In the present era, it is important for the companies to focus on maintaining the transparency. It is necessary to transmit all the data to the shareholders through the annual reports. One of the information is related with the audit function. It has been investigated that annual report should consider the information related to the auditors. The content should be stated in the clear words in context to the declaration which is made by Deloitte Touche Tohmatsu Limited about his independence and also of the remuneration which is paid to the auditors, any type of the non- audit services, formation of the audit committee along with the audit charter and also it is important to consider the audit matters that can be seen in the audit report. All the data should be expressed by considering the management affirmation.
In this report, the emphasis will be given on the independence of the Deloitte Touche Tohmatsu Limited and non-audit services, the functioning related to auditing, the duties and material information to bifurcate the audit matters and also the responsibilities related to JB HI-FI. The matter related to auditor has also been highlighted with the audit functions and also the operation of the auditors (JB Hi Fi Company, 2018).
It has been analyzed that auditors express their independence declaration to the management of JB HI-FI. It is also related with the auditors who have no intention and also focuses on the considering the regulations related to Corporations Act 2001 and professional code of conduct is also taken into consideration. It has been seen that declaration is given according to the belief and knowledge. The function of the auditor is to focus on the compliance program which has been offered by the audit report of the organization. It is evaluated that the audit committee employed in JB HI-FI is taken so that it can be easy to analyse the accurate view of assets and also the liabilities which are recorded in the books of accounts (Aschauer, and Quick, 2018).
Also it has been analyzed that explicitly which is highlighted in the annual report of JB HI-FI has focused on exploiting the potential of the auditors. This can be done by focusing on professional aid related with the auditors on the basis of non-audit matters. In relation with the auditor interdependence it has been stated that the satisfaction related to the auditor and risk committee should not be left as it can affect the interdependence of the auditors. The program related to tax compliance and audit functions are also considered to evaluate the auditor’s performance to explicit the overall fairness related with the information which is recorded. By emphasizing on the non-audit services it has been seen that there are various principles that are set by APES 110 Code of ethics for professional accountants which are set in relation to the interdependence of the auditors. So, the list which is related to the non-audit services is stated below like tax compliance and also different services (Yee, Sujan, James, K. and Leung, 2017).
All the non-audit services provided by the auditors are of revenue nature.
The remuneration which is given by the auditor consist of the payments which are made to the lead the auditor and also it is concerned with the practices of the audit companies that are not concerned with the lead auditor. The structure of remuneration consists of the payments that are received by the auditors and also it focuses on receiving the non-audit services to JB HI-FI Company (JB Hi Fi Company, 2018).
|
Amount of remuneration given to Deloitte Touche Tohmatsu Limited |
2018 ($) |
2017 ($) |
% change |
|
1. Audit and assurance services offered by the auditors to company |
271.25 Million |
254 Million |
6.72% |
|
2. Other services provided by Deloitte touche Tohmatsu Limited (JB Hi Fi Company, 2018). |
507.25 Million |
513 million |
-1.13% |
|
Total |
32201 |
30552 |
5.40% |
It has been seen that organization has implemented the audit and risk committee. JB HI-FI has also implemented an audit committee charter which states that all the committee and charter are involve in evaluating the risk which is also related to the financial statements (Stueart, Robert 2008).
The structure of the Deloitte Touche Tohmatsu Limited is considered by focusing on the non-executive and executive auditor of the company. There are various auditors who are involved in evaluating the annual report and it states that how well organization has maintained proper harmonization in relation to international and domestic standards of accounting (JB Hi Fi Company, 2018).
The basic functions and responsibilities are related to offer recommendations so that corporate reporting can be made in context to the entity acceptable by the specified framework. Also it is recommended that to appoint and remove the auditors who are independent from the undertaken work and also the program of auditor. It also focuses on analysing the overall values. Auditors are also offering non audit services like insurance coverage information and also the evaluation of accounts so that it can be complied with international and domestic financial reporting standards. It has also been recommended that it is important to consider the appointment and also the removal of the external and independent auditor. Also the external auditor focuses on efficiency related with the appraisal in the financial statements (Aschauer, and Quick, 2018). To act as the fiduciary individual for the stakeholders so that they can offer transparent information related to the financial statement of the organization (Meckfessel, and Sellers, 2017).
It has been seen that Deloitte Touche Tohmatsu Limited has showcased the opinion which is unmodified of the JB HI-FI. In their views and according to the audit procedures it has been seen that financial statements are related with provision of the corporation act 2001. The auditor also stated that they have finished the independence need which is expected out of them in relation to the auditor. It has been mentioned in the audit report that the needs of ethical lay by APES 110 Code of Ethics for Professional Accountants have been implemented. The auditor opinion states that JB HI-FI has complied with all the procedures and made the overall financial statement disclosure. The auditor also stated that stakeholders should focus on the financial investment decisions. It will also help to boost the confidence on the annual basis and also on the financial statement which are related and given by the Deloitte (JB Hi Fi Company, 2018).
The Deloitte Touche Tohmatsu Limited has given his opinion that company has no disclaimer in its legal compliance program. The non-qualified audit report is given by the auditor shows that company has complied with the applicable laws and regulation. However, the assertion test reflects the disclaimer that impairment loss recorded in the books of account might vary due to the certain assumptions and variation taken by company (Clark, et al. 2017).
There is several key audit matter which needs to be undertaken by the Deloitte Touche Tohmatsu Limited. There are some of the cases which have been considered as key audit matter in the auditing functions of the auditors (Yee, Sujan, James, and Leung, 2017).
Deloitte Touche Tohmatsu Limited need to assess that the impairment testing implemented by the company has been done as per the AASB 136. It helps auditors to identify whether the identified impairment loss is properly determined or not as per the applicable rules and regulation (Tepalagul, and Lin, L., 2015).
The business acquisitions of the JB Hi-Fi Company have been made with the other small organization (Wu, Hsu, and Haslam, 2016).
Certain factor is undertaken by the auditor of company to evaluate the transparency of the business (Yew Wong, 2015).
Director’s Responsibility
The main responsibility of the director is to prepare the financial statement of company. They make sure that company has complied with the applicable corporation act 2001 and Australia listing rules and regulation. They also need to make sure that company is growing and sustainable in long run (Kowaleski, Mayhew, and Tegeler, 2018).
Auditor’s Responsibility
The auditor is the person who acts in the best interest of the organization. He is the person who undertakes the assertion test to identify the fairness of the recorded assets in the books of accounts of company (Beardsley, Lassila, and Omer, 2017). The main responsibility of Deloitte Touche Tohmatsu Limited is to keep the business transparent towards the company’s stakeholders and strengthen the sustainability of the organization in long run. It is analyzed that auditors need to identify the issues and misstatement given in the financial statement of company. After analysing the facts and issues in the financial statement of the audited company, he needs to disclose the same in its audit report (Chan, and Vasarhelyi, 2018). It is considered that auditors need to pass the audit report on the financial statement of company so that stakeholders could trust and determine that company has reflected true view of the recorded assets. He also advises management of company to set up harmonization in its domestic and international reporting frameworks (Meckfessel, and Sellers, 2017).
Material Subsequent Events
The main material subsequent events of the JB Hi-Fi Company have seen is based on the undertaken strategic approach and strategic alliance of the company. It is analyzed that the profitability of company has gone down and reflected negative business outcomes. This has happened due to the increased investment in its operating assets and low amount of return on capital employed (Stueart, Robert. 2008). In addition to this, company has also faced high employee turnover which resulted to the destruction of the business in long run. It is analyzed that company has to lower down the cost of its production if it wants to survive in the long run. The changes in directors will also destruct the business and will negatively impact the business growth in long run (Aschauer, and Quick, 2018). There is no material information which is missing in the report of company.
Follow up question
The main follow up question is that management needs to reflects whether they have shared MRL (management representation letter with the auditors or not.
Conclusion
This study has revealed all the required information and audit and assurance program undertaken by the auditors in the best interest of the stakeholders. Auditors of the company have analyzed all the applicable rules and inherent risk in the prepared financial statement of JB Hi-Fi Company. Being interested third party stakeholders, as per the auditor opinion, company has complied with the applicable laws and regulations and maintained sustainable business practice in long run. It is analyzed that the auditor independences has also show that auditors has no relation with the company and given their opinion on the basis of the undertaken work and shown that company has complied with the domestic and international rules and regulation. Now in the end, it could be inferred that company has set up strong compliance program and also strengthen the listing rules and regulation in determined approach. Both auditors and directors have discharge their responsibilities and delivered the best outcomes to the concerned stakeholders.
References
Stueart, Robert D. (2008), “Human Relations in Library Education: Relationships Among Colleagues,” IFLA Journal 15 no. 2(3) pp. 271-283.
Chan, D.Y. and Vasarhelyi, M.A., 2018. Innovation and practice of continuous auditing. In Continuous Auditing: Theory and Application, 2nd ed Australia: Emerald Publishing Limited.
Chan, D.Y., Chiu, V. and Vasarhelyi, M.A. eds., 2018. Continuous Auditing: Theory and Application.3rd ed Australia: Emerald Publishing Limited.
Barr-Pulliam, D., Brown-Liburd, H.L. and Sanderson, K.A., 2017. The Effects of the Internal Control Opinion and Use of Audit Data Analytics on Perceptions of Audit Quality, Assurance, and Auditor Negligence. . 2(3) pp. 71-83.
Yee, C.S., Sujan, A., James, K. and Leung, J.K., 2017. Perceptions of Singaporean internal audit customers regarding the role and effectiveness of internal audit. Asian Journal of Business and Accounting, 1(2), pp.147-174.
Clark, C.H., Hurkmans, C.W., Kry, S.F., of Radiation, T.G.Q.A. and Group, T.C.T.H., 2017. The role of dosimetry audit in lung SBRT multi-centre clinical trials. Physica Medica, 44,(2) pp.171-176.
Tepalagul, N. and Lin, L., (2015). Auditor independence and audit quality: A literature review. Journal of Accounting, Auditing & Finance, 30(1), pp.101-121.
Vangelisti, A.L., (2016). On the importance of communication research. Communication Education, 65(4), pp.501-504.
Worth, R. (2009). Communication skills 1st ed, New York: Ferguson.
Wu, C.Y.H., Hsu, H.H. and Haslam, J., (2016). Audit committees, non-audit services, and auditor reporting decisions prior to failure. The British Accounting Review, 48(2), pp.240-256.
Yew Wong, K. (2015). Critical success factors for implementing knowledge management in small and medium enterprises. Industrial Management & Data Systems, 105(3), 261-279.
JB Hi Fi Company, 2018 retrieved, Available at https://investors.jbhifi.com.au/annual-reports/. Accessed on 19th June 2018
Kowaleski, Z.T., Mayhew, B.W. and Tegeler, A.C., 2018. The Impact of Consulting Services on Audit Quality: An Experimental Approach. Journal of Accounting Research, 56(2), pp.673-711.
Beardsley, E., Lassila, D. and Omer, T., 2017. How Do Audit Offices Respond to Audit Fee Pressure? Evidence of Increased Focus on Nonaudit Services and Their Impact on Audit Quality. . 2(3) pp. 271-283.
Meckfessel, M.D. and Sellers, D., 2017. The impact of Big 4 consulting on audit reporting lag and restatements. Managerial Auditing Journal, 32(1), pp.19-49.
Aschauer, E. and Quick, R., 2018. Mandatory audit firm rotation and prohibition of audit firm?provided tax services: Evidence from investment consultants’ perceptions. International Journal of Auditing. . 1(3) pp. 27-83.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download