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Auditing Semester 1, 2018 INDIVIDUAL CASE STUDY ASSIGNMENT – WRITTEN REPORT Case study You are member of a team assigned to undertake research on major reasons and consequences of poor performance,...

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Auditing
Semester 1, 2018
INDIVIDUAL CASE STUDY ASSIGNMENT – WRITTEN REPORT
Case study
You are member of a team assigned to undertake research on major reasons and consequences of poor performance, near collapse or turnaround or near demise, or demise of General Motors Company in USA.
Required
You need to use the risk-based auditing approach, auditing concepts, auditing standards and case laws which you have learnt in this unit and apply them to this company.
The key areas of your research should cover issues, such as:  Business risk, inherent risk, control risk and other risks
to derive your conclusions and recommendations.
Learning Outcomes and Graduate Attributes
Completing this assignment will help you achieve the Learning Outcomes and ECU Graduate Attributes as described on page 11 of the unit plan.
Preparation and Instructions
This assignment is focused on understanding the facts of the case study and using the relevant accounting standards, regulations, case law and other information to a
ive at your conclusions and recommendations. Please use the Australian Auditing Standards even if it is NOT an Australian company, as they are based on international standards in order to derive your conclusions and recommendations.
The length of this case study written report should not exceed 15 pages, excluding any Appendices (for data, tables, graphs and diagrams) and references at the end.
Report structure
The main headings of the case study written report are:
 Executive Summary
 Introduction
 Methodology
 Findings
 Implications of findings
 Conclusions and recommendations
Marking criteria
The marking criteria for the case study written report is:  Report Conventions : 5 marks o Executive Summary o Introduction  Research : 5 marks o Methodology o Findings  Application : 5 marks o Implications of findings o Conclusions and recommendations  Written Communication Skills : 5 marks
XXXXXXXXXXTotal : XXXXXXXXXXmarks
Resources Please refer to the resources available in “Annotated reading list”, “Other significant references and resources” and “Blackboard” on pages 6 of the Unit Plan. The resources which can be used are numerous, such as company annual reports; websites; professional and business magazines; textbooks; academic papers, newspaper and video clips. Please research the information and its logical flow, as it will also assist you in structuring this case study report.
Annotated reading list
 Chartered Accountants Australia and New Zealand (CAANZ XXXXXXXXXXAuditing, assurance and ethics handbook 2017. Sydney: John Wiley & Sons.
 Gay, G., & Simnett, R XXXXXXXXXXAuditing and assurance services in Australia: (6th ed.). North Ryde: McGraw-Hill.
Other significant references and resources
 Roebuck, P., Martinov-Bennie, N. & Soh, D XXXXXXXXXXAuditing and assurance : A case study approach (6th ed.).Chatswood: LexisNexis Butterworths.
You are encouraged to widely read the latest and relevant auditing and accounting literature by regular review of various professional journals and business periodicals. These include, for example,  “Charter” - published by the Chartered Accountants of Australia and New Zealand  “In the Black” - published by CPA Australia Newspapers such as “Financial Review”; “West Australian”; “Australian”; “Wall Street Journal”. These sources of information are available in the li
ary.
Listed below are a number of useful web sites that may also be of assistance to you:
 AuASB - Australian Auditing and Assurance Standards Board - http:www.aarf.asn.au  Auditing and Accounting - Australian National Audit Office - http:
www.anao.gov.au  Institute of Chartered Accountants in Australia -http:
www.icaa.org.au  CPA Australia -http:
www.cpaaustralia.com.au  The Australian Financial Review - http:
www.afr.com.au  Business Review Weekly -http:
www.
w.com.au  The Wall Street Journal -http:
www.interactive.wsj.com
Answered Same Day Apr 05, 2020

Solution

Abr Writing answered on Apr 07 2020
130 Votes
INDIVIDUAL CASE STUDY ASSIGNMENT – WRITTEN REPORT
Table of Contents
Executive summary    3
Introduction    3
Methodology    3
Findings    4
The implication of the findings    10
Conclusion and recommendation    11
References    12
Executive summary
In the recent time, many of the company have ended its operation as they fail to adapt to the changing market needs. In the cu
ent research, we will conduct the study over the collapse or demise of the General Motor which was once leading the Australian market. For identifying the cause of the company failure we have collected data from the secondary sources to identify the reason behind the company failure. Further, we have identified few of the reason why the company has failed to adjust to the changing market condition. At last, the report provides few of the suggestion which the company should have adopted in order to avoid collapse.
Introduction
There are many big companies which fail as they didn’t adapt to the changing times and situation in the market. In the cu
ent study, we will be evaluating the case of the demise of the general motor in the USA. The company at the point of certain times was selling more than 50% of the cars in the US at present which has declined to 20%. The company had the systematic problem for a decade which leads to falling off the company. The company approach of decentralized operation with coordinated control was good till the time company was dominating the industry. The assessment identifies the major issue faced by the company and the action company should avoid in order avoiding failure.
Methodology
This one of the most important part of the research and has a huge impact on the outcome of the research. For the cu
ent study inductive approach has been followed in which key focus is on general assumptions which are specific and apply to the study. The philosophy followed in the cu
ent study is interpretivism in which the information gathered from the secondary sources is interpreted. The data for the research is obtained from secondary sources including books, article, news and from the internet. For the cu
ent research only authenticated sources has been considering so that the outcome of the research is appropriate. The collected data is analyzed using the qualitative approach as the data collected is theoretical. Also, a proper care of ethics has been taken and the prior concert is obtained before collecting information. In the research, we have also obtained the information from the news articles which were published in related to company failure. Also for the task, we have reviewed the auditing standard to identify the reason for the company failure.
Findings
It is common knowledge in the industry that an audit plan offers the particular guidelines auditors have to follow when conducting an external audit. External public accounting firms conduct external audits to assure outside stakeholders that the firm’s financial statements are prepared by generally accepted accounting principles (GAAP) or International Financial Reporting Standards (IFRS) standards. The International Standards on Auditing (ISA) states that the auditor has an objective to plan the audit to ensure that the audit process is effective. The plan shall establish a general audit strategy that sets the audit’s timing, scope, and direction, and that guides the audit plan’s development. 
Approach of Auditor in the segment of risk based auditing
Audit risk assessment planning consists of eight critical steps (Gray, 2007). As in the particular case of general motors, the financial auditor must ca
y out an initial audit planning for assessing the overall risk. This step involves accepting the client & continuing with the audit program & identifying the client’s key reason for needing an external audit (Johnstone, et al., 2014). We must then obtain an understanding with the client & select staff, from the client’s side, for the Engagement. Secondly (2), we must understand the client's industry & business. This is a key success factor for designing an effective audit program. It is essential that an auditor has a detailed knowledge of the automobile industry and the overall business of General Motors. Among the business & industry dimensions that the auditor must be keen about are external & industry the environment, business processes & operations, management & governance, strategies & objectives & performance & measurements.
Thirdly (3), the auditor must assess the client’s business risk. Using disclosure procedures & controls, the auditor must gain access to material information about business (Lee, 2006). Also, management must inform the auditor & the audit committee associated with the GM group responsible for any internal control’s substantial deficiencies, incorporating the material weaknesses. The auditor then (4) ca
ies out analytical procedures at preliminary level. This incorporated the overall comparison of GM’s financial ratios with the standard ratios of industry. The aim is to have a view of how the client makes an overall comparison to the industry, as well as in order to determine any change...
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