Auditing and Assurance

Running head: Auditing and Assurance
Auditing and Assurance
Name of the Student
Name of the University
Author Note

1Auditing and Assurance
Executive Summary
The report include about the auditing and how it help the financial user to take necessary
decision in regards of the company financial position. It also include an details of the Lehman
Brothers case and how it make for the needs of the new accounting standard. It also contains
the detail explanation of the need of new standard ASA 710 and details of the paragraph
contain in the standard. Lastly it includes about the mining industry and key audit matters of
the company under mining industry and how the auditor deal with the same.

2Auditing and Assurance
Table of Contents
Introduction................................................................................................................................4
ASA 701: Rationales..................................................................................................................4
ASA 701: Explanation...............................................................................................................6
KAMs of the Australian Mining Industry..................................................................................7
Downer Edi Limited...............................................................................................................7
BHP Group Limited...............................................................................................................8
Evolution Mining Limited......................................................................................................8
Newcrest Mining Limited......................................................................................................9
Rio Tinto Limited...................................................................................................................9
Witchaven Coal....................................................................................................................10
Conclusion and Recommendations..........................................................................................10
Reference..................................................................................................................................12

3Auditing and Assurance
Introduction
Auditing is a process from which an auditor access the company financial statement
and give its opinion whether the financial statements are showing true and fair view or not.
This help the company to know about the problem which are there in the financial book and
help them to overcome those problem (Azim 2013). Audited financial statement are the base
which help the financial users to take decision in according of the financial statement of the
company and as the opinion of the auditor is present in the financial statement so it help the
company to get the confident of the financial user and let them invest in the company. As per
the recent time it is seen that the auditor are not able to gain the confident of the public as the
society is not able to trust the audited financial statement by the auditor as due to the collapse
of big corporate firm in the recent decades (Carson, Zhang and Fargher 2014). So to
overcome the criticism and also to gain back the confident of the public in the auditor
profession a new standard is been introduced by the Australian Accounting standard Board.
This new standard is ASA 701 which deals with the matters related to Communicating Key
Audit Matters in the Independent Auditor’s Report. This new section has also replaced some
other regulation and ASA 501 which was related to the going concern. So this report shows
the impact of the new standard 701 and what is inside the standard 701. It also explain the
Key Audit Matter Paragraph which is there in the annual report of the company, it show the
Key Audit Matters of the company related to Mining Industry (Kumar and Sharma 2015).
ASA 701: Rationales
The major reason which came in the failure of the Lehman Brothers case was the
auditor fault as they are unable to carry their audit process properly in the company (DeFond
and Zhang 2014). So it can be seen that the management of the Lehman brother was already
in the malicious act in the company. It can be seen from the case that the management of the