ACCT20040-Auditing and Ethics Assessment Task

CQUniversity AustraliaSchool of Business & LawACCT20040 – Auditing and Ethical Practice ACCT20075 – Auditing and Ethics Assessment Task – Term 3, 2016The object of this assignment is to assist students to develop critical analysis skills in relationto auditor independence and issues in accepting audit engagements.This is a written assessment with a weighting of 30%. A marking rubric has been provided toassist you with the marking scheme for this assessment task. The written assessment is to bepresented in report format, . Moodle will be available to accept assignments from 1st December for studentswho wish to submit in week 4. The report is to have a maximum length of 1,000 words.You have graduated with your accounting degree and recently commenced work withFellowes and Associates Chartered Accountants. As a recent University graduate with topmarks in your audit course, the firm’s audit partner, Tania Fellowes, has asked you to preparea report for the firm’s partners.Background informationThis assignment is based on the Professional Application Question 2.37 in your e-text.Fellowes and Associates Chartered Accountants is a successful mid-tier accounting firm witha large range of clients across Australia. During the 2014 year Fellowes and Associatesgained a new client, Health Care Holdings Group (HCHG), which owns 100 per cent of thefollowing entities:• Shady Oaks Hospital, a private hospital group• Gardens Nursing Home Pty Ltd, a private nursing home• Total Cancer Care Limited (TCCL), a private oncology clinic that specialises in the treatmentof cancer.Year-end for all HCHG entities is 30 June.TCCL owns two relatively old linear accelerators used in radiation therapy. Recently,radiographers using these linear accelerators have raised concerns that they have adverseradiation impacts on patients.The CEO of TCCL, Betty Buick, has approached Tania Fellowes, the audit partnerresponsible for the financial report audit, about undertaking an engagement in respect of thelinear accelerators. Betty has requested Tania provide an opinion that the linear acceleratorsare fit for use. Betty pointed out that the TCCL audit is up for tender the following year andsuggested Fellowes and Associates might like to take on the linear accelerators engagementwithout charging a fee as a gesture of goodwill.Prior to the appointment of Fellowes and Associates as the auditor for the group whichcontrols TCCL, HCHG, for the 2014 financial year, some preliminary analysis by TaniaFellowes identified the following situations:1. One of the accountants intended to be part of the 2014 audit team owns shares in HCHG. Theaccountant’s interest is not material to him.2. Fellowes and Associates was previously engaged by HCHG to value its intellectual property.The consolidated balance sheet (statement of financial position) as at 30 June 2014 includesintangible assets of $30 million, which were valued by Fellowes and Associates on 1 March2014 following HCHG’s acquisition of the subsidiary Shady Oaks Hospital. The intangiblesare considered material to HCHG.Assignment RequirementsThe audit partner requires a written short report to be presented in simple language and in aninteresting, easy-to-read format. It should:i. Using your knowledge of APES 110, identify and explain the potential type of threat toFellowes and Associates’ independence in situations (1) and (2) above.ii. What action should Fellowes and Associates take to eliminate the potential threats toindependence in situations (1) and (2) above? What safeguards should be instituted toreduce the risk of similar independence threats occurring in the future?Formatting RequirementsPlease note that penalties will apply for not following the formatting instructions.The Report will consist of:• Cover page which shows the title of the report, the author (Student name and IDnumber) and the word count• table of contents• a one-page executive summary• the report itself• referencesPresentation. The report is required to be prepared in 1.5 line spacing, using a Times NewRoman 12 point font, with 2 cm margins on all sides (remember penalties apply for notfollowing instructions). You are required to cite at least four (4) current sources which shouldinclude items from the following categories: academic literature, textbooks, media, andwebsites. It is vital that the sources used are reliable, reputable, and relevant, cited in anaccurate manner and properly referenced using the APA method. (Please note: Do notinclude lecture slides in your list of citations, you are expected to refer to the abovementionedsources)The report should be presented in simple language and in an interesting, easy-to-read format.Digital file. The entire document is to be prepared in an electronically-friendly documentformat as a single file.Submission. The report is to be submitted online through the Moodle site for this unit.Note: Assignments will be checked for plagiarism and ghost writingThe total word length should be no more than 1000 words, (excluding the reference list). You mustinclude your word count on the cover page.

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