ACC 302 Auditing and Assurance

ACC 302
AUDITING & ASSURANCE
Assessment-3 (Practical Audit Scenario)
Individual Report Writing
Caved By:
Nisha Giri
134911

Part A
Analytical Review of Webjet limited FY20– Area
of Concern Identified
Analytical review is one of audit technique that used to assess
the reasonableness of accounts balance, amounts, and transactions that
report in the financial statements (Analytical review on Financial
Statements | WIKIACCOUNTING, 2021).
Looking at the financial statements of Webjet limited FY2020:
(Cmsmedia.webjetlimited.com. 2021.)
Webjet limited was following outstanding profitable growth in FY19 and
recorded report of good earnings in 1H20 driven by the international
strategy of WebBeds. WebBeds was taking the opportunity to develop
as one of the leading B2B player, unfortunately like all the travel
companies’ world COVID pandemic had devastating Impact on the
business. The second half of the year was expected to give the result of
nominal revenue as the travel restrictions, domestic and international
border closures and health concerns led to a material fall in TTV and
bookings in all Webjet’s business.
Prior to COVID-19, WebBeds was the fastest growing B2B player in the
world and had cemented itself as the clear #2 global player. COVID-19
pandemic which resulted in nominal revenues in all businesses from
mid-March 2020. As a result, TTV for the year was $3.02 billion, down
21% compared to FY19, revenues were $266.1 million (down 27%) and
EBITDA was $26.4 million (down 80%) (Cmsmedia.webjetlimited.com.
2021.).
Webjet limited was expecting a great improvement on its revenues and
profits due to the growing impacts of WebBeds strategy but reported
amounts shows that due to the world COVID 19 pandemic the company
suffered downfall in revenues, TTV and EBITDA by 21, 27 and 80
percentage also had to initiate cost reductions measure within the year
2020.
Comparing the Webjet limited financial statements with the previous
years, the world Pandemic has caused a devastating result for the
company as it being one of the travel companies. Webjet is well placed

to capture the pick-up in travel momentum as domestic and international
borders reopen around the world.
Assertion and Ledger Account(s) Impacted
The Company reported a record 1H20 driven by the performance of the
WebBeds business. For the Underlying Operations, TTV was up 25%
over 1H19 to $2.3 billion, revenue was up 24% to $217.8 million and
EBITDA was up 43% to $86.2 million. 2H20 was impacted by the
COVID-19 pandemic which resulted in nominal revenues in all
businesses from mid-March 2020. As a result, TTV for the year was
$3.02 billion, down 21% compared to FY19, revenues were $266.1
million (down 27%) and EBITDA was $26.4 million (down 80%)
(Cmsmedia.webjetlimited.com. 2021.).
To mitigate the impact of COVID-19, the company instigated a range of
cost reduction measures in March and April 2020. These initiatives
helped reduce costs by c.50% compared to 1H20(4). FY20 NPAT
(before AA) was ($17.7 million), down 122% while NPAT was ($42.3
million), down 168% (Cmsmedia.webjetlimited.com. 2021.).

Audit Procedure/Task
Audit procedures are the processes and methods that auditors perform
to obtain audit evidence which enables them to make a conclusion on
the set audit objective and express their opinion (Audit Procedures: A
Quick Tour with 19 (Free) Templates | Process Street | Checklist,
Workflow and SOP Software, 2021)
For the FY20 of Webjet’s limited the audited areas are as follows:
1. Financial
2. Secretarial and compliance audit
3. Internal controls
4. Quality management
5. Project management
6. Water management
7. Energy conservation
For the audit procedure of Webjet’s limited there has been step by step
process conducted. Step 1: there has been conducted client interviews
i.e. verbally done and written representations of previous audits and
other documentation. Step 2: Risk workshop conducted during this
stage; meeting was schedule with the senior management staffs. Step 3:
most of the fieldworks were done, all the organizational records and
documents were checked along with the observation of business
operations. Step 4: all the Analysis were done; mathematical errors,
false claim, and organizational breaches. Step 5: the final step was
taken for conclusion of the financial status of the company and
comments and recommendation on what field we can improve on.

PART B
Corporate governance
Webjet limited is committed to ensuring high standards of corporate
governance and its governance practices have demonstrably supported
the business and its growth by facilitating effective board and
management decision making, providing clear lines of responsibility and
accountability and a commitment to transparent communications with
shareholders and other stakeholders (Cmsmedia.webjetlimited.com.
2021).
Webjet follows different principle regarding corporate governance i.e.
Principle 1: Lay solid foundations for management and oversight.
Principle 2: Structure the Board to be effective and add value. Principle
3: Instil a culture of acting lawfully, ethically, and responsibly. Principle 4:
Safeguard the integrity of corporate reports. Principle 5: Make timely and
balanced disclosure. Principle 6: Respect the rights of securityholders
Principle 7: Recognise and manage risk. Principle 8: Remunerate fairly
and responsibly.
Audit Committee
Webjet’s Audit committee constitutes of the members established by the
board of directors under the company’s constitution. The Audit
Committee is a committee of the Board and is accountable to the Board
for its performance.
a) Audit committee help the Board and the Company achieve its
objectives in relation to:
(i) external and internal financial reporting.
(ii) the application to the Company of accounting policies.
(iii) legal and regulatory compliance; and
(iv) internal financial control and risk management.
b) maintain and improve the quality, credibility and objectivity of the
financial accounting and reporting processes (including financial
reporting on a consolidated basis);

c) oversee the appointment, remuneration, qualifications,
independence and performance of the external auditor and the
integrity of the audit process.
d) promote a culture of compliance.
e) ensure effective external audit functions and communication
between the Board and the external auditors; and
f) review and generally assess the effectiveness of the Group's
financial compliance processes and strategies.
Benefits of Audit committee
The audit committee can provide the following benefits to the auditor:
1. Provide actionable insights to oversee and improve financial practices
and reporting
2. Create and maintain effective anti-fraud programs
3. Enhance the internal audit function
4. Oversee the organization’s external audit
5. Strengthen credibility with stakeholders

References:
 Cmsmedia.webjetlimited.com. 2021. [online] Available at:
<https://cmsmedia.webjetlimited.com/webjetltd-uploads/2020/08/4-
WEBJET_Annual-Report_FY2020.pdf> [Accessed 24 May 2021].
 Process Street. 2021. Audit Procedures: A Quick Tour with 19
(Free) Templates | Process Street | Checklist, Workflow and SOP
Software. [online] Available at: <https://www.process.st/audit-
procedures/> [Accessed 24 May 2021].
 WIKIACCOUNTING. 2021. Analytical review on Financial
Statements | WIKIACCOUNTING. [online] Available at:
<https://www.wikiaccounting.com/analytical-review-financial-
statements/> [Accessed 24 May 2021].