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Auditing, Assurance & Services ACC707 Assignment

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ACC707 Auditing, Assurance & Services (ACC707)

   

Added on  2020-02-23

Auditing, Assurance & Services ACC707 Assignment

   

ACC707 Auditing, Assurance & Services (ACC707)

   Added on 2020-02-23

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Running head: AUDITING & ASSURANCE SERVICESTitle: Auditing & Assurance ServicesUniversity Name:Student Name:Authors’ Note
Auditing, Assurance & Services ACC707 Assignment_1
1AUDITING & ASSURANCE SERVICESExecutive Summary: The current study critically assesses issues of auditing surrounding the collapse of the businessconcern ABC Learning. This helps in comprehending the issues and helps in learning lessonsthat might help in identifying the gaps in auditing. Moving further, this leads to the developmentof new standard of auditing ASA 701 that if were applied before could have averted the collapseof the firm. In addition to this, this study also helps in gaining deep understanding regardinganalysis as well as usefulness of the auditing standard ASA 701.
Auditing, Assurance & Services ACC707 Assignment_2
2AUDITING & ASSURANCE SERVICESTable of ContentsIntroduction......................................................................................................................................3Analysis of the collapse of the ABC Learning Centre....................................................................3Study of the background of the collapse..........................................................................................3Accounting and Auditing Issues Recognized..................................................................................4Reports Presenting Audit Failures that surround the collapse of ABC Learning Centre................5Issues that led to the development of the new auditing standard ASA701.....................................5Evaluation of the usefulness of ASA 701........................................................................................6Conclusion.......................................................................................................................................7Recommendation.............................................................................................................................8References........................................................................................................................................9
Auditing, Assurance & Services ACC707 Assignment_3
3AUDITING & ASSURANCE SERVICESIntroduction The AUASB issued the auditing standard ASA 701 that shows the level of commitment toconformity with the current enhancements and modifications to audit reporting designed by theInternational Auditing and Assurance Standards Board. This study helps in understanding thatauditing standard takes account of authorizing the communication of KAM in the reports of theassessor and enables auditors of other business units to decide whether to take in KAM in thereport of the assessor. Furthermore, this study helps in analytically gaining understanding asregards auditing issues surrounding the collapse of the firm ABC Learning Centre. In addition tothis, this study also carries out a detailed analysis of the issues related to the development ofnovel accounting standard ASA 701 Communicating Important Audit Matters in the IndependentAuditor’s Report. Consequently, important audit materials are required in the audit report todifferent members of ABC Learning Centre. Moving further, the study helps in analysis ofaccounting standard ASA 701. Analysis of the collapse of the ABC Learning CentreStudy of the background of the collapseAnalysis of reports on collapse of the firm ABC Learning Centre reveals the fact that the externalassessors of the firm ABC that is the Pitcher Partners delivered unqualified opinions since theappointment during the year 2003. Nevertheless, after the appointed auditor left during 2007,new assessors Ernst & Young presented a very diverse opinion regarding the profits of the firmformerly mentioned by the management of the firm in the account statements. In addition to this,the board also called KPMG as a third party in a bid to settle the variances between the twodifferent assessors. Detailed study of the operations of ABC Learning reveals that ABC was co-established as achildcare unit by Edmund Grooves and his wife. Previously, childcare units in Australia wereprimarily not-for-profit organizations backed by government subsidies. However, during 1996,management of ABC operated around 18 care units and became a chief player in privatechildcare segment in Australia. During this period, the Australian government arrived at thedecision to provide the subsidy directly to the families that in turn generated potential for higherrate of growth. Consequently, ABC seized the golden opportunity and arrived at decisions ofexpansion by acquirement of properties in different prime locations and purchasing outindividual daycare centre with smaller childcare units. During the year 1999, the companyowned 30 units. Again, during the year 2001, ABC got listed in the Australian Stock Exchange,providing it the opportunity of attainment of further growth in capital. However, the companyattained growth at an exponential rate after undergoing the process of listing, along with thecorporation nearly doubling the entire operations every year (William Jr et al. 2016). As such, by
Auditing, Assurance & Services ACC707 Assignment_4

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