Writing Assignment Guidelines

WRITING ASSIGNMENT GUIDELINES

Assignment Passed Out: September 25, 2017

Assignment Due Date: November 6, 2017

Topic-Background:

As discussed in the early chapters of our text, auditors need to assess many risks when acceptinganewauditengagementordeterminingthatitisappropriatetoretainanauditclient for each subsequent year.

Thiswritingassignmentwill,therefore,beacasestudyforyoutoconsiderseveralof theserisksandtheplanningattributesforarealcompany;one thathappens tobeaclientof Haskell & White, and one where I currently serve as the EngagementPartner.

FennecPharmaceuticals,Inc.(“Fennec”or the“Company”),with its officialoffice locationlistedasbeinginResearch TrianglePark,NorthCarolina,asperitsAnnualReporton Form 10-Kfortheyear endedDecember31,2016,“isabiopharmaceutical companyfocusedon thedevelopmentofSodium Thiosulfate(“STS”)forthepreventionofplatinum-induced ototoxicity in pediatric cancer patients. We incorporated under the Canada Business Corporations Act (“CBCA”) in September 1996. Effective on August25, 2011, the Company continuedfrom theCanadaBusinessCorporationsAct to theBusiness CorporationsAct (British Columbia) (the “Continuance”).The Continuance was approved bythe shareholdersof Fennec at the Company's June 2011 Annual and Special Meeting and by resolution of the Board of DirectorsonAugust10,2011.Wehave threewholly-ownedsubsidiaries:Oxiquant,Inc. and FennecPharmaceuticals,Inc.,both Delaware corporations,andCadherinBiomedicalInc.,a Canadiancompany.WiththeexceptionofFennecPharmaceuticals, Inc.,allsubsidiariesare inactive.”

Fennec’s common stock trades on the Toronto Stock Exchange (Canada) under the symbol“FRX”and,sinceSeptember13,2017ittradesonNASDAQCapitalMarketinthe UnitedStatesunderthe symbol“FENC”. Prior toSeptember13, 2017,Fennec’sstocktraded in the United States on the OTCQB under the symbol “FENCF”.

Fennec’s filings with the SecuritiesandExchange Commission (SEC) canbefound at the SEC’swebsite through asearchoftheEDGARarchivesat

EDGARInstructions:Ifyougoto to EDGAR” box on the SEC’s home page. Atthe next page, you can begin by selecting and enteringtheCompany’snamewhichwillshowyoualist ofFennec’sfilingsonceyouselect “Search”.

Topic–Assignment:

AssumethatyouhavejustjoinedHaskellWhiteandareassignedtotheupcoming

2017 audit ofFennec Pharmaceuticals.

Inordertogetfamiliarwiththeentity,youarerequestedtoreadinformationonthe client. Ataminimum,yoursupervisorsaskyoutoreadthe mostcurrentAnnualReportonForm

10-K(year endedDecember31,2016,asfiledMarch29,2017),ProxyStatement (referencedas theDEF14A,asfiledMay24,2017),themostrecentcurrentQuarterlyReportonForm10-Q (QEJune30,2016,filedAugust14,2017)as wellasotherperiodic(Qs/Ks,etc.)and/or event reports(8-Ks)onfileas necessary. Fennecalso recentlyfiledaRegistrationStatementonForm S-1thatwasamendedasanS-1/AonAugust31,2017. Youmayalsofinditworthwhileto perform aGoogle,Yahoo,orothersearchtofindinformationonFennec. (Unfortunately,the Form10-QfortheperiodsendingSeptember30,2017isduetobefiled by November 14, 2017, just after this assignment is due.)

Basedontheinformationyoufindin theCompany’sfilings withtheSEC,and/orany otherresourceyoudeemappropriate(suchasindustry information,newsreports,company website,etc.)writeanarrativefortheplanningsectionoftheauditworkingpapersforthe

2017 fiscal year that discusses the following:

COMPANYRISKS

EnterpriseRisk/BusinessRisk–thoserisks thataffecttheCompany’soperationsand overallorganizationalactivities.Inpreparingthissection,youareprimarilytofocuson thenatureoftheCompany’sbusinessandtherelatedenvironmentalfactorswhichaffect it, and your perceptions of the inherent risk factors involved.

Information Risk– thoserisksof disseminatingmisstated informationtousersof the financialstatements. Inpreparingthissection,considerwhothepotentialusersareof Fennec’sfinancialstatements(known,foreseen,andforeseeable users–SeeTextbook ModuleC)andthoseareas thatmaybe(more)susceptible torisksin reporting. What areasmightrequirespecialattentionduringourauditsothatweminimizeourAudit Risk?

AUDITORCONCERNS

EngagementRisk–thoseconcernsthatwe,theauditorsshouldconsideraswereview our client retentiondecision for the 2017fiscal year-end audit. (Note that we just became theauditorsofrecordfor thequarter thatendedJune30,2017.) Havetherebeen any changesintheenvironmentsincewewereappointed?WhatfactorsshouldweatHaskell

Whiteconsiderin makingourretentiondecisiontocontinueonwith the2017 audit? Afterall,weneedtomanageourownBusinessRiskoncewehaveagreedtocontinue with the audit of Fennec – our first audit.

Materiality–themagnitudeofamisstatementoromissionthatcouldaffecttheuserof theCompany’sfinancialstatementsandrelateddata. Withouttryingtocalculateany “value”formateriality,discussyourobservationsabouttheCompanythatmayaffect yourviewsonthe“qualitativeaspects” that shouldbe consideredforthelevelof materiality tobeusedforpurposesofconducting theaudit. Consider those balances/transactioncyclesyouconsidertobesignificantaswellastrends,ratios,or otherinformationthatwouldhaveabearingonyourdetermination ofmaterialityfor purposes of the audit.

AuditRisk– therisk thatwecouldissuean unqualified/unmodifiedauditopinionon financialstatementswhichincludeamaterialmisstatement. Givingconsiderationto materiality(above),whatarethe specificareasonwhichwe shouldfocusto reduce our auditrisktoan acceptably low level?

Youarenotchargedwithreachingaconclusioninanyoftheseareasbuttoidentifythekeyitems affecting the decisions tobe made by your supervisors.

Guidance:

Papersshouldbeaminimumof4pages,typed,double-spaced(assuminga12-pitch font). Please do not find yourself writing more than 6 pages of narrative. While there may be many details and “sub-topics” you wish to discuss in your presentation, a better approach will be to focus on a few key topics with well-developed supporting discussion/arguments.

Yourpaperistobebasedonyouranalysesofthespecificconditionsof Fennecandyour knowledgeofauditinggained throughearlychaptersinourtext. Theconcepts weregenerallyintroduced in Chapters 1-4. However, you may find information useful in future class discussionsandor laterchaptersofthetext(someinformation forwhichIencourageyoutoread ahead). Your ideas need to be clearly identified and supportedthroughout your presentation.

Your paper should be presented in the format of a file memorandum.

Please note that while I have working knowledge of this Company, I cannot discuss anythingwithyouthatisnotpartofthepublicdisclosures. Shouldyouneedassistance understandingwhatyouarereadinginthepublicdocuments,pleaseask. Further,youcannot contact anyone at the Company or any other person at Haskell & White to discuss this project.

Grading:

Thisassignmentrepresents100 ofthepossible 500gradepointsforthisclass (20%)and therefore should be given appropriate attention.

Asnotedinthesyllabus,yourpaperwillbegradedforcoherence,conciseness,clarity anduseofStandardEnglish. Ofcourse,yourpapershouldadequatelyaddressthetopic assigned. Aformalbibliographyisnotrequired. However,ifyouquoteasourcedirectly(suchasanewsarticle,textbook,informationonwebsitesorothersources),yoursourceshouldbefootnoted,ataminimum. Yourworkshouldalsobeoriginal– notplagiarizedfrom newsarticlesorcopiedfrom classmates(afterall–ourprofessionisbuiltonthefoundationof ethics and integrity).

Now, a few words on the standards set at the outset of this paragraph.

Coherence– Requires that ideas be arranged logicallyin thatthe ideas arerelated.

Conciseness–Achievedbyusingas fewwordsaspossibletomakeyour point,while not omitting keyideas orsupportingarguments.

Clarity– Essentially,yourpapershouldbeunderstandableandreadable. Clarityrequires theuseofwordswithspecificandprecisemeaning. Simplesentencestructurewill assistwith both clarity and coherence.

StandardEnglish–Requires theuseofproperpunctuation,capitalization,spellingand vocabulary. Please use the spell and grammar check functions in your word processing software.

Due Date / Submission:

Papersaredueduringclassscheduledfor Monday,November6,2017. Inotherwords, papersareduebeforetheendofthescheduledclassonNovember16,2017(by9:45PM). Paperscanbesubmittedinhardcopyformorelectronically viae-mailtomydaytimeofficeat .

GradePenaltieswillbeassessedattherate of20%foreachdaythepaperislate. (Therefore–thebestgradeyoucan receiveisan80ifthepaperis1daylate,a60ifthepaper is 2 days late, etc.)

Sinceyouarereceivingthisassignmentwith6weeksofpreparation time,therewillbenoextensionsoftimegrantedtocompletethisassignment.