Development of an Audit Program for a Publicly LISted Company Executive SUMMARY

DEVELOPING AN
AUDIT PROGRAM
FOR A PUBLICLY
LISTED COMPANY

EXECUTIVE SUMMARY
This report summarises the nuances related to the formulation of an Audit Program and
how it helps in the creation of a favourable opinion on the part of auditor in regards to the
financial statements of the enterprise for a particular accounting period. An Audit Program can
be defined as the comprehensive strategy which clearly outlines the work steps that would be
taken up by an auditor, either internal or external, in order to verify the authenticity of various
material account balances. This report focuses upon the auditing of the financial statements of
Mako Gold Limited which is an Australian listed company operational predominantly in under-
explored terrains of West Africa. The company is based out of Brisbane, Queensland and deals
in the exploration as well as production of high grade gold deposits to benefit its stakeholders.
Application of Audit Risk Model [AR= f(IR, CR, DR)] indicates that both Inherent and Control
Risks are high for Mako Gold. As a result, its risk rating is high. Furthermore, ten material
account balances have been identified such as Trade Receivables/Payables, Exploration and
Evaluation Assets, Cash & Cash Equivalents, Shareholder's Equity, Unsecured Borrowings and
Provisions for the period ranging from 2016 to 2019. Based on these, audit work program has
been formulated through assertions identified along with the representation of sampling plan
with audit sample size regarding each of the account balances.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................1
DEVELOPMENT OF AUDIT PROGRAM FOR MAKO GOLD LIMITED................................1
Industry and Company Overview................................................................................................1
Identification of Key Business Risks...........................................................................................1
Audit Risk Model.........................................................................................................................2
Analytical Procedures for Statements of Financial Position and Performance...........................4
Material Account Balance Identification.....................................................................................6
Ten Material Account Balances selected for Audit Purpose.......................................................6
Assertions Identified....................................................................................................................7
Audit Program..............................................................................................................................8
Sampling Plan for each Material Account Balance...................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Audit Planning is one of the most crucial steps that is undertaken by an organisation.
Under an Audit Plan, a general strategy is formulated that describes all the steps and procedures
which an auditor would take in order to determine that whether or not the company is in
conformance with the compliance regulations (BOTEZ, 2015). This report aims to provide the
development of an audit program for a publicly listed company named Mako Gold Limited. It is
an ASX-listed exploration company which is concerned with the discovery and production of
gold deposits in West Africa. The given report provides a detailed account on substantive test of
balances and controls, audit procedures as well as assertions related to account balances among
others. This is mainly done through the identification of key risks and sampling plans for each
material balance in relation to the depiction of misstatements with supporting evidences.
DEVELOPMENT OF AUDIT PROGRAM FOR MAKO GOLD LIMITED
Industry and Company Overview
The Australian Mining industry is considered to be one of the most well-established
sectors of the economy, accounting for 7% of its total GDP. Due to recent elevation in gold
prices, there has been an increased focus upon the exploration and production of gold in recent
years. Mako Gold Limited (ASX:MKG) is a public company belonging to the Metal and Mining
Industry of Australia. It was established in June 2015 and is based out of Brisbane, Queensland.
Its mission is to explore and rapidly advance large high-grade gold deposit properties,
specifically in under-explored terrains of Cote d'lvoire, Burkina Faso and other such areas of
West Africa in order to provide substantial wealth maximisation to its stakeholders. The
company has discovered 400 million ounces of gold till date. Currently, it has two prospective
projects ongoing in Africa named the Napie and Niou Projects which are located in Cote d'lvoire
and Burkin Faso respectively. Apart from this, the business reported a strong financial position
with a cash balance of $4.5 million on June 30, 2018.
Identification of Key Business Risks
There are a variety of business risks which can be faced by an organisation. In the context
of a mining business, such risks may relate to resource replacement, rising costs, fraud and
disruption among others (Christensen and et.al., 2016). For Mako Gold Limited, its lead auditor,
BDO Audit Ply Ltd., identifies the key business risks which are largely related to use of financial
1