ACC303 Assignment Y3 S2 B11

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Vietnam National University –
International School
HELP Bachelor of Business (Hons)

ACC303
Auditing & Assurance
Services
Assignment
Year 3, Semester 2, Batch 11
March 2015
Date of Release: 25 May 2015

ASSESSMENT DETAILS
Due Date:

8 June 2015

Value:

20% of total assessment for this subject

GENERAL INSTRUCTIONS:
1. Please take note that copying the work of others, allowing others to copy your work, and / or attempting to do any of the above mentioned will result in automatic failure of your assignment. NO EXCUSES FOR ACTS OF PLAGIARISM WILL BE
ENTERTAINED. You may of course consult textbooks, journals, or any publications for reference purposes. All sources or materials used should be clearly quoted / referenced. 2. Before submitting your assignment you should make a copy and submit the original for assessment. Late submissions will not be entertained unless there is (are) some legitimate mitigating factor(s).
3. Word limit : 1,500 words

QUESTION 1 (20 marks)
You are the audit senior on the audit of Airclean Sdn Bhd, a small sized manufacturer of air purifiers.
This is the first year your firm has performed the audit. As part of the planning work, you have performed analytical procedures on an annualised basis and compared the results to industry averages and last year’s audited financial information. The results are given below :
Airclean Sdn Bhd
Industry
Average
Ratio
2012
2011
2012
1. Current ratio
1.7
2.2
2.7
2. Days in receivables
93
68
55
3. Inventory turnover ratio
4.3
5.5
5.8
4. Debt to equity ratio
47%
38%
30%
5. Gross margin
43%
35%
39%

Required :
(i) Discuss the conclusions that you can draw from the above ratios about Airclean’s financial position.
(10 marks)
(ii) Identify potential audit risks to be investigated further in light of the ratios.
(10 marks)
QUESTION 2 (20 marks)
You are the auditor of Nobiz Sdn Bhd.. You have made the following notes on the company’s customer billings and collections procedures, which is mainly attended by a

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