Detail Assignment Tasks: Developing an Audit Program for a selected
listed Company
1. Gain an understanding of the nature of the entity and its industry and then identify
key business risks. After this is completed, assess where the risks of material misstatements could be in the financial report. Consider the factors affecting both
Inherent Risk and Control Risk. Finally, apply the Audit Risk Model [AR = f (IR,
CR, DR)] to the selected company. Which risk rating would you apply (Low, Medium
or High) to the company’s inherent risk assessment and control risk assessment?
How does this affect your assessment of Detection Risk and Audit Risk?
2. Perform analytical procedures of the Statement of Financial Position and of Financial
Performance over the last three years using appropriate ratios and/or metrics. Select
four key ratios and provide a brief explanation in the report. This should be
presented in a table format.
3. Discuss with your group members which account balances are considered “material”.
Explain how you calculated materiality for planning purposes and provide appropriate
justification for your decision-making.
(Note – Use a table format to structure your answers to questions 5, 6, 7 & 8)
4. Select up to ten different material account balances, at least five assets and five liabilities.
5. For each material account balance selected, list the relevant financial report assertions
and
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HA3032 AUDITING
explain why the selected assertions are applicable to each account.
6. Design a comprehensive set of audit work steps for each material account balance,
which addresses the selected assertions and which will result in sufficient and
appropriate audit evidence being collected for your selected client company.
(Assume that a predominantly substantive approach is being adopted)
7. Include a sampling plan, which details how you will use sampling for each material
account balance to be tested. How many items will be tested for each test?
8. Refer to some or all of the following websites for further information and
research processes: http://www.auasb.gov.au/Home,
http://www.asic.gov.au/, www.cpaaustralia.com.au, http://www.ifrs.org

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