Importance of Key Audit Matters and ASA 701 in the Mining Industry

Running head: ACCOUNTING AND ASSURANCE
ACCOUNTING AND ASSURANCE
Name of the Student
Name of the University
Author Note

1ACCOUNTING AND ASSURANCE
Executive Summary
The ASA 701 was introduced to bring about greater transparency into the firm and to ensure that
the crucial maters of the firm is outlined to the managers before the downfall. The reason why
the key auditing matters are primarily focused on can be stated to be the ultimate reason that
their occurrence may bring about harmful impacts on the overall operations of the firm and have
a negative impact on the overall consistency of the operations. Hence, the report identifies the
importance of the Key Audit matters, the ASA 701 and also outlines the case of the mining
industry in order to understand the standard in a better manner.

2ACCOUNTING AND ASSURANCE
Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Analysis...........................................................................................................................................5
Alumina Limited..........................................................................................................................5
BHP Billiton................................................................................................................................6
Evolution Mining.........................................................................................................................8
CSR Limited................................................................................................................................9
Fortescue Metals Group.............................................................................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

3ACCOUNTING AND ASSURANCE
Introduction
The Key audit matters can be stated to be those matters which can be rightfully defined as
the matters which the auditor deems to be important and believes will take up an important
position in the overall financial statement of the current period of assessment (Arens, Elder and
Mark, 2012). They key audit matters can be stated to be generally elected from the matters which
can be believed to have utmost relevance (Vik and Walter, 2017). The report primarily aims to
outline the overall case of the ASA 701 and define the different audit matters which are generally
chosen by the independent authors in case of a mining industry. The five major firms as involved
in the mining industry have been chosen for the assessment.
Discussion
According to the new standard ASA 701 of the Australian Board, the Key audit matters
can be stated to be those matters which are highly crucial in nature and hold utmost relevance
according to the personal judgement of the audit of the auditing firms reviewing the books of
accounts of the firm during a particular assessment period (Carson, Fargher and Zhang, 2016).
The features of the new standard can be defined as follows:
 It is considerably important to mention the Key audit matters in the books of accounts
which are generally audited by the different auditors (Köhler, Ratzinger-Sakel and Theis,
2016).
 It can also be considered to be very crucial for the auditor under the different entities to
undertake considerable decision making and include the same in the report.
 It is the duty of the different key auditors to consider the different areas associated with
risk and pay considerate attention to those areas (Griffiths, 2016). The judgement of the
auditors can be stated to have a key role to play.