ACC2366 – Audit Principles and Procedures
Midterm performance-based assessment
(Worth 25% of your final grade)
After reading the case content for Asher Farms and additional research on the poultry industry complete the following:
1. Brainstorm with your classmates the industry and external environment, business operations and process, management and governance, objectives and strategies and measurement and performance factors that could affect Asher Farms’ business risk.
Use your imagination. Make assumptions about the controls, processes and organizational structure. Fill in pieces of information you think you need to make your assessment.
Example: The Board of Directors meet on a weekly basis, detailed minutes are kept and they review
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Do you believe Asher would have by-laws, keep complete minutes, have an audit committee and a competent Board of Director, and have a code of ethics? These items set the tone at the top or the ethical values of the company. How does the tone at the top and the ethical values they expect impact the decision to accept an engagement? If they have an audit committee are the active? Do the have the correct skills and knowledge to function as an effective audit committee. If not, how would that affect the decision to accept?
The report is designed to assess your understanding of the concept of risk. So your report should demonstrate your understanding of Asher Farm's business risks.
Under each you need to identify at least one risk and how that risk could impact the risk of material misstatement in the financial statements. For example under industry and external environmental are there specific poultry industry risks that would affect the firm’s decision to accept or decline the engagement? Is is considered to be a risky industry? Is the firm familiar with the industry risks, if not should they accept the client? Are the familiar with the unique (if any) accounting requirements for the industry etc.
The format you could use would something like this:
Industry and External