Auditing and Corporate Governance

Knowledge

1. An understanding of the nature and importance of auditing in society.

2. An understanding of the role and responsibilities of directors, auditors and others within the corporate framework.

3. An understanding of the audit framework in the UK.

4. An understanding of the different types of audit and their roles in corporate governance.

5. An understanding of the global issues in audit and accounting.

Assignment Brief:

Please note that this is an individual assignment and the policy of the University on “Policy on Cheating, Collusion and Plagiarism” applies. Please write your Tutor’s name clearly on the front of the assignment.

ISA 500 Audit Evidence requires auditors to obtain sufficient and appropriate audit evidence. Appropriateness is a measure of the quality of audit evidence; that is, its relevance and its reliability.

ISA 200 Overall objectives of the independent auditor and the conduct of an audit in accordance with International Standards on Auditing states that Auditors must plan and perform the audit with an attitude of professional skepticism

Required:

(a) Comment on the external auditors' responsibility with regard to the detection of fraud and from the information provided, critically explain why it was 'perhaps understandable' that they did not detect the fraud which was perpetrated against Rock Star Ltd.

(b) State and explain FOUR inherent limitations of internal control.

(c) Identify and evaluate THREE factors which influence the reliability of audit evidence

(d) Describe and explain the main methodologies the auditors can use to gather sufficient evidence

(e) Analyse the following components of audit risk

i. inherent risk

ii. control risk

iii. detection risk

Describe FIVE audit risks, and explain the auditor’s response to each risk, in planning the audit of Hurling Co. Note: Prepare your answer using two columns headed Audit risk and Auditor’s response respectively.

(i) Critically explain FIVE ethical threats which may affect the independence of Caving & Co’s audit of Hurling Co; and

(ii) For each threat, suggest a safeguard to reduce the risk to an acceptable level. Note: The total marks will be split equally between each part. Prepare your answer using two columns headed Ethical threat and Possible Safeguard respectively.

Submission Policies:

· You are required to submit your work within the bounds of the University Infringement of Assessment Regulations.

· Your assignment must be submitted to Canvas for Turnitin and JIRA in electronic form with an accurately and clearly completed title page.

· All Students must submit a Turnitin© report along with their assignment to JIRA. If under any circumstances the assignment is submitted without this, the final mark will be withheld an there will be potential delays.

· Students may submit drafts through Turnitin and generate reports prior to submission. The  last submission prior to the deadline will be deemed to be the final submission for assessment  purposes. Please note that you need to allow 24 hours between submissions through Turnitin to generate a fresh/new/different report so please do not leave submission to the last moment.

· All works submitted MUST be original. If under any circumstances a student is found to be violating any of the 'Academic Integrity' rules, the university deserves the right to take legal and disciplinary actions against the individual.

· Your submission links will become available approximately 3 weeks prior to your submission deadline, along with detailed instructions on how to submit your assignment,