ONLY NEED ANSWERS FOR THIS SHEET

+ with smaller truc pie anal D BE SEEN When JWCA lendered for at ABG wark Lind odpruer where extensive to experiode Wes to be the ceview Bever, he red kulter surgul din of May 2029. Helalu ke part in work per le we coration des JOHNSON & WANG CHARTERED ACOUNTANTS ViLALU. W ia u Charen Arvad (CA) Aulil Easyonal Retard Brisbane Card Aerosason & Wars Chartered Accorrons (TWCAX "The fee was estatal feyers gely Vicu. Wung and Pele: Jusco basi lincueil Tesis will advices in liron Thorn bus prisad gather aver the wife yours Whamed Some wlid andsisalla..ships with any business scially in the sett industry and is Working hard STES. ILS SENEST Lord Cregante cach yer. The hon isales providing increased ar- wil serviss uns, si servica, baada precipiul I ile uli club. The Guam ve peter-los in dit wir uztion Toren and then rein brshes process improvemen |Leag), TIN IPyrd, a (W'ue tu Maryl as regineral company ulla mani: Cutetius Arte ANXIT ...... JWC4 stricat mindenke the dit af Anderen Bridgin (4 Sar 20 pattern als dit Wey lave de reclamace of visning i jeb Lilusday 14 May 2020, Vascola jouter le at Water fra Pandit of AHG Vertis TATA disconning www wilclut le codi derlike i da diligence before seeing loep ABG di and ringi milwr Working with loncat dit will be Varalimpo Sorin Andong Swimmediato und Codin Menas (Graune Auli Nalali Tha plena le pallially wurking cele AHG tartizan, asement is reaca in wrich the neades GENER Nature how usred to It 2 year is carried div biustika 2 year in the wisi Ihrer QUEENSLAND UNIVERSITY OF TECHNOLOGY QUT Business School - School of Accountancy AYB301 Audit and Assurance Semester 2, 2020 GROUP PROJECT: AUDIT ETHICS ASSESSMENT INFORMATION Weighing Tabul-20) Si do 20 post, 203611.pen "Ta prepare and afandt wurk papers & war heute an auditor at where Wargurra Arenig (AIS) with a decision of the 2000 and wer for de Building Group ABG. You will wekil your guy of four stacks on this listi MILES MAY Awani dun maalituma makowe 1. Cerite the work or provided in the desilitinginap (1) - 2. Subener the compted scaline ar Crear Project Submissie Ink Skikbaard (w pally I saw in of the inimiriam ML THENITHTHSrnius hints 1. Lidertakes larmer The will seni teated on the cakes. Se har gespreng Compted Adi Wekipger Cuquited Track parandaliek Team Cui ad Meting Minus Work Pen 1990) radial brand whether that fara Tips Avent HarulrTHRN Imprid E. WCs the line the year wat perse from here at one of Le redactierooring consiMelbounce lig is excited to be part of ABG dit stehas previously wurke will ABG bland fr3 to belieji JWCA. legibug khus with friend at ABG during the and peacess. Caitli has just been promoted to godere adoras ste lys TEEztyfirsta tar under det sker i senting the teen vreking with JWCA 23 Endergraduate for the las yer and tested eristeen share her porcione will be supervised by Irid. timerplade ( Individual Tak AIK is an imeyniss herite cenites grup whs greitas in being and raisin eri ATTES Australia. The ELDARY Speisialta dil of plastic properties were red by crents rach citer, fire and impact. All Righcare intretes, depreciation www.di Qute yeu el Jue 30.2021 wewe 525M is renderemus loci cu w 5:55M. The winterdada Wendemes IP20 Ali's pacul General Mang (SM) u Tuesday 12 Mey 2030 Bud Visceralisili di vita wahile Child Exuliv:OLICEOL ABG Lid. Makes 18 Wwy 2003 and have provided you with Deir eitis in no ting friends yex eaded Juss, 2020 This vided in ABG PAwiFle-ACXL. Clical Mecling Worksheet assist. Ako prides that questions heen corpored y Anuragantard fie ABG wait in late to AHG frans. This site and perpisa ACO trenito All Print Leaglia Viltu. Wale greed to be sll Pulls (AEP) for Gudalux FY2120 Suits allri legal and cherrew Samorars the IWC E Ek hoor te lusiti. Velis ligula la comidale cier expense i ugradi directe ml Vinsent hus triana ing pady, her he experience wwers a Timer lang WIELY litischer une Th: ABG uredite prie sudil fram valudos 2 years of star AIK up for print me. Iier misit weernteted by a maritti fim video collow via Lecali co dal canal of fata's Seti puter and a digantiperrent of new regardink in the I'Y 2014 di Vincere was all of this directe ale s lede is dat we des de lade s uced and wat by the THAN I IN Intimin uriy: R.3. Pricainedy CERESD and lowlode was in writer SD wherb ard-amb 12 Admin w wywier THIEFTER lewek ses Dental gul kuidas lelicity especie di psin coulig Lali BELEID As the rescis CATETE Habe merr shokories are the one another stakete calok, a ville de la popular as calmak ve OUT LE Puliy. Hunter PATE be frorail| wwwtades al 'DEIRA STIL The MCX Blicy naine klai Aunat und IKETCHER om han W.TELE AT DET PERMANENTIILE INFORMATION Palcatis New Client - Audio Building G LWBG) Antering Corp willet licht tegrated in Twins in un restriana Auc. Warcra facilize and parts with all Turengtame alorian Stray Meher, Trilindrom. There is a hune warcher lasilay u. Geburg und Herd Oficin. Milieud is a vlaze da Clic Execali Ollier CEO. Mark Bilds the organisation The CEO basted this company for 15 years. He started his career is la tulka wille 3G mri wakel Lis why up to de CEO. E cu sosiaal: www. rolification and area MILA s istis kawierig in itoning of company asiguin im In the arly age of the Holyur, Alliwapong will add arraneat eating and Bruwerk uisuse. The business lig is daar of 2320 vleu Curid-19 Fariz Auchan CERC. The main that my Alkicsiding mojarser delayed lux 1-2 years and libis fulu pjes nespus ABG cm poilices will arts with resta de marilayotte 'The AHG srce tea mis of filtrerad ceral styl any of watere be working will ABG se lle pas eu (IDs yeus The Board of Deduced by Jo Dis vuis 220-23 live Jirrelet wie sieties experience in the building & Consultinto try the fourther tordnienibers have madecperience in & strani in 2014 mahansa CPA Tier Hanjari Sacra is the audit rape x JWC4. whes erang sochnical electe vas a high achieve in de xul CA) will. Give years old. capezielt. Bet Slagales JWCA and satural nail artarry this stud. He is vell aware that is onder spures to l'artet Level vilais de lim, ac ceis e des te blity to dluger and clicals we all wollen qasificandit expeneraler bagerst be the martuarse of th: ANG IY licis exted to be part of ite od to extend is constructie cudir experience. He clearly is the coding IL A Trular Endspissard he ndertaken the site for the but three yere bus fillesla E : L ,util it is Cree the Alt si in care balie Mary JWCA card Auli'tc) will peer review the Julia boss lave some pier experience walculis of conscioli, le esperience w werken Aaa! Ar-Trent AdSense 2, 2120 -- Page! AOO! A r2 Arn- Art: Gros Presse 2, 2000 4 ANA SAAT 2.aprired Sad, 2120 Page! information in the client meeting notes and case information. Make recommendations to the AEP and then summarise up to be part of AE1.2 Client Evaluation workpaper (Evaluation of ABG Mgi) ASSESSMENT TASK (20%) 1. Complete ABG Permanent Audit File - Audit Engagement Work Papers (15%) (Work papers AET, AE 1.1 and AE1.2) 2. Complete Teamwork Papers (5%) (Work papers TW1.1 to TW1.4) TWI.1 Team Contract - complete the contract and set out the team agreement on team expectations on the contract. Each team member needs to add their signature electronically to the completed document. Complete the following Audit Engagement Work Papers for Anderson Building Group Ltd (ABG) for year ended 30 June 2020 to assist with the ABG audit engagement decision. TW1.2-1.4 Team Meeting Minutes - record your meeting processes for each of your team meetings (at least three in total) on these minutes to demonstrate you have met together and discussed the assignment. These can be physical or electronic meetings but must contain clear and explicit details of what occurred at the meetings. You can add extra meeting minutes if you all agree Work Papers to be completed: Abl Engagemewi Evaluation Work Paper AEII Engagement Ethic legal Worksheet AEI.2 Client Evalvation Work Paper (Ewol of ABG Mgi) AEI.2.1 Fraud Evaluation TW1.1 Team Contract TW7.2-7W14 Team Meeting Minules Groups are also encouraged to complete a peer assessment on their team (formative assessment to provide comments on how their group's processes have been functioning in Assignment 1 and to raise any issues or concerns. Information provided to Assist: ACM1.1- Client Meeting Worksheet. ACQ1.2 - Chet Fraud Questionnaire Responses This Assessment Information Sheet The criteria sheet for the assessment task You will need to reference: APES110 (Choose the effective from 1 January 2020 version) See https://www.apesb.org aw/page.php?id=12 The Corporations Act (2001) (link under Learning Resources on Blackboard) Details of the requirements for each work paper/worksheet AEI- Engagement Evaluation Work Paper (Lead Schedule) - to report your summary findings to the Audit Engagement Partner about key ethical, legal and client evaluation issues and provide a conclusson about what needs to accur for Johnson & Wang Chartered Accountants (JWCA) to undertake the 2020 audit of ABG. This schedule brings together all the important issues from AE 1.1 and AE1.2 AE1.1 - Engagement Ethical..egal Issues Worksheet (supporting schedule) - to critically analyse the key ethical and legal issues associated with JWCA accepting the ABG Audit and make recommendations for howlif these issues can be resolved. AE1.2 - Client Evaluation Work Paper (Evaluation of ABG My!) (supporting schedule) - to critically evaluate key client issues (management integrity issues and other special risks including fraud risks) which may impact on JWCA offering to undertake the ABG audit and accepting the ABG audit engagement AE1.2.1 - Fraud Evaluation (supporting schedule to AE1.2) - to critically evaluate the fraud risks associated with the audit of ABG by considering the fraud questionnaire responses and other AYB:201 Audit & Assurance - Assessment 1: Group Project- Audit Ethics Semester 2, 2020 Page 14 AVR301 Audit & Assurance - Assessment 1: Group Proglect- Audit Ethics Semester 2, 2020 Page 15 KI A B D G 1 CLIENT MEETING NOTES Anderson 2 Client Name Building Group Preparer Benjamin Smithers J&W Chartered 3 Engagement Title ABG Date Prepared 18.5.20 4 Period 30.6.20 Reviewer Vincent Wang Accountants 5 Work Paper ACM1.1 Date Reviewed 20.5.20 6 WORKPAPER First client meeting to discuss 2020 Audit between Vincent Wang and Benjamin Smithers and ABG CEO (18.5.20) 7 OBJECTIVE(S) Ben has heard rumours in the industry that four staff were dismissed due to fraudulent and dishonest behaviour. Ben and Vincent ask the ABG CEO about this issue at the meeting. The CEO indicates that yes four staff were dismissed but that is it was due to reduced work on projects and their jobs were made redundant. 8 The Directors Remuneration Package Report presented to the previous Annual General Meeting (AGM) advised shareholders that directors would be paid $50,000 and the Chair $80,000 for the year to June 30, 2020. Shareholders had agreed to this package but the CEO advised that at the recent Special General Meeting, this issue was raised because the Chair mentioned that there was an increased expectation on directors time in response to increased activities due to Covid-19. The Chair propsed that the director's packages be revised to $70,000 for directors and 9 $100,000 for the Chair. The Shareholders had not been happy with this increase. The management letter from the previous audit firm for the FY2019 audit, identified weaknesses in quoting of jobs at the Townsville and Darwin locations and discrepancies in inventory controls particularly in relation to offcuts. There was possible fraudlent activity in relation to offcuts but all staffin Townsville have since left the company and the Darwin office has new staff. Notes in the management letter, indicate that there are serious control risks between the quotation and delivery of goods and services by ABG with poor internal controls around inventory, lack of segregation of duties and authorisation weaknesses compromising the debt covenant arrangements with the bank. 10 Your initial review of the financial statements for ABG confirm a good first half year and a significantly reduced (compared to budget) second half. Covid-19 has impacted the revenue and all capital projects have been suspended other than those where there are workplace health and safety compliances required e.g. in the Darwin office, there was a fire in one timber yard in October 2019 and inventory had to be rehoused in sheds in a different geographical location (in Darwin). 11 The CEO commented that he was happy to have the new auditors on board. He said that JWCA offered a much cheaper alternative than other tenderers and the previous auditor. Also, he commented that JWCA had a younger team noting that Ingrid was already known to many accounting staff as she had been on a 3 month contract in September to December 2019 when the previous auditors were finishing the FY2019 audit. 12 ACM1.1 Client Meeting Notes ACQ1.2 Fraud Questionnaire AE1-Engagement Evaluation WP AE1.1-Eng LO A B D F 1 CLIENT FRAUD QUESTIONNAIRE RESPONSES Anderson 2 Client Name Building Group Preparer Benjamin Smithers 3 Engagement Title J&W Chartered ABG Date Prepared 18.11.20 4 Period 30.6.20 Reviewer Vincent Wang Accountants 5 Work Paper ACM1.1 Date Reviewed 20.5.20 6 WORKPAPER Fraud Questionnaire and Answers provided by Management & Audit Committee (AC) 7 OBJECTIVE(S) Fraud Questions ABG Management Responses ABG Audit Committee (AC)Responses 8 Do you have any knowledge of any fraud We were notified by the Bank that some receipts We are not aware of any material perpetrated, alleged or suspected that for ABG were diverted to a different BSB and misstatements in the entity's financial could result in a material misstatement of Account number. statements the entity's financial statements? 9 No knowledge Do you have any knowledge of any other perpetrated, alleged or suspected fraud (regardless of value)? We understand but were not advised directly by management or internal audit that four staff (from the Brisbane warehouse) were dismissed for alleged fraud but no further criminal action was taken. Someone external to the organisation advised one of the directors on the audit committee they had heard a rumour about the incident. 10 No knowledge Have you received any communications from employees, former employees or others concerning allegations of fraud? An internal audit report suggested there was a suspected case in the Townsville office where staff were undertaking fraudulent activities in relation to selling of offcuts and with Covid-19, they were stood down and have since been terminated. 11 What incentives and pressures do you Chief Risk Officer (CRO) is part of the Chief A strategic risk register is operationally updated perceive to be on management and how Operating Officer's (COO) position. Ongoing by the staff and presented to the Audit are the related fraud risks managed? assessment of risks is in each person's job Committee (AC) at its quarterly meeting (with description. This is also a quarterly standing item the Coo/CRO in attendance). The AC reports to on the Audit Committee and the full board the Board meetings highlighting any areas of ACM1.1 Client Meeting Notes ACQ1.2 Fraud Questionnaire AE1-Engagement Evaluation WP AE1.1-Eng B C D E F F G H 1 Audit Engagement Evaluation Workpaper - Lead Schedule 2 Client Name Anderson Building Group Preparer 3 Engagement Title ABG Date Prepared 4 Period 30.6.20 Reviewer J&W Chartered Accountants 5 Work Paper AE1 Date Reviewed 6 WORKPAPER 7 OBJECTIVE(S) Summarise the key recommendations to the audit engagement partner (AEP) in relation to the acceptance of the ABG audit. 8 9 SUMMARY OF KEY ETHICAL &LEGAL ISSUES 10 1 11 2 12 3 13 4 14 5 15 16 SUMMARY OF KEY CLIENT EVALUATION ISSUES 17 1 18 2 19 3 20 4 21 5 1 22 23 KEY RECOMMENDATIONS TO ENGAGEMENT PARTNER 24 25 2 26 3 27 4 28 5 29 30 CONCLUSION - AUDIT ACCEPTANCE DECISION ACM1.1 Client Meeting Notes ACQ1.2 Fraud Questionnaire AE1-Engagement Evaluation WP AE1.1-Engagement Ethic_Legal WS AE + with smaller truc pie anal D BE SEEN When JWCA lendered for at ABG wark Lind odpruer where extensive to experiode Wes to be the ceview Bever, he red kulter surgul din of May 2029. Helalu ke part in work per le we coration des JOHNSON & WANG CHARTERED ACOUNTANTS ViLALU. W ia u Charen Arvad (CA) Aulil Easyonal Retard Brisbane Card Aerosason & Wars Chartered Accorrons (TWCAX "The fee was estatal feyers gely Vicu. Wung and Pele: Jusco basi lincueil Tesis will advices in liron Thorn bus prisad gather aver the wife yours Whamed Some wlid andsisalla..ships with any business scially in the sett industry and is Working hard STES. ILS SENEST Lord Cregante cach yer. The hon isales providing increased ar- wil serviss uns, si servica, baada precipiul I ile uli club. The Guam ve peter-los in dit wir uztion Toren and then rein brshes process improvemen |Leag), TIN IPyrd, a (W'ue tu Maryl as regineral company ulla mani: Cutetius Arte ANXIT ...... JWC4 stricat mindenke the dit af Anderen Bridgin (4 Sar 20 pattern als dit Wey lave de reclamace of visning i jeb Lilusday 14 May 2020, Vascola jouter le at Water fra Pandit of AHG Vertis TATA disconning www wilclut le codi derlike i da diligence before seeing loep ABG di and ringi milwr Working with loncat dit will be Varalimpo Sorin Andong Swimmediato und Codin Menas (Graune Auli Nalali Tha plena le pallially wurking cele AHG tartizan, asement is reaca in wrich the neades GENER Nature how usred to It 2 year is carried div biustika 2 year in the wisi Ihrer QUEENSLAND UNIVERSITY OF TECHNOLOGY QUT Business School - School of Accountancy AYB301 Audit and Assurance Semester 2, 2020 GROUP PROJECT: AUDIT ETHICS ASSESSMENT INFORMATION Weighing Tabul-20) Si do 20 post, 203611.pen "Ta prepare and afandt wurk papers & war heute an auditor at where Wargurra Arenig (AIS) with a decision of the 2000 and wer for de Building Group ABG. You will wekil your guy of four stacks on this listi MILES MAY Awani dun maalituma makowe 1. Cerite the work or provided in the desilitinginap (1) - 2. Subener the compted scaline ar Crear Project Submissie Ink Skikbaard (w pally I saw in of the inimiriam ML THENITHTHSrnius hints 1. Lidertakes larmer The will seni teated on the cakes. Se har gespreng Compted Adi Wekipger Cuquited Track parandaliek Team Cui ad Meting Minus Work Pen 1990) radial brand whether that fara Tips Avent HarulrTHRN Imprid E. WCs the line the year wat perse from here at one of Le redactierooring consiMelbounce lig is excited to be part of ABG dit stehas previously wurke will ABG bland fr3 to belieji JWCA. legibug khus with friend at ABG during the and peacess. Caitli has just been promoted to godere adoras ste lys TEEztyfirsta tar under det sker i senting the teen vreking with JWCA 23 Endergraduate for the las yer and tested eristeen share her porcione will be supervised by Irid. timerplade ( Individual Tak AIK is an imeyniss herite cenites grup whs greitas in being and raisin eri ATTES Australia. The ELDARY Speisialta dil of plastic properties were red by crents rach citer, fire and impact. All Righcare intretes, depreciation www.di Qute yeu el Jue 30.2021 wewe 525M is renderemus loci cu w 5:55M. The winterdada Wendemes IP20 Ali's pacul General Mang (SM) u Tuesday 12 Mey 2030 Bud Visceralisili di vita wahile Child Exuliv:OLICEOL ABG Lid. Makes 18 Wwy 2003 and have provided you with Deir eitis in no ting friends yex eaded Juss, 2020 This vided in ABG PAwiFle-ACXL. Clical Mecling Worksheet assist. Ako prides that questions heen corpored y Anuragantard fie ABG wait in late to AHG frans. This site and perpisa ACO trenito All Print Leaglia Viltu. Wale greed to be sll Pulls (AEP) for Gudalux FY2120 Suits allri legal and cherrew Samorars the IWC E Ek hoor te lusiti. Velis ligula la comidale cier expense i ugradi directe ml Vinsent hus triana ing pady, her he experience wwers a Timer lang WIELY litischer une Th: ABG uredite prie sudil fram valudos 2 years of star AIK up for print me. Iier misit weernteted by a maritti fim video collow via Lecali co dal canal of fata's Seti puter and a digantiperrent of new regardink in the I'Y 2014 di Vincere was all of this directe ale s lede is dat we des de lade s uced and wat by the THAN I IN Intimin uriy: R.3. Pricainedy CERESD and lowlode was in writer SD wherb ard-amb 12 Admin w wywier THIEFTER lewek ses Dental gul kuidas lelicity especie di psin coulig Lali BELEID As the rescis CATETE Habe merr shokories are the one another stakete calok, a ville de la popular as calmak ve OUT LE Puliy. Hunter PATE be frorail| wwwtades al 'DEIRA STIL The MCX Blicy naine klai Aunat und IKETCHER om han W.TELE AT DET PERMANENTIILE INFORMATION Palcatis New Client - Audio Building G LWBG) Antering Corp willet licht tegrated in Twins in un restriana Auc. Warcra facilize and parts with all Turengtame alorian Stray Meher, Trilindrom. There is a hune warcher lasilay u. Geburg und Herd Oficin. Milieud is a vlaze da Clic Execali Ollier CEO. Mark Bilds the organisation The CEO basted this company for 15 years. He started his career is la tulka wille 3G mri wakel Lis why up to de CEO. E cu sosiaal: www. rolification and area MILA s istis kawierig in itoning of company asiguin im In the arly age of the Holyur, Alliwapong will add arraneat eating and Bruwerk uisuse. The business lig is daar of 2320 vleu Curid-19 Fariz Auchan CERC. The main that my Alkicsiding mojarser delayed lux 1-2 years and libis fulu pjes nespus ABG cm poilices will arts with resta de marilayotte 'The AHG srce tea mis of filtrerad ceral styl any of watere be working will ABG se lle pas eu (IDs yeus The Board of Deduced by Jo Dis vuis 220-23 live Jirrelet wie sieties experience in the building & Consultinto try the fourther tordnienibers have madecperience in & strani in 2014 mahansa CPA Tier Hanjari Sacra is the audit rape x JWC4. whes erang sochnical electe vas a high achieve in de xul CA) will. Give years old. capezielt. Bet Slagales JWCA and satural nail artarry this stud. He is vell aware that is onder spures to l'artet Level vilais de lim, ac ceis e des te blity to dluger and clicals we all wollen qasificandit expeneraler bagerst be the martuarse of th: ANG IY licis exted to be part of ite od to extend is constructie cudir experience. He clearly is the coding IL A Trular Endspissard he ndertaken the site for the but three yere bus fillesla E : L ,util it is Cree the Alt si in care balie Mary JWCA card Auli'tc) will peer review the Julia boss lave some pier experience walculis of conscioli, le esperience w werken Aaa! Ar-Trent AdSense 2, 2120 -- Page! AOO! A r2 Arn- Art: Gros Presse 2, 2000 4 ANA SAAT 2.aprired Sad, 2120 Page! information in the client meeting notes and case information. Make recommendations to the AEP and then summarise up to be part of AE1.2 Client Evaluation workpaper (Evaluation of ABG Mgi) ASSESSMENT TASK (20%) 1. Complete ABG Permanent Audit File - Audit Engagement Work Papers (15%) (Work papers AET, AE 1.1 and AE1.2) 2. Complete Teamwork Papers (5%) (Work papers TW1.1 to TW1.4) TWI.1 Team Contract - complete the contract and set out the team agreement on team expectations on the contract. Each team member needs to add their signature electronically to the completed document. Complete the following Audit Engagement Work Papers for Anderson Building Group Ltd (ABG) for year ended 30 June 2020 to assist with the ABG audit engagement decision. TW1.2-1.4 Team Meeting Minutes - record your meeting processes for each of your team meetings (at least three in total) on these minutes to demonstrate you have met together and discussed the assignment. These can be physical or electronic meetings but must contain clear and explicit details of what occurred at the meetings. You can add extra meeting minutes if you all agree Work Papers to be completed: Abl Engagemewi Evaluation Work Paper AEII Engagement Ethic legal Worksheet AEI.2 Client Evalvation Work Paper (Ewol of ABG Mgi) AEI.2.1 Fraud Evaluation TW1.1 Team Contract TW7.2-7W14 Team Meeting Minules Groups are also encouraged to complete a peer assessment on their team (formative assessment to provide comments on how their group's processes have been functioning in Assignment 1 and to raise any issues or concerns. Information provided to Assist: ACM1.1- Client Meeting Worksheet. ACQ1.2 - Chet Fraud Questionnaire Responses This Assessment Information Sheet The criteria sheet for the assessment task You will need to reference: APES110 (Choose the effective from 1 January 2020 version) See https://www.apesb.org aw/page.php?id=12 The Corporations Act (2001) (link under Learning Resources on Blackboard) Details of the requirements for each work paper/worksheet AEI- Engagement Evaluation Work Paper (Lead Schedule) - to report your summary findings to the Audit Engagement Partner about key ethical, legal and client evaluation issues and provide a conclusson about what needs to accur for Johnson & Wang Chartered Accountants (JWCA) to undertake the 2020 audit of ABG. This schedule brings together all the important issues from AE 1.1 and AE1.2 AE1.1 - Engagement Ethical..egal Issues Worksheet (supporting schedule) - to critically analyse the key ethical and legal issues associated with JWCA accepting the ABG Audit and make recommendations for howlif these issues can be resolved. AE1.2 - Client Evaluation Work Paper (Evaluation of ABG My!) (supporting schedule) - to critically evaluate key client issues (management integrity issues and other special risks including fraud risks) which may impact on JWCA offering to undertake the ABG audit and accepting the ABG audit engagement AE1.2.1 - Fraud Evaluation (supporting schedule to AE1.2) - to critically evaluate the fraud risks associated with the audit of ABG by considering the fraud questionnaire responses and other AYB:201 Audit & Assurance - Assessment 1: Group Project- Audit Ethics Semester 2, 2020 Page 14 AVR301 Audit & Assurance - Assessment 1: Group Proglect- Audit Ethics Semester 2, 2020 Page 15 KI A B D G 1 CLIENT MEETING NOTES Anderson 2 Client Name Building Group Preparer Benjamin Smithers J&W Chartered 3 Engagement Title ABG Date Prepared 18.5.20 4 Period 30.6.20 Reviewer Vincent Wang Accountants 5 Work Paper ACM1.1 Date Reviewed 20.5.20 6 WORKPAPER First client meeting to discuss 2020 Audit between Vincent Wang and Benjamin Smithers and ABG CEO (18.5.20) 7 OBJECTIVE(S) Ben has heard rumours in the industry that four staff were dismissed due to fraudulent and dishonest behaviour. Ben and Vincent ask the ABG CEO about this issue at the meeting. The CEO indicates that yes four staff were dismissed but that is it was due to reduced work on projects and their jobs were made redundant. 8 The Directors Remuneration Package Report presented to the previous Annual General Meeting (AGM) advised shareholders that directors would be paid $50,000 and the Chair $80,000 for the year to June 30, 2020. Shareholders had agreed to this package but the CEO advised that at the recent Special General Meeting, this issue was raised because the Chair mentioned that there was an increased expectation on directors time in response to increased activities due to Covid-19. The Chair propsed that the director's packages be revised to $70,000 for directors and 9 $100,000 for the Chair. The Shareholders had not been happy with this increase. The management letter from the previous audit firm for the FY2019 audit, identified weaknesses in quoting of jobs at the Townsville and Darwin locations and discrepancies in inventory controls particularly in relation to offcuts. There was possible fraudlent activity in relation to offcuts but all staffin Townsville have since left the company and the Darwin office has new staff. Notes in the management letter, indicate that there are serious control risks between the quotation and delivery of goods and services by ABG with poor internal controls around inventory, lack of segregation of duties and authorisation weaknesses compromising the debt covenant arrangements with the bank. 10 Your initial review of the financial statements for ABG confirm a good first half year and a significantly reduced (compared to budget) second half. Covid-19 has impacted the revenue and all capital projects have been suspended other than those where there are workplace health and safety compliances required e.g. in the Darwin office, there was a fire in one timber yard in October 2019 and inventory had to be rehoused in sheds in a different geographical location (in Darwin). 11 The CEO commented that he was happy to have the new auditors on board. He said that JWCA offered a much cheaper alternative than other tenderers and the previous auditor. Also, he commented that JWCA had a younger team noting that Ingrid was already known to many accounting staff as she had been on a 3 month contract in September to December 2019 when the previous auditors were finishing the FY2019 audit. 12 ACM1.1 Client Meeting Notes ACQ1.2 Fraud Questionnaire AE1-Engagement Evaluation WP AE1.1-Eng LO A B D F 1 CLIENT FRAUD QUESTIONNAIRE RESPONSES Anderson 2 Client Name Building Group Preparer Benjamin Smithers 3 Engagement Title J&W Chartered ABG Date Prepared 18.11.20 4 Period 30.6.20 Reviewer Vincent Wang Accountants 5 Work Paper ACM1.1 Date Reviewed 20.5.20 6 WORKPAPER Fraud Questionnaire and Answers provided by Management & Audit Committee (AC) 7 OBJECTIVE(S) Fraud Questions ABG Management Responses ABG Audit Committee (AC)Responses 8 Do you have any knowledge of any fraud We were notified by the Bank that some receipts We are not aware of any material perpetrated, alleged or suspected that for ABG were diverted to a different BSB and misstatements in the entity's financial could result in a material misstatement of Account number. statements the entity's financial statements? 9 No knowledge Do you have any knowledge of any other perpetrated, alleged or suspected fraud (regardless of value)? We understand but were not advised directly by management or internal audit that four staff (from the Brisbane warehouse) were dismissed for alleged fraud but no further criminal action was taken. Someone external to the organisation advised one of the directors on the audit committee they had heard a rumour about the incident. 10 No knowledge Have you received any communications from employees, former employees or others concerning allegations of fraud? An internal audit report suggested there was a suspected case in the Townsville office where staff were undertaking fraudulent activities in relation to selling of offcuts and with Covid-19, they were stood down and have since been terminated. 11 What incentives and pressures do you Chief Risk Officer (CRO) is part of the Chief A strategic risk register is operationally updated perceive to be on management and how Operating Officer's (COO) position. Ongoing by the staff and presented to the Audit are the related fraud risks managed? assessment of risks is in each person's job Committee (AC) at its quarterly meeting (with description. This is also a quarterly standing item the Coo/CRO in attendance). The AC reports to on the Audit Committee and the full board the Board meetings highlighting any areas of ACM1.1 Client Meeting Notes ACQ1.2 Fraud Questionnaire AE1-Engagement Evaluation WP AE1.1-Eng B C D E F F G H 1 Audit Engagement Evaluation Workpaper - Lead Schedule 2 Client Name Anderson Building Group Preparer 3 Engagement Title ABG Date Prepared 4 Period 30.6.20 Reviewer J&W Chartered Accountants 5 Work Paper AE1 Date Reviewed 6 WORKPAPER 7 OBJECTIVE(S) Summarise the key recommendations to the audit engagement partner (AEP) in relation to the acceptance of the ABG audit. 8 9 SUMMARY OF KEY ETHICAL &LEGAL ISSUES 10 1 11 2 12 3 13 4 14 5 15 16 SUMMARY OF KEY CLIENT EVALUATION ISSUES 17 1 18 2 19 3 20 4 21 5 1 22 23 KEY RECOMMENDATIONS TO ENGAGEMENT PARTNER 24 25 2 26 3 27 4 28 5 29 30 CONCLUSION - AUDIT ACCEPTANCE DECISION ACM1.1 Client Meeting Notes ACQ1.2 Fraud Questionnaire AE1-Engagement Evaluation WP AE1.1-Engagement Ethic_Legal WS AE