Audit Committee: Objectives, Terms of Reference, and Interaction with Internal and External Auditors

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Module 4 Week 4
Term and Year Term 2 2018
Assessment Type Questions and answers
Student Name: Syed Jaffar Abbas
Student ID No: V20170604
Qualification : FNS50215 - Diploma of Accounting
Unit Code: FNSORG505
Unit Title: Prepare financial reports to meet statutory requirements
Assessor’s Name Ada Du
Student Declaration: I declare that this work has been completed by me honestly and with integrity. I understand that the
Elite Education Vocation Institute’s Student Assessment, Reassessment and Repeating Units of Competency Guidelines
apply to these assessment tasks.
Student Name:
Student Signature: Date: 07/05/2018
Assessment submission (new) requirements
Please save this file as PDF format(include your name to the filename) before uploading onto Moodle.
Assessment deadlines penalty
It is expected that unless a simple extension, special consideration or disability services adjustment has been granted,
candidates will submit all assessments for a unit of study on the specified due date. If the assessment is completed or
submitted within the period of extension, no academic penalty will be applied to that piece of assessment.
If an extension is either not sought, not granted or is granted but work is submitted after the extended due date, the late
submission of assessment will result in
Assessment/evidence gathering conditions
Each assessment component is recorded as either Satisfactory (S) or Not Yet Satisfactory (NYS). A student can only
achieve competence when all assessment components listed under procedures and specifications of the assessment
section are Satisfactory. Your trainer will give you feedback after the completion of each assessment. A student who is
assessed as NYS is eligible for re-assessment. Should the student fail to submit the assessment, a result outcome of Did
Not Submit (DNS) will be recorded.
Principles of Assessment
Based on Clauses 1.8 – 1.12 from the Australian Standards Quality Assurance’s (ASQA) Standards for Registered Training
Organizations (RTO) 2015, the learner would be assessed based on the following principles:
Fairness - (1) the individual learner’s needs are considered in the assessment process, (2) where appropriate, reasonable

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adjustments are applied by the RTO to take into account the individual leaner’s needs and, (3) the RTO informs
the leaner about the assessment process, and provides the learner with the opportunity to challenge the result
of the assessment and be reassessed if necessary.
Flexibility – assessment is flexible to the individual learner by; (1) reflecting the learner’s needs, (2) assessing competencies
held by the learner no matter how or where they have been acquired and, (3) the unit of competency and
associated assessment requirements, and the individual.
Validity – (1) requires that assessment against the unit/s of competency and the associated assessment requirements
covers the broad range of skills and knowledge, (2) assessment of knowledge and skills is integrated with their
practical application, (3) assessment to be based on evidence that demonstrates tat a leaner could
demonstrate these skills and knowledge in other similar situations and, (4) judgement of competence is based
on evidence of learner performance that is aligned to the unit/s of competency and associated assessment
requirements.
Reliability – evidence presented for assessment is consistently interpreted and assessment results are comparable
irrespective of the assessor conducting the assessment
Rules of Evidence
Validity – the assessor is assured that the learner has the skills, knowledge and attributes, as described in the module
of unit of competency and associated assessment requirements.
Sufficiency – the assessor is assured that the quality, quantity and relevance of the assessment evidence enables a
judgement to be made of a learner’s competency.
Authenticity – the assessor is assured that the evidence presented for assessment is the learner’s own work. This would
mean that any form of plagiarism or copying of other’s work may not be permitted and would be deemed
strictly as a ‘Not Yet Competent’ grading.
Currency – the assessor is assured that the assessment evidence demonstrates current competency. This requires the
assessment evidence to be from the present or the very recent past.
Resources required for this Assessment
 All documents must be created using Microsoft Office suites i.e., MS Word, Excel, PowerPoint
 Upon completion, submit the assessment via the student learning management system to your trainer along with the
completed assessment coversheet.
 Refer the notes on eLearning to answer the tasks
 Any additional material will be provided by Trainer
Instructions for Students
Please read the following instructions carefully
 This assessment is to be completed according to the instructions given by your assessor.
 Students are allowed to take this assessment home.
 Feedback on each task will be provided to enable you to determine how your work could be improved. You will be
provided with feedback on your work within 2 weeks of the assessment due date.
 Should you not answer the questions correctly, you will be given feedback on the results and your gaps in knowledge.
You will be given another opportunity to demonstrate your knowledge and skills to be deemed competent for this unit
of competency.
 If you are not sure about any aspect of this assessment, please ask for clarification from your assessor.

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 Please refer to the College re-assessment and re-enrolment policy for more information.
Prepare your report for the Board, covering the following matters:
a) Discuss the directors’ concerns about the amount of resources being allocated to the
monitoring process.
b) Outline the objectives of an audit committee.
c) Recommend terms of reference for the committee.
d) Identify who should constitute the committee.
e) Discuss the interaction between the audit committee and both the internal and external audit
functions.
Introduction:
In this report, many factors will be discussed in respect of the audit committee that has
to be established within the company. Hence, the way it communicates with the internal
auditor and the external auditor will be discussed too.
Concerns of the Director about the allocation of resources to the monitoring process:
The directors are concerned in respect of allocation resources to the monitoring processes
because of the fact that no tangible benefit is generally not visible from these processes.
The company has to invest every year a lot of money and time in respect of development
of the monitoring processes within the company (Abernathy et al., 2014). It comprises of
various internal control processes that involve both revenue and capital expenditure. It
has to be made very clear to the management that the investment in the monitoring
processes is essential for the efficiency of the other operations of the business. In absence
of it, the company will not be able to create value for the shareholders.
Objectives of the Audit committee:
The primary objective of audit committee is as follows:
a) The committee is sole responsible for the communication with the internal auditors. In
addition to this, its objective remains to communicate openly with the independent
accountants, the management of the company and the Board of Directors of the
company.
b) The committee is responsible for establishing procedures in respect of a) the receipt,
retention and the method of treatment of the complaints that had been received by the
company in respect of its accounting, internal accounting controls or the matters
concerning the audit, b) the confidential matters that are being submitted by the
employees of the company regarding the matters of accounting policies and the auditing
procedures of the company (Bryce et al., 2015).