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FIRST SEMESTER 2018/2019 A181



Learning Objective: Integrate the auditing procedures for specific cycles from planning to
completion of the financial statement audit.

Marks: 20% (10% for report writing and 10% for presentation).

You are working at an audit firm. Your audit team has been selected by your firm’s
Senior Partner to perform a Financial Statements audit of a company that was
audited by other audit firm during the prior year. Your senior partner is expecting
you to do preliminary assessment about the risk of material misstatement and
expecting your team to suggest the most appropriate substantive tests to be applied
during the field audit. Your team are expected to produce a report of your findings.

The Senior Partner also specifically asks your team to identify the importance of
implementing a good internal control systems in this company and to suggest
control procedures that must be in place for a better financial reporting for this
company. It is understood that he would include your team’s suggestions in the
Management Letter at the end of the audit.


1. Report:

Your team are required to prepare a report to the Senior Partner in the next Audit
Partners’ monthly meeting. It must be professionally prepared and avoid common
grammar mistakes.

Include following items on the cover of the report: The name of the company, name
of the audit team members, staff number and team identification.


Please also include a list of references.

2. Presentation
It is expected that the senior partner will allow your audit team to take 20-30 minutes
for the presentation. It is also common for the Senior Partner and other audit partners
to ask questions related to your presentation. Please dress appropriately during the
presentation and be professional as much as you can. Some of the audit partners
are known to be cruel and mean!


1. Identify and choose one Malaysian public listed company that its Financial Statements was
qualified by the auditor. The company’s Financial Statements should be for the financial
year 2015 to 2018. Please inform your lecturer, the company and the financial year end

2. Study in details of the chosen company (for that particular year) and gather relevant
information from various sources.

3. Your report should cover the followings:

a. The background of the company.
b. The reason of why the company was issued a qualified report.
c. Identify accounting cycle/(s) related to the issuance of the qualified report.
d. Based on (c):
- Identify and assess inherent risk of material misstatement in that cycle.
- Identify and assess control risk of material misstatement in that cycle.
e. Determine the substantive tests that should be applied in that cycle.
f. Suggest the importance of implementing internal control in this company and the control
procedures that must be in place to avoid the same issue in the future.

Please upload the presentation materials via UUM online learning system.

Presentation: Week 13 - Actual date will be announced by the Senior Partner later.

Submission of the written report: Week 12 (hard copy and uploaded via UUM online learning
system) -Actual date will be announced by the Senior Partner later.