{"id":727,"date":"2015-12-22T18:28:24","date_gmt":"2015-12-22T07:28:24","guid":{"rendered":"http:\/\/casestudyhelp.com\/sample-questions\/?p=727"},"modified":"2018-01-25T18:33:51","modified_gmt":"2018-01-25T07:33:51","slug":"hi6026-audit-assurance-and-compliance-assignment-help","status":"publish","type":"post","link":"https:\/\/casestudyhelp.com\/sample-questions\/hi6026-audit-assurance-and-compliance-assignment-help\/","title":{"rendered":"HI6026 Audit, Assurance and Compliance Assignment Help"},"content":{"rendered":"

HI6026 Audit, Assurance and Compliance<\/span><\/h2>\n

Assessment Value<\/strong>: 20%
\nInstructions:<\/strong>
\n\u2022 This assignment is to be submitted in accordance with\u00a0assessment policy stated in the Subject Outline and Student
\nHandbook.
\n\u2022 It is the responsibility of the student who is submitting the work, to\u00a0ensure that the work is in fact her\/his own work. Incorporating\u00a0another\u2019s work or ideas into one\u2019s own work without appropriate\u00a0acknowledgement is an academic offence. Students should\u00a0submit all assignments for plagiarism checking on Blackboard\u00a0before final submission in the subject. For further details, please\u00a0refer to the Subject Outline and Student Handbook.<\/p>\n

\u2022 Answer all questions.
\n\u2022 Maximum marks available: 20 marks.
\n\u2022 Due date of submission: Week 7.<\/p>\n

Assignment Question:<\/span><\/h3>\n

You are currently planning the 30 June 20X7 audit of Forest Ltd, an\u00a0Australian-owned company that produces and exports woodchips to\u00a0Japan. Forest\u2019s operations are located in Eden, on the far south coast of\u00a0NSW. Timber is purchased from forests nearby, processed into woodchips\u00a0and immediately stockpiled for export at the company\u2019s shipyards at\u00a0Twofold Bay. Forest contracts timber cutters to deliver set tonnages of\u00a0logs to its mill throughout the year. Woodchips are transported to Japan\u00a0on charter vessels, which make an average of one trip a month.
\nAt a recent planning meeting with Forest Ltd\u2019s senior staff, you obtained\u00a0the following overview of this year\u2019s operations:
\nA massive conveyor belt is used to transport the woodchips from the mill\u00a0to the stockpile. The manufacturer of this belt was recently taken over by\u00a0an overseas competitor of Forest Ltd, Chipper Ltd, which processes\u00a0woodchips in several South-East Asian countries. Chipper Ltd has\u00a0indicated that it is willing to sell equipment to its competitors, but at\u00a0double the price it will sell to its other customers. It is doubtful whether\u00a0any other companies in the world manufacture such specialised conveyor\u00a0belts.\u00a0Based on current usage figures, it is expected that the existing conveyor
\nbelt will last until December 20X8. Sufficient spare parts are on hand to\u00a0carry out routine maintenance work. However, should a replacement belt\u00a0be required, it would take at least six months to have a replacement made
\nand shipped to Australia, and a further four weeks to install and test it. It\u00a0is unlikely that the company could survive a six months interruption to\u00a0normal operations. Management are currently deciding whether they\u00a0should order a replacement belt from Chipper Ltd despite the excessive\u00a0cost, or continue to search for an alternate supplier.
\nTimber is purchased in 50 hectare lots from plantations and state forests.\u00a0In the past, 70% of timber was sourced from plantations, however this\u00a0has fallen to 50% in the current year. The corresponding increase in\u00a0timber sourced from state forests has angered environmental groups.\u00a0Protests have been held in several forests, which has slowed production\u00a0and frustrated the contractors, who are only paid once set tonnages of\u00a0timber are delivered to the mill. In addition, several shipments of\u00a0woodchips have been delayed, angering the Japanese customers who are
\nthreatening to deduct 20% from amounts owing as compensation for lost\u00a0production time.\u00a0Last month, a protester suffered a broken leg, allegedly because he was\u00a0hit by a timber truck. The protester was blocking the main access road to\u00a0one of the state forests at the time of the accident. The protester is now\u00a0suing Forest Ltd for damages, claiming the contractor was in fact an\u00a0employee of Forest Ltd at the time of the accident, and was acting on
\nForest Ltd\u2019s instructions. Forest Ltd is fighting the case and appears to\u00a0have a reasonable chance of winning; however, the adverse publicity\u00a0being generated is making the state government nervous about selling\u00a0Forest Ltd any more of its timber resources.\u00a0One of Forest Ltd\u2019s customers, Wood Ltd, is claiming that the latest batch\u00a0of woodchips it received was contaminated with a microbe. This microbe\u00a0affects the physical structure of the chips, reducing the pressure the chips\u00a0can withstand when compressed. This has made the chips useless for\u00a0heavy duty items such as desks and bookcases. Wood Ltd is refusing to\u00a0pay its account, which is already five months overdue. Forest Ltd has
\nlaunched an investigation into the allegations, but as yet has not been\u00a0able to substantiate them.\u00a0In January, Forest Ltd upgraded its accounts payable system to a fully\u00a0integrated package that automatically updates the general ledger when\u00a0creditor entries are made. Some problems have been experienced with\u00a0the creditors ledger, which is split into $US and $AUD amounts. In some\u00a0cases, $US amounts have been recorded as $AUD, resulting in inaccurate
\ncreditor balances. Month-end rollovers have also proved problematic, withcre ditor balances being incorrectly re-set to zero at the first of every\u00a0month. This has required each creditor\u2019s history to be re-entered manually\u00a0each month, a time-consuming process that is taking accounting staff\u00a0away from their normal duties.\u00a0During the period, the Australian dollar has remained steady against the\u00a0Yen, although it fell by about 3% against the US dollar. Debtors are
\ninvoiced in $US at the time of shipment, and paid in $US one month after\u00a0the shipment is received. It takes around six weeks for the charter vessels\u00a0to travel from Twofold Bay to Japan. All plantations from which Forest Ltd
\nsources timber are owned by US firms, which demand payment in $US\u00a0prior to the timber being cut. A recent downturn in the Japanese economy\u00a0is affecting forward orders, which have fallen by 15%.\u00a0Required:<\/p>\n

(a) For each of the following items in Forest Ltd\u2019s financial report,\u00a0identify two (2) factors in the information provided that increase\u00a0audit risk:
\n(i) Accounts payable;
\n(ii) Commitments and contingencies;
\n(iii) Inventory; and
\n(iv) Receivables.
\n(b) Discuss one (1) adjustment to be made to your audit plan in
\nresponse to the audit risk associated with each of the factors
\nidentified in part (a).
\n(c) Outline six (6) factors that indicate Forest Ltd may encounter going
\nconcern problems over the next 12 months.<\/p>\n

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