Analysis Of Key Audit Matters In The Annual Reports Of 5 Different Companies In Australia – 2017

Basis of Comparison

Dsicuss about the Auditor Declares The Particulars Related.

The key audit matter of the companies is the content of the auditor’s report in which the auditor declares the particulars related to the examination of the books of accounts of the company. These are the most significant portion of the audit which gives a view of the ways or methods in which the companies accounts for. This paper analyses the Annual reports 5 different companies on the basis of their audit report of the year 2017. This will further compare the Key Audit matter of the company with that it will find the similarity between the key audit matters and also focus on the uniqueness of the identical key matters of all 5 companies, recommendation will also be provided to the companies to improve their system of audit and will draw a conclusion about the financial standards of the company.

The companies that are being analyzed are one of the well-known companies in Australia which are well established in the market and authentic in there working capabilities. The Key audit matters of the firm are well established and declared by the auditor after proper auditing procedure followed to check the books of account

The firms are being compared on the certain basis of their size, performance, business activities and the audit firm.

Basis of comparison Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	Crown Resort	Donaco	G8 Education	Mantra Group Limited	Tats Group
Size of the company	The market capitalization of just over A$7.5 billion.	Market capitalization that is about A$ 182 million	A$ 448 million is the Market Capitalization	Market capitalization which is noticed to be A$ 3.93 billion	$ 6772 million which is the market capitalization of the company
Business activities	Its business revolves around entertainment and gaming. hotels, casino, and other entertainment facilities are there the main points of business.	Donaco’s successful boutique leisure and entertainment properties are strategically located and service the Chinese and Thai tourist markets.	Operates in the field of education, they provide in the country Australia education and child care services.	The business of luxury hotels resorts and apartments.	They operate in lotteries, gambling, and gaming.
Audit firm	Ernst & Young	Crowe Horwath Sydney	Ernst & Young	PWC	PWC

The crown resort uses a lot of evidence on the value which is paid for carriage of trade receivable other companies do not do so. It analyzes the aging of the receivable from trades of the company, evaluates the amount of the receipts of the company, assesses and analyze the customer’s group assessment, has a check on the operating effectiveness, Provisioning property of the group is assessed by the auditor. Goodwill, tangible assets, license intangible assets are well assessed. The Assumption of the cash flow forecast is assessed with the comparison of the achieved cash flow of the company. The audited financial report is reviewed by the auditors.

 The Donaco company auditors resolved the problems of decentralization of the work among companies’ subsidiaries to the company. These subsidiaries are to be assessed properly for abolishing the chances of misinterpretation of account. The number and the significance of the subsidiary companies are assessed and their entity that is consolidated, the recognized think that is identified as key audit matters especially the numbers of subsidiaries, variation in the nature of the operations that are taken by the subsidiaries, nature of the process, foreign currencies that are used in the different placements of the subsidiaries of the company. The matter is resolved by visiting, discussing, visiting component auditors and proper communication. The second thing that is done in recognition of the revenue for the casino revenue, where the audit was conducted by visiting, challenging the adequacy of the revenue that is recognized and lastly giving a throw check to see whether the consolidated firm is using the proper rules and regulation. The assets of the firm are imparted and assessed as the subsidiary entity casino recorded a license of $386.68 million as an intangible asset. The methodology of the subsidiaries is checked, assessment of the cash generating unit of the entity and the cash flow is reasonable or not. The obligatory payment that is made by the company is also a part of the Key audit material that is reviewed by the auditor.

Key Audit Matters of Crown Resort

G8 Education Company has a Relevance of the Key Audit matter on the ongoing with the business. Firstly, goodwill is impaired and assessed; the company follows AASB 136 of the Australian standards of accounting. The Group that impaired and assessed the goodwill consisted of two portions of which one is the segment that operates and second is the unit that generates the cost. Audit evidence is obtained for instances, the cash flow that is forecasted is agreed with the budget approved by the board. Group identification is evaluated, comparison of the forecast with the actual outcome of the present year of the company is done, assessment of the key assumptions is made, and consideration is made of the market capitalization. This total assessment is of the assumptions that were made on the basis of the companies Goodwill. A second thing that is done under the audit process is the Acquisition of the Accounting process. And the final process that is identified to be a part of the key audit mater is the revenue recognition of the firm.

Then comes the key audit report of the Mantra Group consist of mainly 4 points of concern. Firstly, recognition of goodwill or other intangible assets those is assessed. Secondly, Intangible assets as well fixed assets that are to be recovered. Thirdly, Acquisition Of the subsidiary company that is the Ala Moana company which is taken into consideration. Finally, the revenue of the firm is recognized.

Lastly, The Tatts Group follows 4 heads under the essential key audit mater relevant to the process of audit. The first part of key Audit matter is the group’s impairment and assessment, secondly the most common matter that is the revenue recognition for the wagering and the lottery business of the company, then comes the special key matter that is the deductibility of the tax of the firm for conducting proper monitoring of the licenses and the rights.

Crown Resort includes a uniqueness in its key audit matters which the other companies do not do in the process of audit that  carries value of trade receivable, in this key audit key matters  the thinks that the auditors disclose is that the auditor conducts  a testing of the amount that is received while proceeding with the process of trade or trade receive able, the receipts of the firm is evaluated, the group assessment is evaluated and along with that the design of the effectiveness of the assignment is  assessed, the historical payments that are made by the costumer and their habits of doing so is considered.

Key Audit Matters of Donaco Company

Donaco Company has uniqueness in its key survey maters in connection with the other four firms is the evaluation of the Obligatory portions which is given by the Held converses with the part assessor and organization, and asked about the obligation responsibility in respect of the betting club business in Cambodia to get a cognizance of the compulsory portions. Gotten correspondence with the MOEF essential to gaming and non-gaming responsibility portions and conditions associated with the pay force liabilities (duty portions). Gotten a legitimate certification on the going with there is no Casino Law in respect of betting club charges has been broadcasted. The required portion included settled gaming charge and settled non-gaming charge. DNA Star Vegas Co. Compelled is under a Lump Sum survey organization on its gaming and non-gaming benefit until the point that the moment that another law on wagering is passed.

G8 Education Company The auditor of the G8 company does not follow any unique way of auditing that should be declared in the key audit matter where is the company in general like all other companies do follow the three major steps of key audit material that is firstly impairment of assessment of goodwill or can be said to be the assessment of the intangible assets and its impairment secondly the accusation of the accounting statements and third and the last thing that is done by the auditor of the G8 company recognition of the revenue of the company which is done by all the other four companies whose annual report is being compared in this paper so it can be said that the G8 education company’s annual report does not contain any unique features on that k an n which is a part of the auditor’s declaration and is not very specific way of conducting is the audit is conducted by using the common method of Sachi audit matter that places not strong as the other company matter.

Mantra Group recoverability of fixed assets is the main uniqueness. The mantra group considered and its assessments along with evaluating the flow of cash of the company the fixed assets of the company is also evaluated this is the unique portion that is included in the key audit matter of the form which helps in the assessment of the companies fixed assets so that the balance sheet is evaluated Better by the auditor and a true and fair value of the company is exhibited in the annual report which will conduct or convey proper and authentic accounting information to the internal and external users of accounting information.

Key Audit Matters of G8 Education Company

The Tatts Group utilizes an interesting strategy in their key review matters that is the expense deductibility of installment for observing rights and permit

• assess balances related with the installments for observing rights and licenses included, among others:

• Examining, in conjunction with PwC assess specialists, position papers, correspondence, and guidance between the Group, its counselors, and the Australian Taxation Office

• Examining the significant legally binding terms related with the observing rights and retail selectiveness permit assertions, and utilizing our comprehension of duty law and other important direction and case law to evaluate the accessible confirmation and the positions taken by the Group.

Every company has its own style of discloser of the key audit statement so they are different from each other this differences at times categories the strength and weakness of the auditor’s report. The 5 companies’ auditors are different and their ways of discloser are according to the requirements.

Right at the start, the crown resort uncovers its key audit mater under four heads with assertion of examination of fore cast of the associations Identify and overview the threats of material misrepresent of the money related report, Obtain an understanding of inside controls noteworthy to the survey remembering the true objective to design survey systems that are fitting in the conditions, Evaluate the reasonableness of accounting approaches used and the sensibility of accounting checks and related disclosures made by the boss, Conclude on the fittingness of the administrators’ use of the going concern introduce of accounting Conclude on the respectability of the manager’s use of the going concern prelude of bookkeeping, Evaluate the general introduction, structure and substance of the budgetary report, joining the exposures.The revelations in this Report have been inspected.

The report is displayed in the accompanying areas as the piece of the discloser:

1. Presentation

1. Diagram of Remuneration Policy

1. Rundown of Senior Executive Remuneration Structure

• Fixed Remuneration

• Performance-Based Remuneration

1. Subtle elements of Performance-Based Remuneration Elements

• Short-Term Incentives

The organization likewise displayed the report similarly

• Long-Term Incentives: 2014 Crown Long-Term Incentive Plan and 2017 Senior Executive Incentive Plan

1. The connection between Remuneration Policy and Company Performance

• Remuneration connected to execution

• Policy on going into exchanges in related items which confine monetary hazard

1. Compensation subtle elements for Non-official Directors

1. Compensation subtle elements for Senior Executives

The Donaco global organization uncover its review under the accompanying headTesting the feasibility of the disclosers of the different company

After analyzing the key audit matter It is seen the audit done in the five companies namely the Crown Resort the Donaco Company the G8 education company the mantra group and finally that Tatts group. Their accounts have been audited by renowned auditing firms like the PWC the NY Company audit and the Crowe Horvath Sydney auditing firm. These companies have audited and declared the system of Audi within the framework of the key audit matter which is adequate to understand the companies accounting information and also the financial stability of the respective companies the main objective of preparing a financial audit report of certain firms is fulfilled by the disclosure of the key audit method which is done by the respective audit companies who have audited the accounts of the profit making companies they have established proper identification assessment and integrated way of Investigation of the accounting reports of the firm and by doing so have provided analytical reports with giving due respect to the

Key Audit Matters of Mantra Group

accounting standard setter followed in Australia these companies have successfully used the team audit matter to disclose the system of audit and prove it to be feasible on being the part of the annual report of all the companies the point covered in the key audit matter such as the revenue recognition it application and control due respect to the taxation paid the intangible assets valuation of the investments of the company acquisition of certain things valuation of the property and the cash equivalents as well as the Inventory of the company is well done in the audit report by the company they are feasible and can be understood by any common users of accounting information.

Consideration how Key audit matter are resolved ISA 701 incorporates a ‘judgment-based basic leadership structure’ to help inspectors in figuring out which matters ought to be imparted as Key audit matters. This system might be delineated as takes after:

1. a) Matters spoke with the vital accusations of administration: The presentation of the key Audit maters isn’t proposed to adjust the extent of the review. KAM is resolved from those issues that the auditor has spoken with those accused of administration in the typical course of the review.
2. b) Those issues that required critical evaluator consideration in playing out the review Indications that an issue might be an issue that required huge examiner consideration in playing out the review is:

• The matter postured difficulties to the inspector in acquiring adequate fitting review prove

• The matter postured difficulties to the inspector in shaping a feeling

• The matter included troublesome or complex examiner judgments of zones of unpredictability and huge administration judgment in the budgetary explanations, bringing about the inspector’s general review procedure, asset distribution and degree of review exertion being influenced

An examiner figures out which matters, from those that have been spoken with TCWG, required critical reviewer consideration in playing out the review by considering the accompanying: I) Areas of a higher surveyed danger of material error, or critical dangers The reviewer recognizes and evaluates dangers of material misquote of the budgetary explanations and designs and performs review techniques because of evaluated hazards in the ordinary course of a review. ISA 315 (Revised), Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment, characterizes critical hazard as a distinguished and evaluated the danger of material misquote that, in the reviewer’s judgment, requires unique review thought.

1. ii) Areas in the money related proclamations that included critical administration judgment The examiner considers zones of noteworthy administration judgment and along these lines huge evaluator judgment, including bookkeeping gauges having high estimation vulnerability (for instance contingent upon the conditions of a particular substance, debilitation of generosity or the reasonable estimation of a specific budgetary instrument).

iii) Significant occasions or exchanges that happened amid the period The impact on the review of noteworthy occasions and exchanges amid the period may require huge evaluator consideration. Huge occasions and exchanges may incorporate noteworthy exchanges with related gatherings, critical exchanges outside the ordinary course of business and unordinary exchanges.

1. c) Those issues of most noteworthiness in the review of the monetary explanations of the present time frame The last advance in deciding KAM is choosing from (b) over, those present period matters that were of most centrality in leading the review. This involves proficient judgment and might be influenced by the size and unpredictability of the substance, the nature of its business and condition, and the certainties and conditions of the review engagement (that is, element particular or review particular components may impact the examiner’s judgment). Regardless of whether the issue included various isolated, however related, inspecting contemplations.

The portrayal of each KAM must incorporate :

• Why the issue was thought to be a standout amongst the most huge in the review and subsequently a KAM, that is, the elements considered
• A reference to any related exposures in the budgetary proclamations to upgrade planned clients’ comprehension of how administration has tended to the issue in setting up the monetary explanations, and
• How the issue was tended to in the review, for instance, portrayals of the inspector’s approach, a concise outline of systems, result and key perceptions, or a blend of these

Matters offering ascend to an altered conclusion or a material vulnerability with respect to going concern are by their inclination KAM. The examiner should take mind that the dialect utilized as a part of the depiction of KAM:

Conclusion

After analyzing the annual report of all the companies it can be seen that the key audit matter represents various methods of auditing which is relevant to the auditing process as well as the activities related to the company. They are made feasible so that accounting information becomes easy for the users of accounting information to understand and take the decision as per the understanding of performing investing activities.