Apart from assessing those abilities, the assignment also aims to assess students' ability to present a written report in a professional manner by taking into consideration the target audience and the formatting requirements.
REQUIRED
Assume that you are an audit senior who has been assigned to the audit of Australian Pharmaceutical Industries Limited (ASX code API). Your audit team is responsible for planning the Australian Pharmaceutical Industries Limited audit engagement for the year ended 31 August 2017. You have been instructed by the engagement partner to gather the relevant background information about the company as part of the procedures to obtain an understanding of Australian Pharmaceutical Industries Limited and its environment as per
Auditing Standard ISA 315. Based on the information gathered and the understanding of the client and its environment, you need to prepare a report for the Australian Pharmaceutical Industries Limited audit committee.
Your report must address the following issues:
1. You need to provide a detailed background description about Australian Pharmaceutical Industries Limited. This must include the information about its business operations, nature of revenue streams, product and services, market and competition, and regulatory environment. For the regulatory environment, you must be specific as to the regulations that affect the operation of Australian Pharmaceutical Industries Limited. The information presented must be based on your in-depth understanding of company's operation. Students who simply provide a summary of information from the annual report will not receive good marks.
2. One of the commonly used approach to assist auditor in obtaining information about the risks arising due to the nature of the entity's and its environment is the PEST analysis. It is a strategic analysis that divides the client's business environment into the following four domains of influence: Political (P) Economic (E) Social (S) Technological (T)
You need to prepare a PEST analysis detailing the factors that may have a material impact on the business of Australian Pharmaceutical Industries Limited. Two factors are expected for each of the four domains. You need to clearly explain how each of the factors could influence the client.
3. List and explain five key audit risks which would impact on the audit of Australian Pharmaceutical Industries Limited. For each of the key audit risks identified, identify the account and explain the main assertion at risk. The risks must be specific and relevant to the context of the audit of Australian Pharmaceutical Industries Limited. Each of the risks needs to be clearly elaborated.
4. Apart from the general formatting requirement described below, your report should be presented professionally in a format as if it were to be presented to an audit committee meeting. When appropriate, the use of tables, graphs and charts is highly encouraged. However, the assignment must be largely based on the text in paragraphs. Students need to demonstrate appropriate and accurate use of the Harvard style for references and citations.