Lacks substance.
No research
noted.
(0 – 4.5 marks)
Conclusion
(3 marks)
Very well
composed
conclusion with a
clear and logical
evaluation with
conclusive and
persuasive
statements based
on an intelligent
assessment of the
evidence acquired.
(3 marks)
Conclusion is well
written as a
concise summary
which logically
evaluates the
main argument
with evidence
used and
examples.
(2.5 marks)
Conclusion is
logical and an
evaluation is
made, but there
is some lack of
evidence or
depth of
analysis, which
would have
improved the
overall
persuasiveness
of the report.
(2 marks)
Conclusion is
noted and an
evaluation is
presented,
but it is
lacking in
sufficient
detail or
supporting
evidence.
Requires more
analysis and
some proof
reading.
(1.5 mark)
Conclusion is
poorly written
with no
evaluation and no
logical coherence.
No evidence of
analysis. Poor
effort.
(0 -1 mark)
Spelling and
Grammar
(2 marks)
No errors. Well
proofread. Clearly
edited and refined
prior to
submission.
(2 marks)
Edited and
refined prior to
submission with
one or two
errors.
(1.75 marks)
Only minor
errors. Needs
some editing.
(1.5 marks)
Numerous
minor errors.
Not proofread
or edited
effectively.
(1 mark)
Numerous major
and minor errors
which distract
from
understanding and
clarity. Not
proofread. Not
edited. Academic
English level is
low. (0 -1 mark)

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HI6026 AUDIT, ASSURANCE AND COMPLIANCE

Report
Format and
Presentation
(1 mark)
Very well
formatted with
sub-headings, page
numbers,
appendices, and
effective use of
tables/graphics
(1 mark)
Formatting is well
set out and clear,
but there are
minor issues in
subheadings,
page numbers,
appendices
and/or graphics.
(0.85 mark)
Formatting is
above standard
and meets all
the basic
requirements
with a contents
page, sub
headings and
page
numbering.
(0.75 mark)
Formatting is
coherent and
clearly
structured,
but page
numbers are
missing or
subheadings
or contents
page is brief
(0.5 mark)
No formatting or
lack of structuring.
(0 mark)
Referencing
and Citation
(1 mark)
References are
consistently
correct using
Harvard style or
APA style. No
missing citations.
A strong
reference list
with relevant and
credible sources
used. Evidence of
extensive
research.
(1 mark)
References are
consistently
correct using
Harvard style or
APA style. No
missing
citations.
References used
are good, but
not extensive.
(0.85 mark)
Generally
correct
referencing
using Harvard
style or APA
style. More
references
required.
(0.75 mark)
Some
References
are used, but
not used
consistently.
Not enough
research
done.
(0.5 mark)
References are
missing or do
not comply with
correct
referencing
style.
(0 mark)

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