5QQMN531 – AUDIT AND ASSURANCE Practical Skills Assessment

For most of the largest 150 companies in the world the selection of their external auditor is one
the most important decisions. This practical assessment will test the knowledge gained during
the course and your abilities to apply it on a real case study. You are required to write an
“Audit Proposal” for one of the largest 150 companies (the link to select one of them will be
online) companies, aim to acquire a new client.
As a senior manager of one of the top Accounting Firms, your Partner has asked you to select
one of the largest 150 companies in the world and prepare an Audit proposal, that he will
present to the future client.

The list of the top Accounting firms can be found on this website:
(The 20 Top Accounting Firms In The World [UPDATED 2021] (big4accountingfirms.org))
The words limit for this assessment is 1500 words (you can go over only of the 10% of this
This is a professional report so the presentation of it is quite important. The use of graph, table,
pictures, and bullet points will help you to reduce the use of the words.
Following you will find full details about the assignment, how to structures it, the main
requirements, and the marking scheme.
Where to start?
Consider making a title page with colour and imagery. While this is not a specific requirement, the
idea of this task is to simulate an audit proposal, which are professional presented. You are
encouraged to make the report as realistic as possible to the quality of a report you would provide a
client if you worked for leading accounting firm.

Audit Proposal for [name of the company]
[Audit firm name]

What to include? Requirements Marking scheme

Table of contents
Consider making a table of contents.
Once again this is not a requirement but does help offer more structure to your
proposal. Do not worry. This will not count towards your word count.

Executive Summary
The executive summary adds structure to your audit proposal because it offers the
reader with some context ahead of reading the entire document. In terms of
writing an executive summary, keep this short. Ideally five or six sentences
maximum, which encapsulates your entire proposal for your client. If you have
never written one before this website provides some good tips:
Suggested words count: 50

Audit Firm Overview
The purpose of this first section is to outline why your company fits with the
client’s specific needs. You can discuss the strong points of your accounting firms
and you can compare it with the existing auditor.
Corporate Governance, audit professional levels, audit quality and control and
their specific experiences are points to discuss.
You can find all the info that you need for this section on the Transparency Report
of the accounting firms, available on their websites and you can use news to
support your analysis.
Suggested words count: 250

Company Overview
In this section you must give an overview of the future client.
The history of the company, which market(s) is the organisation operating in, the
SBU and third parties, how they make money. Think outside the obvious.
Annual reports, companies’ website and financial news are good resources for this
Suggested word count: 100

Economy and Industry analysis
The purpose of this first section is to outline your knowledge of the client external
environment. Economy, Industry, Competitors are all points to discuss in this
section. You can use for this section PESTEL analysis and Market predictions. You
should be able to identify the threats and the opportunities (part of SWOT analysis)
for your client that you will use for your section on the future audit work.
Annual report, Industry reports, financial news are useful resources for this
Suggested words count: 200

Company Analysis
You are required now to show to the client your knowledge of its business. This
section should focus on business strategy of your client. In other words, this
section should outline the peculiarity of the company, its strategy, its governance
and Internal control system, its specific risks and recent performance. You must
analyse this info with a critical approach, trying to raise the client’s awareness of
its future needs for a new auditor, offering your reasoning for why you are a good
fit for their needs. You might consider presenting a SWOT analysis or other
Possible strategical management concepts to present this argument to your client.
Annual reports, companies’ websites and financial news are excellent resources
for this section.
Suggested words count 200

Analytical procedures and Audit report
Analytical procedures are a type of evidence used during an audit. These
procedures can indicate possible problems with the financial records of a client,
which can then be investigated more thoroughly. Analytical procedures involve the
use of financial ratios. You are required to use the analytical procedure over a
period of 3 years.
In this section you have to report the Audit opinion of the existing auditor on the
client’ s financial statements.
Annual reports are the best resources for this section.
Suggested words count: 300

Identifying area of future audit work
Based on the analysis done you should be able to identify the future risks for the
future client and its specific needs.
You should be able to identify what are the areas of the control systems and of the
financial statements that require audit works. You can suggest a future audit team
outlining the experiences you can offer to the new client.
Please support this section with reference to the previous sections.
Suggested words count: 300

Remember to add a short conclusion to bring everything together, you are most
welcome. Please keep this short, so around five to six sentences maximum.
Suggested words count: 100
Overall professional presentation
Consider how you can make your report as visual as possible to pick up increased
presentation marks. It is also a good way on keeping your word count down.


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