Auditing and Assurance MAA303

MAA303 Auditing and Assurance Trimester 3

2024 Assessment Task 2 Part B Individual

DUE DATE: Thursday, 9 January 2025, by 8:00pm (Melbourne time)

PERCENTAGE OF FINAL GRADE: 30%

WORD COUNT: 1000-1200 words

Description

Purpose

This task covers the contents from Topic 1 to Topic 7. This task provides you with opportunities to learn the discipline-specific knowledge and capabilities (GLO1, ULO1, ULO2, ULO3, and ULO4), critical thinking (GLO4, ULO2, and ULO3), and problem solving (GLO5 and ULO4) required in the study and practice of auditing and assurance. By completing this task, you will develop your skills in researching, understanding, applying, evaluating, and presenting information required of auditing and assurance professionals.

Context/Scenario

For this task, you will be given a case relevant to auditing and assurance. Assume you are an auditing and assurance professional in the given case. You must make professional judgments and decisions to apply relevant standards and then explain your judgments and decisions.

Specific Requirements

There is no format requirement for this task. You may not receive full points if your answers are too broad or vague (e.g., you answer ensure integrity but do not specify how, or you answer use policy but do not specify what the policy should say) (i.e., if a marker does not see that you can apply your knowledge). You may not receive full points if your answers are partially wrong (e.g., the correct answer is self-interest threat but your answer is self-interest threat and self-review threat).

Learning Outcomes

This task allows you to demonstrate your achievement towards the Unit Learning Outcomes (ULOs) which have been aligned to the Deakin Graduate Learning Outcomes (GLOs). Deakin GLOs describe the knowledge and capabilities graduates acquire and can demonstrate on completion of their course. This assessment task is an important tool in determining your achievement of the ULOs. If you do not demonstrate achievement of the ULOs you will not be successful in this unit. You are advised to familiarise yourself with these ULOs and GLOs as they will inform you on what you are expected to demonstrate for successful completion of this unit.

The learning outcomes that are aligned to this assessment task are:

Submission

You must submit your assignment in the Assignment Dropbox in the unit CloudDeakin site on or before the due date. When uploading your assignment, name your document using the following syntax: . For example, Jones_Barry_123456789_MAA303.doc.

Submitting a hard copy of this assignment is not accepted. You must keep a backup copy of every assignment you submit until the marked assignment has been returned to you. In the unlikely event that one of your assignments is misplaced you will need to submit your backup copy.

Any work you submit may be checked by electronic or other means for the purposes of detecting collusion and/or plagiarism and for authenticating work

When you submit an assignment through your CloudDeakin unit site, you will receive an email to your Deakin email address confirming that it has been submitted. You should check that you can see your assignment in the Submissions view of the Assignment Dropbox folder after upload and check for, and keep, the email receipt for the submission.

Marking and feedback

The marking rubric indicates the assessment criteria for this task. It is available at the end of this document and in the CloudDeakin unit site in the Assessment folder, under Assessment Resources. Criteria act as a boundary around the task and help specify what assessors are looking for in your submission. The criteria are drawn from the ULOs and align with the GLOs. You should familiarise yourself with the assessment criteria before completing and submitting this task.

Students who submit their work by the due date will receive their marks and feedback on CloudDeakin 15 working days after the submission date.

Extensions

Extensions can only be granted for exceptional and/or unavoidable circumstances outside of your control.

Requests for extensions must be made by 12 noon on the submission date using the online Extension Request form under the Assessment tab on the unit CloudDeakin site. All requests for extensions should be supported by appropriate evidence (e.g., a medical certificate in the case of ill health).

Applications for extensions after 12 noon on the submission date require University level special consideration and these applications must be must be submitted via StudentConnect in your DeakinSync site.

Late submission penalties

If you submit an assessment task after the due date without an approved extension or special consideration, 5% will be deducted from the available marks for each day after the due date up to seven days*. Work submitted more than seven days after the due date will not be marked and will receive 0% for the task. The Unit Chair may refuse to accept a late submission where it is unreasonable or impracticable to assess the task after the due date.

*'Day' means calendar day for electronic submissions.

An example of how the calculation of the late penalty based on an assignment being due on a Thursday at 8:00pm is as follows:

• 1 day late: submitted after Thursday 11:59pm and before Friday 11:59pm 5%

• 2 days late: submitted after Friday 11:59pm and before Saturday 11:59pm 10%

• 3 days late: submitted after Saturday 11:59pm and before Sunday 11:59pm 15%

• 4 days late: submitted after Sunday 11:59pm and before Monday 11:59pm 20%

• 5 days late: submitted after Monday 11:59pm and before Tuesday 11:59pm 25%

• 6 days late: submitted after Tuesday 11:59pm and before Wednesday 11:59pm 30%

• 7 days late: submitted after Wednesday 11:59pm and before Thursday 11:59pm 35%

The Dropbox closes the Thursday after 11:59pm AEST/AEDT time.

Support

The Division of Student Life provides a range of Study Support resources and services, available throughout the academic year, including Writing Mentor and Maths Mentor online drop ins and the SmartThinking 24 hour writing feedback service at this link. If you would prefer some more in depth and tailored support, make an appointment online with a Language and Learning Adviser.

Referencing and Academic Integrity

Deakin takes academic integrity very seriously. It is important that you (and if a group task, your group) complete your own work in every assessment task Any material used in this assignment that is not your original work must be acknowledged as such and appropriately referenced. You can find information about referencing (and avoiding breaching academic integrity) and other study support resources at the following website: http://www.deakin.edu.au/students/study-support

Your rights and responsibilities as a student

As a student you have both rights and responsibilities. Please refer to the document Your rights and responsibilities as a student in the Unit Guide & Information section in the Content area in the CloudDeakin unit site.

Case ANZAS

Listed in the Australian Securities Exchange (ASX) since 2011, Australia and New Zealand Aerial Services Limited (hereafter, ANZAS) is widely regarded as the worlds leading airline and has the strongest brand in Australasia. ANZASs head office is in Melbourne. ANZASs main business is the transportation of customers operating regionally, domestically, and internationally. ANZAS also has other businesses including freight enterprises and a frequent flyer program.

In late November 2024, you learned that your job application to Menendez Accounting, a very large international accounting firm, was successful. As such, you started working as an associate auditor at Menendez Accounting on 1 December 2024, and, after you completed your compulsory trainings, you were assigned to assist in performing audit planning for the ANZAS audit engagement for the year ended 30 June 2025. Once you learned about your ANZAS assignment, you immediately contacted your good friend, Leslie Abramson, whom you recalled working in the finance department at ANZAS, to catch up.

Upon catching up with Leslie Abramson, you learn that she recently resigned from ANZAS and thus is no longer working for ANZAS. While she hesitates to share her reasons for leaving ANZAS due to the confidentiality agreement she signed as an employee, she complains that she could not tolerate the work in the finance department. Because many key employees in the finance department left ANZAS after the current CFO had started his role two years ago, and because each of these key employees stayed about three to six months at ANZAS, she believes that her departure from ANZAS after five months (from 1 July 2024 to 30 November 2024) is not due to her lack of effort. The person sitting in her role before, Dominick Dunne, did not stay long neither. However, she did learn a lot of things from her five months at ANZAS given that her role was a critical role for the finance department at ANZAS.

In a meeting with your team about audit planning prior to client visit, you obtain information about ANZAS from your manager. Your manager indicates that, while the airline industry is competitive, ANZAS has not had any major change in its operations and its operating performance for several years. The number of salary-based and wage-based employees (about 5,000 and 15,000, respectively) have been very stable across time. Other selected information is presented below.

During your client visit, you obtain and read the branch manual. Each branch refers to a ground team operated at a different airport (e.g., a team in the Melbourne airport is one branch, and another team in the Sydney airport is another branch). From the branch manual, the system only accepts debit cards and credit cards for over-the-counter transactions (e.g., sales of last-minute tickets, extra baggage fees, and class-upgrade fees). Furthermore, no one in any branch carries and manages a petty cash fund to handle operations of each branch. Any request from a branch, either a general or specific request, must go through the system.

For example, refunding customers due to last-minute flights cancellation (i.e., a general request) needs to be lodged into the system by branch staff and then approved by a branch manager before the request is directed to the centralised finance department for payment processing. Similarly, refunding one customer due to the system error regarding seat selection (i.e., a specific request) needs to be lodged into the system by branch staff and then approved by a branch manager before the request is directed to the centralised finance department for payment processing. When the payment amount according to the request is more than $5,000, the request will first be directed to the CFO for another approval and then redirected to team members in the finance department for payment processing.

While all staff at a headquarter, all pilots, and all cabin crews are salary-based employees, all branch staff are wage-based employees. Each branch staff must clock-in and clock-out at a designated location in airports by using their staff card tapping at a reading machine embedded with a facial recognition software. After the machine reads the information on staff cards and successfully checks the face of the branch staff (captured immediately when tapping card) with the face pre-recorded in the system (captured when initially employed), the machine automatically records a clock-in or clock-out time.

In unforeseen circumstances that branch staff need to, and do, work longer than the allocated time of their shift (e.g., flights in the last shift of a day being significantly delayed), branch staff do not need to manually request for overtime (overtime is not applicable for salary-based employee). Instead, the system will automatically calculate overtime using the clock-in and clock-out time from the machine. At 3 am each day, the system prepares a daily timesheet report of a previous day for a branch manager.

A branch manager does not need to do anything about a daily timesheet report unless there is overtime involved. When there is overtime, the system automatically prepares an overtime request along with a daily timesheet report. A branch manager then needs to approve the overtime request according to the report for the purposes of payroll processing. Similar to other requests, the overtime request cannot be approved without justifications (in this case explaining why overtime is needed). Otherwise, the system will not forward the overtime requests to the centralised human resource (HR) department for payroll processing.

Once the HR department successfully processes all the payroll information, including the overtime information, for each fortnight, the HR department sends the payment request to the centralised finance department via the system (in the similar fashion that the branch staff sends the refund request) to the centralised finance department for payment processing.

Required (30 points):

It is highly important that you read the Specific Requirements on page 1 of this document.

You do NOT need the information from the assessment task 2, part A to successfully complete this assessment task (the assessment task 2, part B).

For the following questions, you must only use the information from the case provided to you. You must not assume outside information or make up unnecessary information (e.g., COVID-19). For some questions, there may be more than one correct answer, so you can pick what you want to answer, again, based on the information from the case provided to you.

1. Your manager has concerns about potential frauds and wants you to (1) identify two red flags and (2) identify one component of fraud triangle relevant to each red flag and explain (6 points)

2. Your manager assigns you to perform risk assessments for the cash account. Given the time constraints, your manager notes that, for the purposes of this task, you do not need to consider each key assertion separately, but you must consider all the key assertions collectively. Your manager wants you to:
   
   
   • Identify a level of inherent risk (either low or high) and explain
   
   
   • Identify a level of control risk (either low or high) and explain
   
   
   • Identify a level of detection risk (either low, moderate, or high).
   
   
   • Identify a level of sufficient appropriate evidence
   
   
   • Identify an audit (10.5 points)
   
   
   

3. Your manager assigns you to plan tests of controls for the payroll cycle. Your manager wants you to (1) identify two key internal controls in place that you plan to rely on, (2) identify one key assertion relevant to each control, and (3) identify one audit procedure (or one set of audit procedures that need to be performed together) to effectively test each Your manager emphasises that you must provide sufficient information for understanding in a documentation, for the purposes of a review process. (9 points)

4. Your manager just pre-reviews the documentation of your understanding of ANZASs payroll cycle and the details. As your manager learns that ANZASs overtime expense for the first five months of the year (from 1 July 2024 to 30 November 2024) is about $800 million, and for the year ended 30 June 2025 (forecast) is about $1,912 million, your manager is concerned about this line-item and thus asks you to perform relevant analytical Your manager wants you to (1) show one result of the relevant analytical procedures, (2) summarise based on such result whether your manager should plan to increase sufficient appropriate evidence for the payroll cycle, and (3) explain why. (4.5 points)