AUDIT RISK & PLANNING You are part of the audit team required to prepare a report to the senior partners of your auditing firm. This report will be used as part of the information provided to the audit team.
You and a colleagues have been assigned to prepare a report based on your research of Mayne Parma Group Limited (MPG). Assuming that this is the first time that the audit will be conducted by your audit firm Bundoora Partners. The report must cover the areas detailed below. This will require extensive research and critical analysis of the annual reports and any other information that you have obtained.
https://www.maynepharma.com/investor-relations/results-reports/
In your report you must address the following issues: - Auditors are required to have an understanding of their client’s business and industry, including any recent announcements and developments.
Describe briefly MPG’s business operations. (3 marks)
Describe briefly the industry that MPG operates in. (3 marks)
- Pharmaceutical companies are required to follow a number of regulations and legislative requirements for therapeutic goods.
Identify and explain four legal requirements (acts/regulations) for
pharmaceutical goods. (8 marks)
- Referring to the annual report for 2016
Analyse the year-to-year changes in the account balances for ten (10) statement items (profit & loss; financial position; cash flows) that you consider to be significant. Explain why you have identified these particular items e.g. the size of fluctuation and possible reason for the change or nature of item.
(Analysis must be of
line items and
not totals or amounts derived from line items such as Total Assets, Total Equity, Gross Profit, Net profit, etc. Marks
willnot be awarded for analysis of totals or derived amounts) (10 marks)
- Material misstatements
Identify four (4) major business risks (apart from the risk of product recall) and describe how those risks may increase the likelihood of material
misstatements in the financial statements.
(Explain why these particular areas are risky). (8 marks)
- Going concern
Assuming that the company had to recall some of its major brand products due to concerns about contamination and product tampering. This
required the removal of these products from sale. Using the available financial and other information (assume the impact of this recall will be material) is there a potential going concern issue? Explain. (4 marks)
- Social Responsibility
You have also been requested to research the company’s social responsibility information and provide a summary in your report. As part
of the audit engagement, would you recommend external assurance for
the Sustainability Report? Explain. (4 marks)
I ONLY NEED THE ANSWERS FOR QUESTONS 4,5,6.
Submission details
DUE DATE: September 18, 11am.
Presentation Requirements
The total word count should be 1000 words (additional words are permitted for attachments, appendices and references). Please use size 12 font; 14 or 16 font may be used for headings only; double spacing between paragraphs and each page must be numbered.
USE HAVARD REFERENCING STYLE
Please use appropriate references for resources used including accounting and auditing standards; regulations; and the Corporations Act 2001 etc.
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