You are part of the audit team responsible for planning the Bega Cheese (parent and the consolidated...

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You are part of the audit team responsible for planning the Bega Cheese (parent and the consolidated economic entity) audit engagement for 2017. You and your colleagues have been assigned to gather relevant background information and prepare a report for a meeting with your senior audit managers and partner. In the report you must address the following issues: a. What are the areas in which Bega Cheese conducts its operations? b. Which particular laws/regulations (other than financial related categories which include legislations such as: Corporation Act 2001, Australian taxation laws, etc.) affect its operations? You need to list SIX laws/regulations. [2+3=5 marks] 2. Identify FIVE inherent risks for the audit of Bega Cheese. For each inherent risk, identify the account or accounts that may be affected. [10 marks] 3. With specific reference to Bega Cheese’s corporate governance arrangements, you need to assess the likelihood of the potential reliance that could be placed on the overall control environment. Your conclusion should be supported by at least FIVE factors. [5 marks] 4. Recently Bega Cheese acquired the Vegemite and other Kraft brands in a $460 million deal that takes it far from its roots as a cheese producer. How will this acquisition affect your 2017 audit plan for Bega Cheese? Your answer should be supported by at least FIVE factors. [10 marks] 5. In early 2016, Bega Cheese and Blackmores set up their joint venture- called Bemore- to supply infant formula and other nutritional foods to consumers in Australia and Asia (mainly China). However, due to regulatory change in China and intense competition the joint venture did not go as well as initially hoped. As a result, there was a dramatic fall in the share price of Bega Cheese. How will this fall affect your 2017 audit plan for Bega Cheese? Your answer should be supported by at least FIVE factors.
	
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Auditing and Assurance (ACC3AUD)  
Semester 1, 2017 
Department of Accounting  
La Trobe University 
 
This assignment is to be based on Bega Cheese (ASX code-BGA).   
 
The assignment is to be completed in groups of 3 (members need not be in the same workshop).  
 
Students are expected to demonstrate their ability to critically evaluate information relating to 
Bega Cheese and apply analytical skills to identify potential audit risks. This will require 
extensive research on Bega Cheese’s operations, strategies, critical analysis of the annual report 
and any other information that you have obtained. 
This assignment represents 20% of the total assessment of the subject. 
All assignment answers will be checked for plagiarism using Turnitin. 
Submission details  
1. The assignment must be submitted via LMS through Turnitin, as per the Subject 
Learning Guide. 
2. The due date for assignment is Thursday April 27, XXXXXXXXXXpm. Any assignment 
received after this time will be considered late and subject to the penalty described in the 
Subject Learning Guide (pp. 7-8).  
 
Length and format  
The assignment shall be presented in the below format: 
3. A title page containing the title of the assignment, name and student numbers of the group 
members, workshop facilitator’s name and the time and location of the workshop.  
4. A table of contents 
5. An executive summary 
6. The build of the assignment (MS word, maximum 3,000 words (10% plus or under is 
acceptable e.g XXXXXXXXXX), Times New Roman, size 12 font, double spacing). 
Appropriate reference citations throughout the assignment are expected. Each page must 
be numbered. 
7. References

Failure to meet the above length and format requirements will incur an eight (8) mark 
penalty.Required: 
1. You are part of the audit team responsible for planning the Bega Cheese (parent and the 
consolidated economic entity) audit engagement for 2017. You and your colleagues have 
been assigned to gather...

Robert · Accepted Answer

ANSWER 3.
ISA 315
1
, Identifying and Assessing the Risks of Material Misstatement through 
Understanding the Entity and Its Environment, explains the auditor’s responsibility to identify 
and assess the risks of material misstatement in the financial statements, through understanding 
the entity and its environment including the entity’s internal control. The major component of 
internal control is the control environment. An organization’s control environment is the 
responsibility of the management and the auditor is expected to review the same in the course of 
his audit. The auditor assesses the risk of material misstatement by analyzing and reviewing such 
control environment. For this purpose, the auditor considers various factors and policies nd their 
implementation within the entity.  
In context of Bega Cheese , Five of these factors (as analyzed from their corporate governance 
reports) are elaborated as follows- 
1.  Communication and enforcement of integrity and ethical values 
Bega cheese have high values and seek to promote honesty and integrity among their employees 
on a day-to-day basis. As per Compliance and integrity statement Fraud and Corruption Policy 
Statement - 
2
  
a. The company does not accept any acts of corruptions and frauds of any kind. It serves all 
the applicable anti corruption laws .  
b. Fraud against the Bega Group are also not tolerated.  
c. The employees at all levels are expected to exercise the utmost levels of ethics in 
fulfilling their duties and in all dealings. 
                                                           
1 IAASB, 2009. ISA 315: Identifying and Assessing the Risks of Material Misstatement Through Understanding the Entity and Its Environment. 
2
 http://www.begacheese.com.au/investors/corporate-governance/ 
d. Transparency is required to be maintained at all levels
2. Commitment to competence-  
The Bega Cheese company follows a strong commitment to competence. It carries 
strong commitment towards compliance framework.  
The company is committed to have competence in all the areas of its operations. One 
of the major stakeholder in their business are Farmer milk suppliers.

You are part of the audit team responsible for planning the Bega Cheese (parent and the consolidated economic entity) audit engagement for 2017. You and your colleagues have been assigned to gather...

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