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Assignment 5.


- Go to the website of PSE or the publicly listed companies
- Select one industry and prepare the following:
o Table of contents
o Background information
 Client background
 Significant development and factors about the client’s business/significant
performance or accomplishments compared to the plans or targets
o Engagement proposal suitable to the information gathered in requirement 1
 Consider the company selected as your prospective client
 Once you are going to accept, you are ready to prepare the management
o Prepare an engagement planning memo (preparation for the actual audit)
 Point of view: external auditor
 Objectives of the engagement
 Background information
 Work that will require specialist assistance
 Risk factors
 Deliverables
 Proposed timetable, staffing, and allocation of roles and responsibilities
 Engagement approach
o Summary of findings and observations
 The result of your audit
 Summarize findings
 In selecting the industry, you won’t find the findings and observations:
 Assume at least 6 findings and observations
o Can be those presented in the book or other sources
o Government: go to COA website > audit report
o 1 pertaining to cash
o 1 pertaining to inventories
o 1 pertaining to internal control (lapses of controls)
o 1 pertaining to performance (financial and operations)
 Findings need not be related to that particular company
 Put:
 Topic sentence
o Incorporating the 4 elements already
o Ex. The cashier was not able to deposit his collection amounting
to P100,000 to the bank due to the office being quite far from
the bank (or the cashier wanted to deposit it at the end of the
week) which is a violation to the company policy to deposit the
cash collection intact at the end of the day and might be prone
to theft or irregularities.
 Discussion (3-4 paragraphs)
o Condition
o Criteria
o Cause
o Effect
 Separate paragraph for recommendation
 Separate paragraph for management comment or justification (not be
filled up this time)
o Prepare an executive summary (1-2 pages)
 Depends on the number of findings you have
 Content:
 1st paragraph: background
 2nd paragraph: recognition of their accomplishments (found in the
significant developments) – highlights only
 3rd paragraph: summary of findings and recommendations
o All the findings
o Only the topic sentence is transferred here
 To be used in the exit conference
 Reproduced for each member of the group
 3 members should be on the audit team
 7 members on the management side