Question 1: Expanding Role of the auditor and Integrated reporting (20 marks)
The concept of integrated reporting has evolved over several years and in 2013 the International Integrated Reporting Council (IIRC), which had been formed in 2010, released an Integrated Reporting Framework (IR Framework). Both the National Australia Bank Ltd (NAB) and Woodside Petroleum Ltd (Woodside) participated in a trial of the new framework and continue to prepare integrated reports. Both companies also prepare a range of other reports each year.
Required:
(a) Define and explain integrated reporting. (3 marks)
(b) For 2016, please identify the NAB’s and Woodside’s integrated report, compare the two reports and provide the following information.(The integrated report of NAB and Woodside can be find in their official website in internet.)
- The title of the IR reports. (1 mark)
• Similarities and differences in their adherence to the IR Framework (this will require referencing back to the IR Framework). (8 marks)
• Similarities and differences in the type (level) of assurance provided by the auditor. (4 marks)
(c) Identify and explain the issues auditors face when assuring integrated reports. (4 marks)
Question 2: Auditor independence and ethics (30 marks)
You are a senior auditor in a firm of auditors in a country town. The major client of the firm is the town’s largest registered club. You are in charge of the audit and report directly to the partner.
With the rural recession and the move of certain industries from the town, your firm is dependent upon the continuance of the club as an audit client.
The secretary manager of the club has held the position for over 20 years and is well respected in the town. He had worked hard to build the club from humble beginnings. The secretary manager has a strong personality and exerts influence on the board of directors of the club. The audit partner and the secretary manager are members of the same golf club and play regularly on Saturday mornings.
The club is currently undergoing major renovations with the work undertaken by ABC Builders.
To get home, you have to drive past the secretary manager’s house. One night you notice that the secretary manager is having more renovations done on his home and that there is an ABC truck delivering material to the house. Next day at lunchtime you drive past the house again and see an ABC truck, and this time there are tradespeople working on the house.
You have just commenced the year-end work for the club and during your visit to the club’s premises, you obtain copies of tenders for the renovations and find that ABC was the most expensive tenderer. A check of the minutes of the director’s meetings reveals that the secretary manager convinced the board to accept ABC’s tender based on their perceived quality.
You are concerned that there may have been some impropriety on behalf of the secretary manager. You raise your suspicions with the audit partner, who dismisses them out of hand and says even if there was any substance to them, what could the firm do about them.
Required
(a) Identify and explain any potential independence threats in the above scenario. (5 marks)
(b) Using the AAA decision model identify any ethical issues involved here and recommend the course of action you would take. (25 marks)
In addition to the marks for question 1 and 2, up to 10 marks will be given for Professional presentation and communication, including the presentation requirements set below, and referencing in accordance in with the CSU Guide to APA referencing as set out in the marking guidelines.
Rationale
Covering material from topics 1 to 2, this assessment has been designed to develop your abilities to:
- be able to explain the role of assurance services and providers;
- be able to identify and evaluate the influences on the audit processes, including the Corporations Act, Common Law, Australian and International professional standards, professional bodies and public expectations within a global market;
- be able to appraise the expanding scope of auditing in the current international business environment.
Presentation
The following points are a general guide for presenting assessment items.
- Assessment items are to prepared using Word.
- Use 1.5 spacing between lines.
- Double enter between paragraphs.
- Use a wide left margin, as markers need space to be able to include their comments.
- Use a standard 12pt font such as Times New Roman, Calibri or Arial.
- Left- justify body text.
In addition this assessment is to be presented in the following format and using respective word features:
- Separate title page with your name, student number, subject code, assessment number and assessment question. Include class time and tutor’s name if applicable.
- New page for each question.
- The header level function in word is to be used for question headings and sub-headings.
- A contents page using the “table of contents” tool in the reference tab of word is to be included
- All pages, except the cover page, are to be numbered.
- Name and student number to be included in a header or footer on each page.
Finally:
- Always keep a copy of your assessments. Both a hard copy and an electronic copy.
- Most importantly, always use your spelling and grammar checker, but remember that this does not pick up all errors. You must still manually and carefully edit your work
