HI6026 Audit, assurance and compliance

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.)
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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)
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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 Criteria	Weighting
Executive Summary	3%
Main Body of the Report	10%
Conclusion	3%
Punctuation, Spelling, Grammar, Word Choice, Academic English Expression	2%
Report presentation, formatting and effective use of any additional materials	1%
Correct referencing, In-text citation, acknowledgement of sources, consistency	1%
Weight	20%
Video Presentation Marking Criteria	Weighting
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%
Weight	10%
Total Weight	30%

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HI6026 AUDIT, ASSURANCE AND COMPLIANCE
Marking Rubric

Excellent	Very Good	Good	Satisfactory	Unsatisfactory
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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