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Andit Cases – A Practical Approach to Auditing – Accounting Audit Assignment

1.0   Introduction

Audit Firm:

Assume that you are part of the highly qualified audit team employed by the Disney Land Audit Company Limited, an auditing Finn, which is internationally recognized and one of the largest professional accounting Finn globally. Your audit team comprises of 5 members who are as follows:

Audit team:

Memberl     –     Audit Assistant/Junior

Member2    –     Audit Senior

Member3    –   Audit Supervisor

Member4   –     Audit Manager

MemberS    –   Audit Partner

Disney Land Audit & Co, has been chosen as the Independent external auditors of one of the US’s largest multinational company known as ‘Las Vegas Group Corporation (USA) Limited’ which will be your audit client hereafter. Your audit team comprising of the above members’ and positions’ has been engaged to carry out a financial statements audit for this client ‘Las Vegas Group Corporation (USA) Limited’.

 

Company Background:

 

Las Vegas Group Corporation (USA) Limited is based in United States of America with its head office in Las Vegas City, State of Nevada. It is the parent body of the many subsidiary companies which operates in the international market in dealing with a wide range of items for exports to other countries. The company operates in most of the countries including, Australia, New Zealand, Hong Kong, Singapore, Malaysia, China, Japan, and Fiji.

Las Vegas Group Corporation has been incorporated in 1990 and has been in operation since then till today. The company has 5 major subsidiaries which are specialized in different segments as follows:

Parent - Subsidiary Company’s:

Subsidiary 1- Carpets  International (USA) Limited (Case for Audit Assistant)

Subsidiary 2 – Fashion Designers Limited (Case for Audit Senior)

Subsidiary 3 – Computek Electronics Limited (Case for Audit Supervisor)

Subsidiary 4- Enron Electric Limited (Case for Audit Manager)

Subsidiary 5- General Machinery Company Limited (Case for Audit Partner)
Introduction to Subsidiary Companies:

Subsidiary 1- Carpets International (USA) Limited (Case for Audit Assistant)

The Carpets International (USA) Limited Pty Limited is an American subsidiary company of Las Vegas Group  Corporation  (USA)  Limited  which  is  listed  on  the  New  York  Stock  Exchange. Your  firm  DisneyLand Audit & Co, provides a clearance report to your clients Las Vegas Office as Well as an audit report on the statutory accounts of the American subsidiary. The company manufactures Carpets and sells internationally. The primary raw material used in the manufacture of the company’s  product, carpet, is wool which is purchased from Australia.

Subsidiary 2- Fashion Designers Limited (Case for Audit Senior)

Fashion Designers Limited is also an American subsidiary company of Las Vegas Group Corporation (USA) Limited which is listed on the New York Stock Exchange and its major shareholder (51%) is the US parent which controls the use of the accessory brand names throughout the world. Fashion Designers Ltd is a large multi-national manufacturer and distributor of fashion accessories. Fashion Designers Ltd operates predominantly out of Australia and is rapidly expanding into Asia and Eastern Europe.

Subsidiary 3- Computek Electronics Limited (Case for Audit Supervisor)

Computek Electronics Limited, is a wholly owned subsidiary of the US parent company, Las Vegas Group Corporation (USA) Limited. The principal activities of Computek Electronics Ltd are the importation and distribution of  modems and personal computers. It has offices in  all capital cities in  US and around Australia. All inventories are purchased either from its US parent or related companies in Hong Kong and Taiwan. Computek Electronics Ltd was incorporated in 1991.

Subsidiary 4- Enron  Electric Limited (Case for Audit Manager)

The Enron Electric Limited is also a subsidiary company of Las Vegas Group Corporation (USA) Limited. Enron Electric Ltd., is a manufacturer and distributor of household electrical products. The Company contains a number of subsidiaries with diverse operations.

Subsidiary 5- General Machinery Company Limited (Case for Audit Partner)

The  General  Machinery  Company  Limited,  is  another  subsidiary  company  of  Las  Vegas  Group Corporation (USA) Limited. The General Machinery Company Limited is primarily a distributor of a range of machinery and equipment and also engages in other business activities. It has assets of approximately $4m, including current assets of nearly $2m.

 

0  Instructions for Students:

This will be both an individual and a group assignment on practical approach to auditing and you need to complete this task as a member of the audit team and an audit team generally. This assignment is based on ‘a practical approach to auditing’ for the company ‘Las Vegas Group Corporation (USA) Limited’. This company is the parent body and has been in operation since 1990. This assignment is produced for helping 300-level auditing students of USP in broadening their understanding of applying the basic auditing principles, procedures, concepts and techniques in a practical audit situation in an ever-challenging audit environment. You need to discuss this case study with your fellow audit team members and make an individual effort to complete this assignment and then you need to submit this assignment as an audit team.

3.0  Requirements for Students:

Disney Land Audit & Co, your auditing firm is seeking your assistance in auditing the financial statements of the 5 major Las Vegas Group Corporation’s subsidiary companies operating globally.

There are 5 sections in this case study. The requirements of each member of the audit team are provided t           specifically in each section of the case study. You need to individually complete your section ONLY and submit  to the audit  team (all  of  you 5  members), which will then collate  and combine all the tasks performed by each member of the team and present in a report form to the respective tutors in each tutorial group. Each case in each section needs to be considered independently.

There will be 2 parts for your assignment:

  1. Oral Seminar Presentation 5%
  2. Written Report Submission I 0 %

Total weighting towards coursework  15 %

You need to orally present your report and audit findings in your respective tutorial sessions during Week

  1. All the groups per tutorial session need to make presentation of their assignment in the same tutorial in week 13.

 

  1. Oral Seminar Presentation in Week 13 (5%):

For oral seminar presentation, each group will be given a minimum of 15 and a maximum of 20 minutes to present their findings in summary form. You need to allocate individual time say about 4-5 minutes for each presenter. Your tutor will be the time keeper so Group’s exceeding the time of20  minutes will incur a penalty of  I% off from the total of 5% oral presentation marks. This is because in audit, time is very precious and vital for determining audit fees and budgets. Auditors always have a budgeted time frame within which they need to complete their audit and make presentations to the firm. Exceeding time limits will  mean  extra  cost  and  over-budgets  for  auditors.  This  will  have  a  negative  effect  on  auditors’ performance; therefore, time management is very important in auditing. Also note that the contents of the findings will not carry any marks in your oral presentation. We only need to see how the team makes presentation based on their individual capabilities and working as a team. As such, the mark allocation for oral presentation will be as follows:

Eye contact (ability to present without reading)           I % Visual aid (use oflaptop/PowerPoint slides)                I % Physical appearance (formal dress code)                      I % Time management (maximum of 20 min)                    I % Teamwork approach (ability to present as a team)       I % Total oral presentation marks                                    5 %

 

  1. Written Report Submission in Week 13 (10%):

For written report submission, each group needs to submit ONE assignment in a report format, typed using Microsoft 12-point time’s new roman font. All reports must be typed and binded. Hand-written reports will not be accepted. The report will be due in the week 12 tutorials immediately after your oral presentation. You  need  to  submit  the  written  report  to  your  tutors  in  the respective  tutorials  in  Week  13.  Late

i         submissions will incur a penalty of 10% marks off each day late from their total marks. No reasons or excuses will be accepted for late submissions. Each member of the audit team needs to complete his/her section as required as part of the audit team and submit to the audit team for compilation and binding. Each section will have an equal weighting and each member will be given a mark allocated to the overall report. This means that all the members will be entitled to receive EQUAL marks irrespective of their positions or requirements from the assignment. However, if a team member fails to co-operate with the group then the remaining group members’ marks will be scaled-up to meet the total of 15%. This will only be done when a

particular group member fails to complete his/her assigned task and fails to submit his/her section in the overall report with the other members. In any case, if a group member fails to submit his/her share then he/she will automatically get a mark of ‘zero’  for his/her seminar while the other members will still get their share of work. The mark allocation for the written submission will be as follows:

Audit Assistant Section 1.50%
Audit Senior Section 1.50%
Audit Supervisor Section 1.50%
Audit Manager Section 1.50%
Audit Partner Section 1.50%
Total marks for the content of the report 7.50%
Format & Presentation Clarity y,%
& Completeness V2%
Computations & Calculations y,%
Preciseness & Understanding y,%
Bibliography & References y,%
Total marks for Written submission 10%

 

Note:

This is one of the major course assessments for your coursework and final grades in this AF304 auditing

course. This assignment is compulsory and failure to meet all these requirements will affect your performance and weighting towards the 15%  marks in  your course assessment. This will result in the course lecturers’ discretion for your final marks and grades in this AF304 course.

 

4.0       Format of the Report:

 

Your final report need to be arranged in the following format and order:

,;,j.      Title page including members’ details

,;,j.     Table of contents

,;,j.      Auditors report for the group (Extract)*

,;,j.      Solutions for case I

,;,j.      Solutions for case 2

,;,j.      Solutions for case 3

,;,j.      Solutions for case 4

,;,j.    Solutions for case 5

,;,j.     Bibliography & References

 

*You may not be able· to prepare a detailed audit report for the overall parent company, however, you need to prepare the type of audit report you seem to be suitable for Las Vegas Group Corporation overall considering  the 5  subsidiaries. You  need to provide a typical format of the auditors report including sections on auditors’  responsibility, independence and auditors opinion. This is the responsibility of the group.

Check out all 5 section related to Accounting Audit Assignment questions:

Section 1- To be completed by the ‘Andit Assistant’ ofthe Audit Team

Section 2- To be completed by the ‘Audit Senior’ of the Audit Team

Section 3- To be completed by the ‘Audit Supervisor’ ofthe Audit Team

Section 4- To be completed by the ‘Audit Manager’ of the Audit Team

Section 5- To be completed by the ‘Audit Partner’ of the Audit Team

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