ACC 645 Milestone Two Guidelines and Rubric

ACC 645 Milestone Two Guidelines and Rubr ic
Overview: For the final project, you will work through components of a case study in which you will assume the role of a lead auditor at
Willis & Adams. Your
firm has been approached by
EarthWear Clothiers to perform an audit. In your role as lead auditor, you will evaluate internal and external factors to
determine client engagement, develop an audit plan, determine recommendations for improving internal controls, and communicate the audit opinion. For
this milestone, you will develop the audit plan.

Prompt: Your organization has decided to move forward with the audit of EarthWear Clothiers. As lead auditor, you will select one of EarthWear Clothiers’
business objectives and create an audit plan of their financial statements. The business objectives are:

Expand further into the global market by launching internet sites into South American countries
Increase customer base by introducing a new extreme sports product line to attract younger consumers
Reduce pricing to be more competitive in the marketplace by seeking out additional vendor relationships to lower costs of goods sold
Implement an employee stock purchase plan to increase productivity and employee morale
Reduce delivery and distribution time of products and services by adding additional warehouse locations
Use the information from your preliminary review and auditing standards to support your plan. Using your selected business objective, create an audit plan of the
organization’s financial statements that addresses the following: business risks, management assertions, audit risk, internal controls, and the effect on audit
procedures. Support your plan with the appropriate auditing standards. Also, determine materiality by conducting a preliminary risk assessment, and explain
which factors were used in making this determination. You can obtain
the ICFR and materiality guidelines on the Willis & Adams website. (Clicking the link initiates
an automatic download of a ZIP file. You will need a utility to unzip the archive before you can use it as intended.)

Specifically, the following critical elements must be addressed:

II.
Planning the Audit: Select one of the organization’s business objectives and create an audit plan of the organization’s financial statements. Use the
information from your preliminary review and auditing standards to support your plan.

A.
Using your selected business objective, create an audit plan of the organization’s financial statements that addresses the following, and support
each with the appropriate auditing standards:

1.
Business risks
2.
Management assertions
3.
Audit risk
4.
Internal controls
5.
Effect on audit procedures
B.
Determine materiality by conducting a preliminary risk assessment, and explain which factors were used in making this determination.
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Rub r ic
Guidelines for Submission: Your audit plan must be 2 to 3 pages in length (plus a cover page and references), with double spacing, 12-point Times New Roman
font, and one-inch margins. You should use current APA style guidelines for your citations and reference list.

Critical Elements
Proficient (100%) Needs Improvement (70%) Not Evident (0%) Value
Planning the Audit:
Business Risks

Creates an audit plan of the
organization’s financial
statements that addresses
business risks, and supports it
with the appropriate auditing
standards

Creates an audit plan of the
organization’s financial
statements that addresses
business risks and supports it
with auditing standards, but
the auditing standards are
inappropriate or irrelevant

Does not create an audit plan
of the organization’s financial
statements that addresses
business risks

15

Planning the Audit:
Management
Assertions

Creates an audit plan of the
organization’s financial
statements that addresses
management assertions, and
supports it with the
appropriate auditing
standards

Creates an audit plan of the
organization’s financial
statements that addresses
management assertions and
supports it with auditing
standards, but the auditing
standards are inappropriate
or irrelevant

Does not create an audit plan
of the organization’s financial
statements that addresses
management assertions

15

Planning the Audit:
Audit Risk

Creates an audit plan of the
organization’s financial
statements that addresses
audit risk, and supports it
with the appropriate auditing
standards

Creates an audit plan of the
organization’s financial
statements that addresses
audit risk and supports it with
auditing standards, but the
auditing standards are
inappropriate or irrelevant

Does not create an audit plan
of the organization’s financial
statements that addresses
audit risk

15

Planning the Audit:
Internal Controls

Creates an audit plan of the
organization’s financial
statements that addresses
internal controls, and
supports it with the
appropriate auditing
standards

Creates an audit plan of the
organization’s financial
statements that addresses
internal controls and supports
it with auditing standards, but
the auditing standards are
inappropriate or irrelevant

Does not create an audit plan
of the organization’s financial
statements that addresses
internal controls

15

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