Assurance and Internal Control in Practice ACC606
- Subject Code :
ACC606
Unit 6 Assurance Assignment Assignment Scenario
Youare workinginan accountancyfirmas ajuniorassistant intheassurance department dealing with smalland medium sized businesses. As part ofyour training, you have been asked to contribute towards the initial planning ofseveral upcoming assuranceengagements.
You will need to prepare the required documentation detailed below for your line manager based oneach engagement, citing relevant accounting and assurance practice throughout.
Task1
A client has just completed his first year oftrading as a private limited company in the sportswear industry.Hehasrequestedadviceonanumberofissues relating to assurance and internal controls. You are required to prepare a report.
Yourreportmust:
- Explain the concept of reasonable assurance in a business
- Explain the assurance
- Compare and contrast the responsibilities of the different stakeholders involved in an assurance engagement.
- Analyse the possible purposes and outcomes obtained from different assurance
- Analyse best practices, guidelines and benchmarks including international standards relating to assurance practices.
- Discuss the need for the main areas of a business that require effective control
- Describe the components of internal control in both manual and digital
- Explain how internal controls are evaluated and conclusions
Extensionactivities
ToachieveaMerit,yourreportmust:
- assess the need to plan assurance activities with professional scepticism and
- analyse how internal controls mitigate
To achieve aDistinction, your report must evaluate the impact ofthe risk ofmisstatement in assurance and audit environments.
Learningoutcomesandassessmentcriteria
LO1AC1.1,1.2,1.3,1.4,1.5,1M1,1D1
LO2AC2.1,2.2,2.3,2M1
Task2
In September, an apprentice joined your department.Your line manager has requested that you prepare a handbook to help the apprentice understand how to gather evidence when completing anassurance engagement.
Yourhandbookmust:
- Explain the difference stages required to gather evidence when completing an assurance
- Review different methods of obtaining evidence for assurance
- Discuss the role of different levels of management in the organisational hierarchy in relation to the assurance process.
Extensionactivities
ToachieveaMerit,your handbookmust analysehowinternalcontrols are evaluated and conclusions drawn.
To achieve aDistinction,your handbookmust compareandcontrastthereliability ofdifferenttypes of assurance evidence.
Learningoutcomesandassessmentcriteria
LO3AC3.1,3.2,3.3,3M1,3D1
Task3
Your line manager plans to deliver departmental training on the need for professional ethics whencompleting assurance engagements.You have been asked todraft the presentation slides and prepare speaker notes that your line manager can use in the training.
Yourpresentationslidesandspeakernotesmust:
- Explaintheroleofprofessionalethicsinanassurance
- Analyse how the principles ofprofessional behaviour protect the public and fellow
- Explainthethreatstofundamentalethical
Learningoutcomesandassessmentcriteria
LO4AC4.1,4.2,4.3
Guidelinesforassessors
Work submittedby learners must achievethelearningoutcomes andmeetthestandards specifiedby theassessmentcriteria fortheunit. To achieveameritor distinctiongrade,thelearners must demonstratethatthey haveachievedall thecriteriasetforthesegrades. Wherework for the pass standard is marginal, assessors can take account ofany extension work completed by the learners. The suggested evidence listed belowishow learnerscandemonstratethattheyhavemettherequiredstandards.ThecommandverbscontainedwithintheAC arehighlighted in bold in the suggested evidence boxes.
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Task number |
LOs andAC |
Suggestedevidence PASS |
Suggestedadditionalevidence MERIT |
Suggestedadditionalevidence DISTINCTION |
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1. |
LO1AC1.1, 1.2,1.3,1.4, 1.5,1M1,1D1 LO2AC2.1, 2.2,2.3,2M1 |
Learners are required to prepare a detailed report that focuses on the keyissuesof assurance and internal controls.All definitions,descriptions and explanations should be supported with relevant practical examples.The learners could use their own practical experience to illustratethekeypointsin the report. At all times theresponsesshould be supported with relevant and up to date accounting and assurance policies and practice. Learners should make substantial use of the indicative content. AC1.1 Learners mustexplainthe concept of reasonable assurance in a business organisation and the scope, limitations, nature and purpose of assurance. AC1.2 Learners mustexplainthe assurance process. Assurance processesshouldinclude: |
1M1 The learners are required to provide a fully justifiedassessmentof the need to plan assurance activities.Thelearners must ensure that they consider in their response both the need for professional scepticism and professional judgement. 2M1 Learners mustanalysehow internal controls mitigate risk including inherent risk, control risk, and detection risk. |
1D1 Learners mustevaluatethe impact of the risk of misstatement in assurance and audit environments and discuss the importance of exercising professionaljudgement. |
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engagement acquisition, risk assessment, acceptance of assurance engagement, scope and planning of assurance engagement, completion of the assurance engagement, evidence sourcing, evaluation of assurance work outcomes, conclusions and reporting, record keeping. AC1.3 Learners mustcompare and contrastthe responsibilities of the differentstakeholders involved in an assurance engagement including mangers, employees, external contractors etc. covering legal responsibilities and liability. AC1.4 Learners mustanalysethe possible purposes and outcomes obtained from different types of assurance engagements. AC1.5 Learners mustanalysebest practices, guidelines and benchmarks including international standards relating to assurance practices. These may include, for example: COSO framework, benchmarking principles, guidelines for internal control, important featuresof internationalbenchmarks and international standards. AC2.1 Learners shoulddiscussthe needforcontrolandthemainareas |
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of a business that require effective control systems. AC2.2 Learners mustdescribethe components of internal control in both manual and digital environments with consideration for the control environment, preventative and defective controls and internal audit; components control environment, risk assessment, control activities, information and communication, monitoring. AC2.3 Learners mustexplainhow internal controls are evaluated, risks assessed and conclusions drawn. |
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2 |
LO3AC3.1, 3.2,3.3,3M1, 3D1 |
The learners need to prepare a handbook for task 2, the format and style of which can be chosen by the learner. The description, review and discussions must be detailed and contain practical examples throughout and be supported with relevant theory. AC3.1 Learners mustexplainthe different stages required to gather evidence when completing an assurance engagement including planning and collecting appropriate evidence. AC3.2Learnersmustreview differentmethodsofobtaining |
3M1 Learners are required provide ananalysisof how internal controls are evaluated and conclusions are drawn to provide an audit opinion. At all times the responses should be supportedwithrelevantand up to date accounting and assurance policies and practice. |
3D1 Learners are required to provide a detailed comparison on the reliability of different types of assurance evidence. The different types of evidence chosen by the learners should allow them to bothcompare and contrastand draw conclusions on the usefulness of the evidence in assurance engagements. |
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evidence for assurance engagements including sampling, statistical testing, computer-assisted assurance techniques, interviews withkeypostholdersand operatives (to assess knowledge,understanding and compliance with organisational systems and procedures). AC3.3 Learners mustdiscussthe different roles and levels of management responsibility in relation to assurance. |
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3 |
LO4AC4.1, 4.2,4.3 |
Thelearnersneedtoprepare presentation slides and speaker notes that cover each of the three assessment criteria in the unit. AC4.1 Learners mustexplainthe role and importance of professional ethics and ethical codes in assurance. This should include rule based and principle based codes. AC4.2 Learners mustanalysehow principles of professional behaviour protect the public and fellow professionalsensuringthat assurance engagements are carried out in a professional non-biased manner. AC4.3Learnersmustexplain threatstofundamentalethical |
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principles such as self-interest, self- review, management, advocacy, familiarityand intimidation. |
