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Audit Planning Project




ACCT 4543;Audit Planning Project (50 points);Objective: This project is designed to help students experience the audit planning process, and thereby learn how it helps direct an effective and efficient audit. In particular, it should help student learn to focus on materiality and risk. It should also help students to gain an appreciation for the role professional judgment plays in auditing.;Description: Use the instructions below, along with concepts learned in class and from the text, to plan an audit of Waren Sports Supply?s financial statements. Waren is of course a fictitious company whose company and financial information is available in the SUA materials and in the previous assignment.;Planning an audit involves the following processes?in no particular order, and by no means independent from each other;- Gain an understanding of the client?s organization, its processes, and its environment.;- Identify significant thresholds such as materiality and planned audit risk.;- Assess the risk of material misstatement from error and/or fraud (inherent risk).;- Evaluate the client?s internal controls (control risk).;- Based on the above, develop a logical audit plan.;Your audit plan should include at least the following;- A description of the client, its processes, its key players, etc.;- Overall planned level of audit risk (AR) for the audit.;- Overall planning materiality and tolerable misstatement.;- Identification of the riskiest accounts/transactions/assertions and general comments about how these risks will be addressed.;- Audit strategies for the audit in general and for individual cycles (related processes/accounts). This includes assessments of inherent risk (IR) and control risk (CR) for each cycle and brief discussions of nature, timing, and/or extent of the resulting substantive tests.;- Discussion of the need for specialists and the use of internal auditors.;- Identification of reporting deadlines and specific dates for field work (tests of controls and substantive tests).;Note: Although developing specific staffing and budgets are also typical during planning, we will not perform these tasks in this assignment.;Special Instructions: The output from your work will be a multi-page memorandum documenting all of your planning decisions, as well as the related decision processes, rationales, supporting analyses/documents. This informal document should summarize planning decisions, and provide direction for the audit. All judgments and conclusions must be supported by good reasoning and logic. Supporting schedules, analyses, and questionnaires should be included as appendices. However, all procedures or significant items should be summarized in the body of the document. Planning memos do not include audit programs.;All the information you need to plan your audit is contained in the SUA materials and in the previous assignment. Some of this information may require some searching and lateral thinking to assemble. If information cannot be found, please make reasonable assumptions and proceed.;Do not postpone this assignment until the last minute! Originality and creativity is appreciated. A good strategy is to bring in ?early? versions of the memo for comments. Enjoy!


Paper#20770 | Written in 18-Jul-2015

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