Assignment Description : Question Auditing Assignment – Research On Audit Firms
In addition to the Submission Guidelines appearing on page 1, the assignment is to be completed by groups of four students. The submission into the campus specific assignment drop box is to made by ONLY one group member.
This assignment is comprised of three parts (Part 1, Part 2 and Part 3), worth a total of 40 marks. Part 1 is worth 24 marks, Part 2 is worth 12 marks, and Part 3 is worth 4 marks.
The first two parts must be completed and the last part addressed throughout the submission.
Question Auditing Assignment – Research On Audit Firms
Research on ‘Big 4’ an d ‘non -Big 4’ audit firms
(24 marks; i.e., no more than 1200 words)
Audit firms are categorized in a number of ways; the two most common being the
international ‘Big 4’ audit firms and the ‘non-Big 4’ (or mid-tier) audit firms.
The Big 4 audit firms are; (i) PriceWaterhouseCoopers (PwC), (ii) Ernst and Young (EY), (iii) KPMG, and (iv) Deloitte.
Most audit firms maintain a website that explains the services offered by the firm and provides resources to their clients and other interested parties. The services offered by most firms include both audit and non-audit services.
Find the websites for: (a) a ‘Big 4’ audit firm and (b) a ‘non-Big 4/mid-tier’ audit firm. Present a ‘business report’ that addresses the following two requirements;
(a) Compares your two audit firms on the following ten characteristics: (20 marks; i.e., no more than 1000 words)
i. Range of services provided.
ii. Geographic coverage (i.e. where their offices are located). iii. Number of staff and special skills offered.
iv. Industries in which they claim specialisation/expertise.
v. Publications and other materials provided to their clients or the general public vi. Key marketing message(s).
vii. A topic of your choice No. 1.
viii. A topic of your choice No. 2. ix. A topic of your choice No. 3. x. A topic of your choice No. 4.
Note, to find four ‘topics of your choice’, you will need to look-up (at least) four articles published in ‘professional’ and/or ‘academic’ accounting/auditing journals that have examined differences between ‘Big 4’ and ‘non-Big 4’ audit firms. These articles (reference sources) must be cited in your responses, and listed appropriately at the end in a reference list using APA referencing style.
(b) Makes a recommendation on which audit firm your group would prefer to work for and why. Your explanation must refer to the material presented in Part 1 (a). If the recommendation of your group is ‘undecided’, then explain why, again, referring to the material presented in Part 1 (a). (4 marks; i.e., no more than 200 words)
In terms of Part 3’s ‘Format and presentation quality’ (worth 4 marks out of 40 marks; 10 per cent), your ‘bu sin ess r epor t’ for this part must have a/an;
(i) Executive summary (between 100 to 200 words),
(ii) Introduction that succinctly outlines the main theme (s) and requirements of this part of the assignment (no more than 200 words),
(iii) Body that specifically addresses the requirements of Part 1 (a) (no more 1000 words),
(iv) Conclusion that specifically addresses Part 1 (b) (no more than 200 words), and
(v) Reference list containing all cited works. (iv) Proper English grammar, appearance.
Research on Arthur Andersen/Enron
(12 marks; no more than 600 words)
In 2002, the audit firm Arthur Andersen (one of the then ‘Big 5’ audit firms!) collapsed following charges brought against it in the United States relating to the failure of its client, Enron. Some other clients announced that they would be dismissing Arthur Andersen as their auditor even before it was clear that Arthur Andersen would not survive.
(a) Using any twoof the three theories outlined in Gay and Simnett (2015, Chapter 1, pages
20-21)) (i.e., the prescribed textbook) on the demand for assurance ((i) Agency Theory, (ii) Information hypothesis, and (iii) Insurance hypothesis), explain some reasons why these clients took this action. (2 x 4 marks = 8 marks; i.e., no more than 400 words)
(b) Present an argument of why a similar event is not likely to happen again. Your discussion should be (i) in context of what went wrong with Arthur Anderson/Enron and (ii) make specific references to how regulations and auditing standards have changed since the collapse of Arthur Andersen.
(4 marks; i.e., no more than 200 words)
Format and presentation quality
As mentioned above, Part 1 (a) and Part 1(b) should be presented in a ‘business report’
A key aspect in your group’s choice of format/layout should be to ensure you impart your key messages effectively (i.e., complete the requirements) and efficiently (i.e., it should be succinct and take into account the word limit).
As per the Submission Guidelines on page 1, the report also should be coherent, and so consistency is expected throughout (e.g., formatting, language style, and linkages between the parts).
Note, groups who split up the requirements and work independently are likely to have more difficulty accomplishing this objective compared to groups who work on each of the parts collaboratively (i.e., as an ‘audit team’). An assignment that has been put together last minute will be obvious to the marker and, therefore, will not earn any marks for this part.
Make sure all pages are numbered, and the text fits within the margins of your pages. Start each part on a new page and start each requirement of a part on a new page, making sure to include the relevant heading.
* For Parts 1 (a) and 2(b)
To obtain 70 percent or more for either of these two requirements, there must be evidence
of ‘material’ (i.e., quality and quantity) research. Therefore, and as per the submission guidelines (on the cover sheet to this assessment task document), it is important that all reference sources used are cited in the text of your report and listed appropriately at the end of the report in a reference list using APA referencing style.
** For Part 1 (b)
To obtain 70 percent or more for this requirement, there must be strong evidence that your
responses to this requirement are based on (i.e., connected) to Part 1 (a).