The rationale for BAO3306 Auditing as per Unit of Study Outline is that on completion of this unit students should have a sound understanding of the underlying concepts of auditing and in particular of financial auditing. By adopting a logical, structured approach they should have the capacity to analyse the salient audit issues and apply relevant auditing theories and succinctly communicate their professional, ethical decision. 

One of the unit outcomes requires students to be familiar with key tools used by auditors for collecting and evaluating evidence, in both manual and computerised accounting information systems, which will enable them to express an opinion on the fair presentation of financial reports.

To ensure the audit is carried out efficiently and in a timely manner, the auditor develops an audit plan for the conduct and scope of the audit. ASA300 states that the auditor shall plan the audit so that the engagement will be performed in an effective manner.

1. For the purpose of the assignment, you assume the role of an auditor and your firm has recently been appointed as external auditor of an entity. As required by Auditing Standard ASA300, you are assisting your Audit Manager in preparing an audit plan for the audit of the entity's financial statements.

2. The audit fee is $36,000 and had been communicated to the client in the Engagement Letter.

3. You are required to download the 2022 annual report published by the following entity:

- Alara Resources Limited (https://www.alararesources.com/investor-information/financial-news-performance/annual-reports)

4. Using information in the relevant chapters of the textbook, the company annual report and other relevant information, preparing a document for your Audit Manager to assist him in planning the audit. Note that quoting directly from textbook does not meet the objective of the assignment.

Required

With reference to relevant chapters of the textbook prepare document for your Audit Manager. Your document must include the followings:

1. Introduction

2. Key information:

a) Gain an understanding the client

i) entity level

- client's reputation with its customers, suppliers, employees, shareholders and the wider community.

- client operations or branches

- Nature of employment contracts

- Sources of finance

- Ownership structure

b) Identify significant accounts most at risk of being materially misstated

i) PPE

ii) Provision

iii) Revenue

c) Identify what can go wrong (audit risk assessment) for each of the accounts selected in (b)

Answer rating: 100% (QA)

Audit Planning Memorandum for Alara Resources Limited To Audit Manager From Your Name Date February 29 2024 Subject Audit Plan Alara Resources Limited 2024 1 Introduction This memorandum outlines the ... View the full answer