Trimester 2 2018
Assessment Value: 20% General Instructions:
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):
“The IAASB’s new auditor reporting requirements commenced in December
<Note> Refer to the links below and listen to the podcast before you commence the assignment.
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
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
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?
What follow-up questions would you ask the Auditor at the company’s Annual General Meeting?
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.
Additional Resources Reference Links:
(Enhanced reporting requirements review one year after introduction)
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:
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
<Note> Refer to the Individual Assignment Rubric below
HI6026 – Individual Assignment Marking Rubric
Criteria weight Excellent Good Satisfactory Sub-standard
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)
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)
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
Reference and Citation 2 marks
Very well formatted with sub-headings, page numbers, appendices, and effective use of tables/graphics (1 mark)
References are consistently correct using Harvard style or APA style. No missing citations. A strong reference list with relevant and credible sources. (2 marks)
Formatting is well set out and clear, but there are minor issues in sub- headings, page numbers, appendices and/or graphics. (0.75 mark)
Generally correct referencing using Harvard style or APA style. Lacks references. (1.5 marks)
Formatting is coherent and clearly structured, but page numbers are missing or subheadings or contents page is
brief (0.5 mark)
Some References are used, but not used consistently. Not enough research. (1 mark)
No formatting or lack of structuring. (0 mark)
References are missing or do not comply with correct referencing style. (0.5 mark)