1 HI6026 Audit, Assurance and Compliance Trimester 2 2018 Individual Assignment Assessment Value: 20% General Instructions: 1. This assignment is to be submitted in accordance with the assessment...

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1 HI6026 Audit, Assurance and Compliance Trimester 2 2018 Individual Assignment Assessment Value: 20% General Instructions: 1. This assignment is to be submitted in accordance with the assessment policy stated in the Unit Outline and Student Handbook. 2. It is the responsibility of the student who is submitting the work, to ensure that the work is in fact her/his own work. Incorporating another’s work or ideas into one’s own work without appropriate acknowledgement is an academic offence. Students should submit all assignments for plagiarism checking on Blackboard before final submission in the subject. For further details, please refer to the Unit Outline and Student Handbook. 3. Maximum marks available: 20 marks. Refer to marking rubric for marking criteria. 4. Assignment should be of 2,500 words. Please use “word count” and include this in the report. Presented in Calibri font size 12. 5. Due date of submission: Week 9, Friday at 12.59 p.m. Topic: How is Enhanced Auditor Reporting being embraced in Australia? Background and Context: Since 2016, there has been a strong push to improve the quality of audit reporting. Listed entities now have to report on “key audit matters” and improve the way material information is communicated using “plain English”. As mentioned in the CPA Australia podcast “How is Enhanced Auditor Reporting being Embraced around the Globe?” (available at CPA Australia website): 2 “The IAASB’s new auditor reporting requirements commenced in December 2016. Standard setters in many jurisdictions, including Australia and New Zealand, have issued the new requirements with the same effective date, whilst others have committed to issue the standards but have not yet done so. The UK have had similar requirements in place since 2013 and some firms in other countries have early adopted the IAASB’s requirements. Jim Sylph, Co- chairman of the IAASB’s Auditor Reporting Implementation Working Group, and Merran Kelsall, IAASB member and AUASB Chairman spoke to CPA Australia about the uptake and impact of enhanced auditor reporting around the globe.” Refer to the links below and listen to the podcast before you commence the assignment. http://directory.libsyn.com/episode/index/id/4886297 www.cpaaustralia.com.au/professional-resources/audit-and-assurance/auditor- reporting http://www.auasb.gov.au/Publications/Auditor-Reporting-FAQs.aspx Research Assessment: Download an annual report of an ASX listed company that is in the S&P/ASX 300 list. Review all the sections within the selected company’s annual report, which relate to the Auditor’s role in providing assurance over the entity’s financial statements and control environment. Students will need to review and analyse the following key areas included in the company’s Annual Report:  Auditor’s Independence Declaration  Independent auditor’s report  Non-Audit services performed by the Auditor  Auditors’ remuneration  Role, functions and composition of the Audit Committee  Independent Auditors report to the members (shareholders)  Review all Key Audit Matters noted and the associated audit procedures http://directory.libsyn.com/episode/index/id/4886297 http://www.cpaaustralia.com.au/professional-resources/audit-and-assurance/auditor-reporting http://www.cpaaustralia.com.au/professional-resources/audit-and-assurance/auditor-reporting http://www.auasb.gov.au/Publications/Auditor-Reporting-FAQs.aspx 3 Required: Based on your analysis of the auditors’ sections and other areas pertaining to the auditor, as included within the Annual Report, submit a report which summarises and evaluates the auditor’s assurance services performed for the client company. As part of your review of the assurance services provided, consider the following:  Has the auditor complied with Independence requirements?  If there were non-audit services provided, what was the nature of such services?  Provide an analysis of the Auditor’s remuneration in a table with prior year comparisons. Include percentage changes and explanations of the remuneration.  In relation to the key audit matters, which audit procedures were performed to provide assurance over each matter? Summarise and paraphrase each key audit matter. Correctly classify each audit procedure listed as: tests of controls, substantive tests of detail, substantive test of balances or analytical procedures.  Is there an Audit committee? Are there any non-executive directors on the audit committee? Is there an Audit Committee Charter? If so, summarise the main points of the charter including: the structure, function and responsibilities of the Audit Committee.  What type of Audit Opinion was expressed?  How do the Directors’ and Management’s responsibilities differ from the Auditor’s responsibilities in relation to the financial report?  Were there any material subsequent events? If so, briefly outline them and paraphrase and summarise how they were treated.  As an interested third party stakeholder, make an assessment of the effectiveness of the material information reported by the Auditor in your conclusion.  Consider whether there is any material information which could be missing, under-reported and/or not fully explained or disclosed in an effective way for the intended users? 4  What follow-up questions would you ask the Auditor at the company’s Annual General Meeting? Report Structure: 1. Executive Summary  The Executive summary should be concise and not involve too much detail.  It should make commentary on the main points only and follow the sequence of the report.  Write the Executive Summary after the report is completed, and once you have an overview of the whole text.  The Executive Summary appears on the first page of the report. 2. Contents Page – This needs to show a logical listing of all the sub-headings of the report’s contents. 3. Introduction – A short paragraph which includes background, scope and the main points raised in order of importance. There should be a brief conclusion statement at the end of the Introduction. 4. Main Body Paragraphs with numbered sub-headings – Detailed information which elaborates on the main points raised in the Introduction. Each paragraph should begin with a clear topic sentence, then supporting sentences with facts and evidence obtained from research and finish with a concluding sentence at the end. 5. Conclusion – A logical and coherent evaluation based on a thorough and an objective assessment of the facts. Key information has been appraised from an analysis of the company’s annual report and supplementary research to support the final evaluation of the Auditor’s findings in the Annual report. 6. Appendices – Include any additional explanatory information which is supplementary and/ or graphical to help communicate the main ideas made in the report. Refer to the appendices in the main body paragraphs, as and where appropriate. 5 Additional Resources Reference Links: https:// www.charteredaccountantsanz.com/Auditor-Reporting-one-year-on (Enhanced reporting requirements review one year after introduction) https://www.cpaaustralia.com.au/~/media/corporate/allfiles/document/about/audit- risk-committee-charter.pdf (Sample Audit Committee Charter) https://www.intheblack.com/~/media/intheblack/allfiles/document/pdf- documents/enhanced-auditor-reporting-questions-and-answers.pdf (Enhanced Auditor Reporting. Live Chat: Questions and Answers) CPA Australia Podcast web-page for illustrative purposes is shown below: http://www.charteredaccountantsanz.com/Auditor-Reporting-one-year-on https://www.cpaaustralia.com.au/~/media/corporate/allfiles/document/about/audit-risk-committee-charter.pdf https://www.cpaaustralia.com.au/~/media/corporate/allfiles/document/about/audit-risk-committee-charter.pdf https://www.intheblack.com/~/media/intheblack/allfiles/document/pdf-documents/enhanced-auditor-reporting-questions-and-answers.pdf https://www.intheblack.com/~/media/intheblack/allfiles/document/pdf-documents/enhanced-auditor-reporting-questions-and-answers.pdf 6 Assignment Marks Allocation: Executive Summary (4 marks) Main Body of the Report (8 marks) Conclusion (4 marks) Spelling and Grammar (1 mark) Presentation (1 mark) Reference and Citation (2 marks) Total 20 marks Refer to the Individual Assignment Rubric below 7 HI6026 - Individual Assignment Marking Rubric Criteria weight Excellent Good Satisfactory Sub-standard Executive Summary 4 marks  Very effectively written synopsis with clear communication of the main points. (4 marks)  Competently composed synopsis with the main points communicated. (3 marks)  Synopsis is clearly written, but it is brief or has some errors. (2 marks)  Synopsis is deficient and poorly written. Too brief. (1 mark) Main Body Including Introduction 8 marks  Excellent. Well organised. Main points are logically ordered; sharp sense of structuring and arrangement of key information. Supporting details are specific to the main points and adequate facts and other evidence is provided and well - articulated. (7 – 8 marks)  Organised; but some main points are disjointed, incomplete or not correctly prioritised. Some details do not support the subject. (5 – 6 marks)  Some organization; main points are there but they are disjointed; Minor structuring issues. (3 – 4 marks)  Poorly organized; no logical progression; beginning and ending are vague. No structure. Lacks substance. No research noted. (1 – 2 marks) Conclusion 4 marks  Very well composed conclusion with a clear and logical evaluation with conclusive and persuasive statements based on an intelligent assessment of the evidence acquired. (4 marks)  Conclusion is logical and an evaluation is made, but there is some lack of evidence or depth of analysis, which would have improved the overall persuasiveness of the report. (3 marks)  Conclusion is noted and an evaluation is presented, but it is lacking in sufficient detail or supporting evidence. Requires more analysis and some proof-reading. (2 marks)  Conclusion is poorly written with no evaluation and no logical coherence. No evidence of analysis. Poor effort. (1 mark) Spelling and Grammar 1 mark  No errors. Well proof- read. Clearly edited and refined prior to submission. (1 mark)  Only minor errors. Needs some editing. (0.75 mark)  Numerous minor errors. Not proof- read or edited effectively. (0.5 mark)  Numerous major and minor errors which distract from understanding and clarity. Not proof- read. Not edited. Academic English level is low. (0 mark) Presentation 1 mark  Very well formatted with sub-headings, page numbers, appendices, and effective use of tables/graphics
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Answered Same DaySep 28, 2020HI6026

Answer To: 1 HI6026 Audit, Assurance and Compliance Trimester 2 2018 Individual Assignment Assessment Value:...

Aarti J answered on Sep 29 2020
139 Votes
How is Enhanced Auditor Reporting being embraced in Australia
Audit, Assurance and Compliance
Course Name
Course Date
Student’s Name
How is Enhanced Auditor Reporting being embraced in Australia    11
Executive summary
Auditing and assurance services are important as they help in presenting the true opinion about the company’s performance as well as the annual reports of the company. The requirement of the enhanced audit report is important as it presents the detailed opinion of the auditor about the financials of the company as well as their opinion about the reporting of the company. For this we have conducted the auditor report evaluation of one of the biggest company of Australia Woolworths. During the analysis we looked over different aspects of auditing that was conducted by the auditors and has been reported in the annual reports of the company. The reports takes into consideration the audit opinion of the company which states that the company has presented a true and fair picture and has not done any misstatement of the financial statements. The report also presents the key audit matters and the procedures that the auditors has taken to take care of the key audit matters which included the IT services, the accounting for rebate and Valuation of BIG W property, plant and equipment and consideration of onerous lease provisions.
Contents
Contents
Executive summary    2
Introduction    4
Auditing of Wesfarmers    4
Independence requirements    4
Non-audit services    4
Analysis of Auditor’s remuneration    5
Key audit matters    5
Audit procedures    6
Audit committee    7
Audit opinion    8
Difference in director’s and management responsibilities and auditor’s responsibilities    8
Material subsequent events    9
Assessment of effectiveness of the material information reported by the Auditor    9
Any material information missing    9
Conclusion    9
References    11
Introduction
With the increasing investors relations, the investors are seeking for greater transparency for the auditor’s responsibilities as well as the financial reports of the company. For this the auditors have the added responsibility for the analysing the financial reports of the company. In this report, we will be analysing the reports of auditor and other auditor’s responsibilities for Wesfarmers company. (thorton, 2018)
The auditing of the company has been done in accordance with the Australian Standards on Auditing or International equivalents.
Auditing of Wesfarmers
Independence requirements
The auditor of Wesfarmers is Ernst & Young. As per the auditor’s independence declaration auditors have audited the annual report of the company as per the Corporation Act 2001 in respect to the auditing and the auditors have followed any applicable code of the professional conduct in relation to the auditing done by the auditors.
The company had audited the reports which includes the analysis of the Consolidated Statement of Profit or Loss, the Consolidated Statement of Other Comprehensive Income, the Consolidated Statement of Changes in Equity and the Consolidated Statement of Cash Flows for the 52 weeks then ending on 30th June 2018. The auditors also audited the notes to the financial statements, including a summary of significant accounting policies, and the Directors’ Declaration. (Annual report, 2018)
As per the auditor’s opinion, the financial reports of the company gives a true and the fair view of the financial position and the company has prepared the reports as per the Australian Accounting Standards and the Corporations Regulations 2001.
The auditors had audited the reports in accordance to the Australian Auditing Standards in adherence to the Corporation Act 2001 and the ethical requirements of e Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code). The auditors have fulfilled all the responsibilities which were stated as per the corporation act 2001 as well as the ethical considerations. (Annual report, 2018)
Non-audit services
Ernst & Young provided non-audit services to the company which was for around 1026 thousand. The major non-audit services provided by the company was the services related to tax compliance. The non-audit services that was conducted by the company included the services which did not involve reviewing or auditing the auditor’s work as well as it was subject to the corporate governance procedures and policies that was adopted by the company.
Analysis of Auditor’s remuneration
    Auditors of the parent entity - E&Y
    Audit services
    2018
    2017
    Change
    % change
    Audit and review of financial reports
    
    
    
    
    Ernst & young (Australia)
    5761
    5723
    38
    0.66%
    Ernst & young (Overseas)
    812
    702
    110
    15.67%
     
     
     
     
     
    Assurance - related services
    
    
    
    
    Ernst & Young (Australian and overseas...
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