Auditing and Assurance in Australia

Questions: 1. Identify the type of audit opinion issued by each auditor, and justify your answer. 2. Do you agree with the type of opinion issued by the auditor? Why or why not? Please indicate an alternative audit opinion if you do not agree with the one issued. 3. Are there any other matters or events that have taken place after the issue of the audit report that strengthens or weakens the auditors opinion? 4. Audit opinion. Answers: 1. Identification of the type of the audit opinion issued by the auditors The annual report of Woolworths indicates that Deloitte acts as the independent auditor of the company. The auditing firm also has examined other supplementary report of the firm that consists of the different sorts of consolidated financial statements. Accordingly, the auditor also takes note of the significant accounting regulations, changes in the equity, cash flows, profit and loss statements as well as directors declarations regarding the corporations as well as its entities. Deloitte, the independent auditor of Woolworths conducts the auditing tasks that are in compliance with the Australian Auditing Standard and conducts the entire procedure in accordance with the ethical code of conduct as stipulated under the APES 110 Code of Ethics, ASA 102 Compliance with different ethical necessities when carrying out the audit tasks examinations as well as other assertion engagement (Apesb.org.au 2016). The reports also notify that the auditor Deloitte also ensures reasonable assurance of avoidance of material misstatement in the financial statements of the financial reports of Woolworths. The audit opinion of Woolworths also states that the financial reports of the company is presented in accordance with the Corporation Act 2001 that helps in providing a true as well as a fair view of the particular consolidated entity as on the period 28 June 2015. In addition to this, the audit opinion also declares that the reports also comply with the International Financial Reporting Standards as declared in the preparation regulation. Furthermore, the audit opinion also provides assurance regarding the compliance of the report with the Australian Standards and the Corporations Regulations 2001 (Auasb.gov.au, 2016). The independent auditor of Woolworths that is the Deloitte presents an opinion based on audit conducted as per AAS. This opinion also assures regarding the compliance of the remune ration report of the company with the 30A of the Corporation Act 2001 (Woolworthslimited.com.au 2016). In the case of Qantas, KPMG acts as the independent auditor of the company. Similarly, KPMG also presents the independent auditors report that presents the directors responsibility for different financial reporting, auditor accountability, auditors opinion and the remuneration report. The auditors opinion declares that the financial report of the Qantas Group complies with the Corporation Act 2001 that ensures true as well as fair view of the Qantas Groups overall financial position including its performance for the period ended as on 30 June 2015. Again, the auditor opinion also notifies the compliance of the financial reports of Qantas Group with the Australian Auditing Standard as well as Corporation Regulation 2001. The independent auditor KPMG also declares the assurance regarding the remuneration report of Qantas Airways and notifies about the compliance of the same with the Section 30A of the Corporation Act 2001 (Investor.qantas.com 2016). 2. Agreement with the audit opinion The type of the audit opinion provided by the both the independent auditors of Woolworths and Qantas can be regarded as a disclaimer thereof presented as a result of both the internal as well as external audit. This is presented as an assurance in a bid to make the user of the financial information arrive at decisions founded on the results of the audit. The audit opinion provided in both the cases can be classified as the unqualified opinion where in the auditor concludes that the financial declaration of the company presents a true as well as fair view of the financial health of the corporations (Millichamp and Taylor 2012). Therefore, there can be agreement with the type of opinion of the auditor. Therefore, it can be hereby ascertained as per the report of both the companies Woolworths and Qantas that independent auditors Deloitte and KPMG respectively engages in unqualified assurance regarding the financial declaration (Iia.org.au 2016). Agreement with the type of opinion issued by the auditor There can be agreement with the audit opinion of both the companies that is the Woolworths and the Qantas Group, as it is based on the audit evidence regarding the amounts as well as the disclosures provided in the financial report. The procedures of the audit also depend on the judgement of the auditors as well as the assessment of the risks of the material misstatements of the financial reports owing to the fraudulent activities (Millichamp and Taylor 2012). However, there is adequate internal control that the auditor takes into consideration that is relevant to the process of preparation and presentation of the financial report and in turn provides a true and fair outlook. The agreement with the auditors opinion is justified as the both the independent auditors for the two different companies has performed the entire auditing procedure in accordance with the Corporations Act and the Australian Auditing Standards. The auditors have also conducted the entire procedure with the inten tion and purpose of evaluation of the financial reports and whether it presents a true as well as fair view in all respects. 3. Matters or events that have taken place after the issue of the audit report The things that can strengthen the auditors opinion include the illustrative description of different position that helps in assessment of the performance of the audit committee. The effective risk management by the audit committee also helps in strengthening the audit opinion of the company. In addition to this, the events of executive sessions conducted with the audit committee that includes private sessions with the professional of internal audit as well as the external audit. The transparent dialogue between the professionals can also help in judging the assurance regarding the accounting policies, disclosures, judgements about estimates, suspected error, material issues and many others. 4. Audit opinion The auditor views the financial report to present a true and a fair view of the financial health of the company as the audit procedure discovers no material errors in the accounting practices of both the companies compliant with the Australian Auditing standard. The remuneration report also conforms to the Corporation Act declared during the year 2001. Therefore, the auditor can present an unqualified opinion based on the good records of various accounts that conclude the cash accounts, inventory calculation, and appropriate calculation of the depreciation. References Apesb.org.au. (2016). Accounting Professional and Ethical Standards Board. [online] Available at: https://www.apesb.org.au [Accessed 24 May 2016]. Auasb.gov.au. (2016). Auditing and Assurance Standards Board (AUASB) - Home. [online] Available at: https://www.auasb.gov.au [Accessed 24 May 2016]. Cpaaustralia.com.au. (2016). CPA Australia. [online] Available at: https://www.cpaaustralia.com.au [Accessed 24 May 2016]. Iia.org.au. (2016). Internal Audit Membership, Courses, Conferences, Certifications and Qualifications - Institute of Internal Auditors - Australia. [online] Available at: https://www.iia.org.au [Accessed 24 May 2016]. Investor.qantas.com. (2016). Qantas | Investors - Home. [online] Available at: https://investor.qantas.com [Accessed 24 May 2016]. Millichamp, A. and Taylor, J. (2012). Auditing. Andover, Hampshire: Cengage Learning EMEA. Woolworthslimited.com.au. (2016). Quality Brands and Trusted Retailing - Woolworths Limited. [online] Available at: https://www.woolworthslimited.com.au [Accessed 24 May 2016].