Audit Role Play Storyboard
Süžeeskeem Tekst
- INVESTIGATION ON CYBERSECURITY BREACH
- CEO(Dekang)
- 2023FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS
- CFO(Dayu)
- DBA BANK
- CTO(Gary)
- Lead Partner 1(Nithin)
- 2023FINANCIAL STATEMENTS
- Lead Partner 2(Phu)
- DPNJ AUDIT FIRM
- Review Partner(Jiaqi)
- Associate(Jingci)
- DEVELOPMENT BANK OF AUSTRALIADBA BANK
- DEVELOPMENT BANK OF AUSTRALIADBA BANK
- DEVELOPMENT BANK OF AUSTRALIADBA BANK
- WE ARE READY FOR EXTERNAL AUDIT
- Characters in this Storyboard
- Dear DPNJ Audit Firm, We would like you to become our external auditor for the financial year 2023. Best regards,CFO of DBA Bank
- TO: DPNJ AUDIT FIRM
- AUDIT AND ASSURANCE SERVICE REQUEST
- CEO and CFO of DSA Bank are having a meeting.
- DPNJAUDIT FIRM
- CONFEDENTIAL
- CFO informed that2023 financial statements are ready to be audited.
- NEW CLIENT ACCEPTANCE CHECKLIST
- No conflict of interestIndependenceEnough competenceResources to complete on timeAudit fees Genuine reason for leaving previous audit firm
- CFO decided to hire DPNJ Audit firm to perform audit for financial year ending 2023.
- DBA BANKIT DEPARTMENT
- DPNJ Audit firm forms an audit team including Nithin as lead partner , Jiaqi as review partner and Jingci as associate.
- DO WE HAVE ENOUGH COMPETENCE?
- DON'T WORRY! I KNOW QUITE A LOT ABOUT CYBERSECURITY CONTROLS.
- DPNJ starts performing new client acceptance process for DBA Bank's audit service request.
- The next day, a cybersecurity breach occurs at DBA and the customers personal details such as driver license, passport and government ID numbers, phone numbers and addresses were stolen.
- When DPNJ hears about this, they reconsiders the client acceptance to make sure the audit team formed has enough IT knowledge and internal control sytems related to the breach to accept DBA Bank as new audit client.
- DPNJ accepts DBA Bank as new client and starts the audit process. CFO informs audit team that they use accounting software to record all transactions and provided the prepared financial statements.
- NOT ACCOUNTED FOR THE BREACH!
- Expense Liability Asset (Cash)
- .
- .
- WE CANNOT LET THE SHARE PRICE DOWN!
- After assessing the financial statements and transactions, Jingci informs the team that the accounts does not reflect for cybersecurity breach.
- HOW ABOUT WE GIVE YOU DBA BANK SHARES ?
- Nithin then informs CFO and CEO that cybersecurity breach has increased the expenses and liabilities from IT security upgrades, compensation to customers, fine to government and legal fees, consequently reducing cash, and these needs to be disclosed in the financial statements.
- ..
- NO ONE WILL EVER KNOW THIS!
- ALL RIGHT! DEAL!
- CEO and CFO do not want to disclose the cost for IT security upgrades, concerning that lower profit might have negative impact on the share price.
- YOU KNOW, THE AUDIT TEAM LEAD ACCEPTED DBA SHARES!
- TODAY SPECIALS
- XXXXXXXX
- CEO negotiates with Nithin that they will give him $30,000 worth of DBA Bank shares as gift if he helps them not disclose IT security upgrade cost and provides unqualified opinion.
- NITHIN TOOK THE SHARES TO GIVE UNQUALIFIED OPINION!
- Nithin accepts the shares to unqualified opinion for financial statements.
- Jingci finds out that she has discovered that Nithin accepted DBA shares as gift to provide the unqualified opinion without disclosing all costs.
- DBA BANK
- Jingci immediately tells Jiaqi that Nithin accepted DBA shares as gift to provide the unqualified opinion without disclosing all costs.
- HIS INDEPENDENCE HAS BEEN COMPROMISED!
- OMG! THAT IS SELF-INTEREST THREAT!
- DPNJ removes Nithin and assigns a new lead partner, Phu, since Nithin breaches independence and there is a self-interest threat.
- I SHOULD NOT HAVE TAKEN THAT BRIBE!
- After Nithin departure, further reinvestigation on cybersecurity breach impact on DBA accounts is conducted.
- WE NEED TO INTERVIEW CHIEF TECHNOLOGY OFFICER TO FIND OUT THE COST AND MEASURES
- FIREWALL UPGRADE AI ACCESS CONTROLS TRAININGS FOR STAFFS
- NEW IT SECURITY CONTROLS
- IT COSTS RELATED TO CYBERSECURITY BREACH $2.5M = MATERIAL
- Phu advises Jingci to conduct interview with CTO to find out the actual costs related to new IT system update and the related measures put in place to prevent future cybersecurity breach.
- THESE COSTS ARE MATERIAL!
- DISCLOSURE OF ALL COSTS =TRUE AND FAIR VIEW
- During the interview, CTO informs that they have upgraded the firewalls, implemented stricter access controls with AI to increase monitoring, and implemented mandatory training for all employees as post-breach response measures.
- NO ADJUSTMENT = QUALIFIED OPINION
- From the interview, Jingci found out that the total cost for these was $2.5 million that changes the materiality of expense, assets and liabilities value.
- ALRIGHT! WE WILL ADJUST THEM!
- Phu and Jiaqi inform CEO and CFO that these costs are material and need to be reflected in the financial statements to present a true and fair view of company’s financial performance and position, and asked them to adjust the accounts.
- Phu and Jiaqi also inform that they cannot provide an unqualified opinion unless DBA adjusts these accounts comprehensively.
- CEO and CFO finally agree to reflect all costs and make adjustment of their 2023 financial statements.
- AUDIT REPORT ON 2023 FINANCIAL REPORTS OF DBA BANKUNQUALIFIED OPINION
- After assessing the adjusted accounts, DPNJ evaluateS the going concern of DBA due to recent cyber security breach by checking if there is substantial amount of mitigating factors.
- SIGNIFICANT LOSSES DUE TO BREACH ANY LOSS OF SIGNIFICANT CUSTOMERS VIABLE FINANCE OPTIONS NEW LONG TERM LOANS AMOUNT ABILITY TO PAY BACK LOANS
- CFO provides annual general meeting notes that DBA will be raising new funds via share issue, government funding confirmation letter and guarantee letter from the parent company, BHS Group Limited, as mitigating factors document evidences.
- ANNUAL GENERAL MEETING NOTES
- GUARANTEE LETTERBHS GROUP
- GOVERNMENTFUNDING CONFIRMATION
- After thorough assessments and evaluations, DPNJ concludes that DBA will remain in business for foreseeable future, provides the unqualified opinion and signs off the audit report for 2023 financial statements.
- THE END.
- The end.
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