Audit Report AssignmentThis assignment is in two parts.
Obtain a list of the Fortune 1000 from the internet. From that list pick a company that has a
name that begins with the same letter as your last name. If there are none, pick the closest letter
to your last name. You will also need to find a company that filed a 10-k since January 1, 2018.
If the company has a September fiscal year end, this company will not work. This rule is
necessary because the PCAOB changed the reporting rules for 2018.
Go to SEC.GOV and access the EDGAR filing system. Search that system for the most recent
10-K filing. Using the find feature on your computer, search for the phrase “in our opinion.”
You may find more than one in the 10-k filing. If you find more than one instance of that phrase,
look for an audit report for the current year that addresses the audit of the financial statement.
Part 1: (Please read and pay attention to the report. My reason for doing this is to have you
read a real report and to look at a real 10-k). Although you could make this mechanical, I hope
you take it as a learning opportunity.
Copy and paste the audit report into a word file. Using the color scheme below, highlight the
different parts of the report for each of the items.
Add to the file the link where you obtained the audit report from the EDGAR system. Include
the name of the company and your name in the header.
Name the file: Audit_report_yourlastname
Turn the file into the appropriate place on Canvas.
1. Report title
2. Audit report address
3. Independence discussion
4. Scope sentence – what was audited
5. Opinion sentence
6. Standards used to conduct the audit
7. responsibilities of management and the CPA firm
8. Name of CPA firm
9. Audit report date
10. Indication of the length of the audit firm and client relationship.
Part 2:
Go to https://www.bat.com/annualreport
To find the 2018 annual report for British American Tobacco (abbreviated BAT). Open the PDF
file
Answer the following 10 things about the auditor’s report filed in the UK (without cutting and
pasting)
1. What type of opinion did BAT receive?
2. What is a Key Audit Matter (Generally) Abbreviated (KAM hereafter)
3. What were the KAMs for BAT broadly speaking? Provide a one or two sentence
description of the issue (you do not need to discuss how the auditor responded)
4. What was materiality for the Group Financial Statements?
5. What percentage of Group Revenue was tested?
6. What was the quantitative amount of misstatements that the auditor agreed would be
reported to the audit committee if found on the audit?
7. Who was the partner and firm for the engagement?
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