This audit report of the complaint Woolworth Ltd needs to be analysed for detailing the perspectives and the aspects that are stated in the report for making evaluation the audit reports (Zhou, Simnett and Green 2016). It would also enable to make identification of the financial status of the business entity that keep a note on the audit reports. The key factors can be essentially considered for the evaluating the company’s annual reports that comprises of the non-audit and the audit Services that is provided by the company’s audit committee, the auditing key factors, the auditors remuneration reports, effectiveness and intense materiality of the company audit report and the financial opinion that is generated from the audit reports.
Auditing within a business firm needs to be done for recording the statutory data of the company through a systematic and independent manner. All the records of finance and voucher along with documentation that is related to the company’s financial activities are strictly considered while laying down the audit reports. The main focus of the audit data reporting is based on the disclosing the non-financial and financial statements of the business entity to the organisation’s stakeholders (Stewart, Kent and Routledge 2015). It is required for ensuring for meetings the legal obligations that needs to be performed with all considerations.
The independent requirements of the company’s auditor can be stated in the Corporation Act 2001. In the act of understanding the independent requirements of auditing the certain types of key legislations can be taken into main consideration. The divisions that consists of 3,4,5 and under the section 307C under the Corporation Act 2001, the APES 110 Code Of Ethics and the standards of auditing ASQC 1 and the auditing standards ASA 220. All the provisions are mainly required for evaluating the auditing independence for the business entity’s auditors. In the other aspects, the company auditors must also work upon independently in the real terms of interest conflict and bring upon rotational relief after independent applying the required safeguards for the threats that are upcoming and is required at the same time (Soh. and Martinov-Bennie 2015).
It is very essential to bring upon the declaration that is given by the auditors. It is stated by the auditor by making the preparation of the following proper requirements that is stated under the Corporation Act 2001 is regarding the company auditor’s Independence. These are following declarations that are made by the auditor for disclosing all the requirements for initiating the process of Audit report preparation of a business entity (Simnett, Zhou and Hoang 2016).
The Deloitte Touche Tohmatsu’s company auditors have essentially provided with some of the services that are related to non-auditing services of the company in the financial year. It needs to be specifically stated that the non – auditing services may be provided by the auditors for not compromising the legal obligations but achieving the structure that is mentioned under Corporation Act 2001 that deals with Code of Ethics APES 110. The ethical coding that are stated by the Accounting Professional and the Corporate Ethical Standards Boards are mentioned with relevance. The various kinds of non – auditing services needs to be provided by the company auditors that is limited within the area of work and this makes the non-audit service does not constitute any such conduct that is not at all relevant to the ethics of auditing. Even the company management does not interferes or review the reports of audit that are published themselves by the company of the Auditors in accordance to the stated suggestions and the proper ethical regulation. The company auditors also works as company advocates for each of the financial year pointing all the risk along with the rewards of the company. The company auditors also provide unique kind of consultations that are quite essential for settling the financial issues of the business entity that is not at all associated with the audit reports and the various company accounts matters. It also relates to the assurance services that is related to debt raising, company regulatory reviews along with certain sundry services and financial diligence in due (Simnett, Carson and Vanstraelen 2016).
Deloitte Touche Tohmatsu’s is the main auditor of the company. The firm is located in the city of Sydney, New South Wales and is much associated with the company for last few years (Simnett. and Huggins 2015). The company’s auditor has been working with full dedication for the company’s welfare while properly maintaining the independent requirements while managing the professional conduct that is completely related to audit. Few partners name must be kept apart, among them Andrew V Griffith who is the auditing partner of the auditor Deloitte Touche Tohmatu. Mr. Andrew is basically the company’s Chattered Account and has collaborated as a working member with DIT for the last few years.
To be specific enough the, the company’s auditing committee is having two personals who are working for the company as company auditors (Sarens 2015). Deloitte’s remuneration was allocated for specific auditing purpose and the review of the company’sfinancial report that amounted $ 3254000. The amount allocated for the specific regular and service related to compliance that amounted to $ 12900 for the fiscal year of 2017. The total number of amount is $ 421000 that was allocated to auditors for the payment for the related service of non-audit service on providing assistance to various types of accounting matters and the assurance in relation to the regulatory reviews and the financial due diligence and the other services related to sundry. The last instance, the sum was $ 108000 that got allocated to the auditors as specific remuneration for the compliance services on tax (Rahim and Idowu 2015).
Apart from Deloitte’s, the other auditors of the business organisation claims to be the international associates who are the only auditors of the organisation. Even for compensation, the company’s auditors who are serving Woolworth in the profession of auditor, a sum of about $305000 got allocated for reviewing the company’s financial report and auditing the most essential and necessary data for the organisation. The total amount that was sanctioned for the auditor’s of the company was for executing the non-auditing services was estimated to be around $ 154000. The amount was rewarded to the auditors for meeting the tax compliance. Deloitte Touche Tohmatsu received an amount of about $ 3912000 and the other company’s auditor received $ 5420000 as a auditing compensation.
The main judgements based on professionalism are termed to be most significant in the context of auditing for the company’s financial report. The key essentialities are mainly the result of the main auditing that is done by the company auditors upon the opinions that are discussed completely separate in the reports of auditing (Moroney and Trotman 2016).
The audit matters are discussed below:
The main reason for evaluatingthe audit report was to provide a fair and true evaluation of the company’s financial position by maintenance of all the all the regulatory acts that are based on the Australian Accounting Standards and the sections of Corporation Act 2001. The auditing report of the business entity was produced mainly for the provision stated in the AAS. It is the responsibility of the company auditor for practicing the code of ethics for Professional Accountants. The independence of the auditors can be allocated under the Corporation Act 2001 and the other kind of auditing responsibilities that needs to be performed according to the code of ethics. All the ethics can be declared as independent declaration that can be maintained along with proper and stable guidelines that is stated appropriately in the company legislations (Knechel and Salterio 2016).
The company directors are highly obliged with the individual responsibility for preparing reports of company finance (Kend 2015). It can be prepared by maintaining a proper and stableaccounting integrity that is mentioned in the Australian Accounting Standards and the section under the Corporation Act 2001. The basis internal controls that strives within the management of the company lies mainly in the hand of the managing director. All the controls and the various types of policy distribution can be only implemented by the company directors for facilitating the financial reports that has some true and fair values. Even the disclosures can be made on certain matter only by the company director only by the means of accounting structure. There are certain kind of exceptions that the directors go for liquidation intentionally that cease upon some particular kind of operation.
The main responsibility of the auditors is based on the action to figure out the basis of the financial reporting of the company (Kend and Basioudis 2017). It is notified that whether the reports have been presented by the company directors and is completely free from any kind of misstatements. The company auditors also need to establish a ground that provide adequate reasonable assurances that presents the reports that are free from aspect of any kind of fraudulent activities or errors. There must be a reasonable assurance that must be provided by the company auditors. Basically in the terms of providing at least a minimumguarantee for adequate material detection and conditions of material misstatements in accordance to the specific terms of the Australian Accounting Standards. It is quite difficult to meet up to all the aspects of the company’s financial statements. It can be considered that for considering a condition of material misstatement that may arise situations like fraudulence or even error in individual case, the aggregate that very much influence the all over decision that need to be taken by economic intervention by the business entity. It must be noted that the company’s decision and the misstatement is directly liable to the company’s directors and they are all responsible for the preparation of the financial report of the concern (Junior, Best and Cotter 2014).
On considering the general curriculum of Audit, there were some kind of subsequent auditing that occurred in the ending of the company from the ideals of home improvement business. In the year 2017, the company went into an agreement for shares selling to Hydrox that estimates to be around the total of 66.7% that also constitute the total amount of share for Home consortium that subjects to the result of selling the share of Lowe’s. The agreement sales contains about 40 Freehold Master trading sites and about 21 freehold master development sites along with 20 master’s sites of leasehold. The three master freehold sites was actually effort and acquisition of Woolworth as well as the company looks the responsibility for all the assumption that is associated with about 11 leases. Even in the same fiscal year, Lowe’s in Hydrox was sold off to the trust as a beneficiary for a return of $ 250.8 million along with home consortium. In the case, JVA got terminated. The agreement made with Hydroxled to crystallisation and the losses that was incurred was quite associated with the sale of Hydrox after date of balance. The home consortium’s related transactions got finally completed and possible estimations was made on the capital loses that amounted to $ 1.8 billion (Hay, Stewart and Botica Redmayne 2017). The association of Tax assets along with the taxes utilisedand recognised the forceeable future.
The standard of materiality is prepared following the audit report of the business entity based on certain guidelines that are distinctly stated in the Australian Auditing Standards (Carson, Fargher and Zhang 2016). The judgement is made after proper professional sceptism that is maintained under this very segment. The essential key standards are considered for audit preparation.
The analysis suggests some of the specific questions that arise due to entity’s audit report. The following questions are as follows:
Conclusion:
It can be deciphered from the given assessment that the auditing reports of the specific entity has particularly followed a proper structure of legislation for integrity in accordance to the Australian Auditing Standard. The main audit matters are stated and efficiently performed. It is the responsibility of the auditors and the directors to perform all the task maintaining the ethical concepts and proper balance for stating the finance and the company’s auditing reports. The company’s auditor needs to balance with proper justification that must follow the company’s material information and must cover all the points in that particular segment.
Reference:
Carson, E., Fargher, N. and Zhang, Y., 2016. Trends in auditor reporting in Australia: a synthesis and opportunities for research. Australian Accounting Review, 26(3), pp.226-242.
Cohen, J.R. and Simnett, R., 2014. CSR and assurance services: A research agenda. Auditing: A Journal of Practice & Theory, 34(1), pp.59-74.
Farooq, M.B. and de Villiers, C., 2017. The market for sustainability assurance services: A comprehensive literature review and future avenues for research. Pacific Accounting Review, 29(1), pp.79-106.
Fernandez-Feijoo, B., Romero, S. and Ruiz, S., 2016. The assurance market of sustainability reports: What do accounting firms do?. Journal of cleaner production, 139, pp.1128-1137.
Green, W., Taylor, S. and Wu, J., 2017. Determinants of greenhouse gas assurance provider choice. Meditari Accountancy Research, 25(1), pp.114-135.
Hay, D., Stewart, J. and Botica Redmayne, N., 2017. The Role of Auditing in Corporate Governance in Australia and New Zealand: A Research Synthesis. Australian Accounting Review, 27(4), pp.457-479.
Junior, R.M., Best, P.J. and Cotter, J., 2014. Sustainability reporting and assurance: A historical analysis on a world-wide phenomenon. Journal of Business Ethics, 120(1), pp.1-11.
Kend, M. and Basioudis, I., 2017. Reforms to the Market for Audit and Assurance Services in the Period after the Global Financial Crisis: Evidence from the UK. Australian Accounting Review.
Kend, M., 2015. Governance, firm-level characteristics and their impact on the client’s voluntary sustainability disclosures and assurance decisions. Sustainability Accounting, Management and Policy Journal, 6(1), pp.54-78.
Knechel, W.R. and Salterio, S.E., 2016. Auditing: Assurance and risk. Routledge.
McKee, D., 2015. New external audit report standards are game changing. Governance Directions, 67(4), p.222.
Moroney, R. and Trotman, K.T., 2016. Differences in Auditors’ Materiality Assessments When Auditing Financial Statements and Sustainability Reports. Contemporary Accounting Research, 33(2), pp.551-575.
Rahim, M.M. and Idowu, S.O., 2015. Social Audit Regulation: Development, Challenges and Opportunities. Springer.
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Simnett, R. and Huggins, A.L., 2015. Integrated reporting and assurance: where can research add value?. Sustainability Accounting, Management and Policy Journal, 6(1), pp.29-53.
Simnett, R., Carson, E. and Vanstraelen, A., 2016. International archival auditing and assurance research: Trends, methodological issues, and opportunities. Auditing: A Journal of Practice & Theory, 35(3), pp.1-32.
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Zhou, S., Simnett, R. and Green, W.J., 2016. Assuring a new market: The interplay between country-level and company-level factors on the demand for greenhouse gas (GHG) information assurance and the choice of assurance provider. Auditing: A Journal of Practice & Theory, 35(3), pp.141-168.
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