This document provides coursework instructions related to auditing Home Retail Group plc. It includes information about the company, its divisions, and financial statements. Students must critically evaluate the risk-based audit approach used for Home Retail Group, identify factors from 2012-2014 annual reports that could indicate going concern problems, and discuss factors that would influence the auditor's opinion on the 2014 financial statements. The coursework should relate issues from Home Retail Group's audit to relevant auditing standards and literature.

1. COURSEWORK
Home Retail Group plc
www.homeretailgroup.com
Home Retail Group Investor Centre
http://www.homeretailgroup.com/investor-centre/
This coursework contributes 50% to you overall module mark.
All material submitted must be the students own work.
Plagiarism or copying is a University assessment offence.
Home Retail Group plc are one of the UK’s leading home and
general retailers, bringing together some of the UK’s most
recognisable UK brands.
It comprises three divisions, Argos, Homebase and Financial
Services.
Argos is the UK’s leading multi-channel retailer and Homebase
is a leading home-enhancement retailer.

2. The Financial Services business makes it easy for customers to
buy the products they want.
www.homeretailgroup.com
Extracts from Annual Report and Accounts
2013/ 14
-
Group consolidated income statement
for the 52 weeks ended
1 March 2014
-
Consolidated statement of financial position
as at
1 March
2014
-
Consolidated statement of cash flows for the 52 weeks ended
1 March 2014
-

3. Independent auditor’s report to the members of Home Retail
Group plc
30 April 2014
- Audit committee report
May 2014
-
Half-Year results
22 October 2014 ,
26 weeks to 30 Aug. 2014
-
Homebase to close one in four stores
The Telegraph
22 October 2014
www.lexisnexis.com

4. SOURCES
-
Auditing and Assurance
Services
Third International Edition
Eilifsen & Messier
McGraw Hill
2014
Chapters 17 and 18
-
Auditing
Millichamp & Taylor
10
th
edition
Cengage
2013

5. Chapters
14, 26 and 27
-
The Audit Process
Gray & Manson
5
th
edition
Thomson
2012
Chapters
14, 16 and 17
-
Principles of External Auditing
Porter, Simon & Hatherly
4
rd
edition

6. Wiley
2013
Chapters
9, 13 and 14
-
relevant APB / IAASB ISA’s and professional body
websites
(
APB ISA’s revised October 2009 )
see
www.frc.org.uk/apb
ISA 700
( UK and Ireland
Revised September 2014 )
The auditor’s report on financial statements
ISA705

7. ( Revised October 2012 )
Modifications to opinions
ISA 706
( Revised October 2012 )
Emphasis of matter paragraphs
ISA 315
( revised June 2013 )
Obtaining an understanding of the entity and its
environment and assessing the risks of a material
misstatement
ISA 500
Audit evidence
ISA 520
Analytical procedures
ISA 570

8. ( Revised September
2014 )
Going concern
-
newspaper articles from
Nexis UK website
TASKS
1.
Critically evaluate the risk-based approach to external audit
with particular reference to the audit of Home Retail Group plc.
You should give examples of how you might collect
evidence

9. and assess the degree of business risk (
obtaining
an understanding of the entity and its environment and
assessing the risks of a material misstatement )
in the 2014
audit of the company and factors affecting the company’s
‘
control environment
‘.
(
20%
)
2.
Identify those features of Home Retail Group plc’s results for
2012 – 2014

10. which might indicate to you as the external auditor
that the company was facing going concern problems.
(
40 %
)
3. Identify any qualitative factors or information in the annual
reports and accounts for Home Retail Group plc for 2013/ 14 ,
including the report of the audit committee,
that you as the
external auditor would consider that might suggest that the
company would be able to continue in business for the
foreseeable future.
(

11. 15%
)
4.
With reference to the Independent auditors’ report
of Home
Retail Group plc and specifically the areas of particular audit
focus identified by PwC discuss the factors which would
influence
you as the external auditor in forming an opinion on
the financial statements of Home Retail Group plc for 2014.
Indicate briefly the form that your opinion might take including
any emphasis of matters paragraph that you may consider
making in relation to the appropriateness of the going
concern basis.

12. (
20%
)
Overall structure and presentation, referencing and bibliography
(
5%
)
ASSESSMENT
CRITERIA
-
Your coursework
should be 1500 words long +/- 10%
-
The coursework must be clearly presented with an
introduction, structured headings and sections and a fully
referenced bibliography
-

13. You must relate the specific practical issues arising from the
audit of the company to relevant
ISA’s,
to the audit
process and to articles from the accounting literature
-
You should highlight the external auditors approach to the
assessment of audit risk in planning the overall audit
programme
-
You should clearly identify the range of sources you have used
in obtaining evidence