logo

Importance of ASA 701 in ABC Learning Limited- Project Report

12 Pages2924 Words282 Views
   

Auditing (ASA 701)

   

Added on  2019-11-26

Importance of ASA 701 in ABC Learning Limited- Project Report

   

Auditing (ASA 701)

   Added on 2019-11-26

ShareRelated Documents
1ASA 701
Importance of ASA 701 in ABC Learning Limited- Project Report_1
2Executive SummaryThe importance of ASA 701 Communicating Key Audit Matters in the Independent Auditor’sReport has been highlighted below. Through the help of ABC Learning limited we have tried toexplain the purpose of ASA 701. Auditors powers in the key audit matters definition has beenclearly highlighted and explained in the below study. We have tried to identify the impact of thenew auditing standards that could have been in case, it would have been developed in the early2000.ContentsExecutive Summary.....................................................................................................................................2Introduction.................................................................................................................................................3Application of ASA 701..............................................................................................................................4Collapse of ABC Learning.............................................................................................................................5Application of ASA 701 on ABS Learning.....................................................................................................7Conclusion & Recommendations..............................................................................................................10References.................................................................................................................................................10
Importance of ASA 701 in ABC Learning Limited- Project Report_2
3IntroductionIn the wake of global financial crisis, the Auditing and Assurance Standard Board (AUASB)need accounting standard ASA 701 "Communicating Key Audit Matters in the IndependentAuditor’s Report". The provision of ASA 701 is in line with section 227B of the AustralianSecurities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001.The shareholders of the company are interested in knowing more about the internal health of thecompany. The introduction of ASA701 is majorly because of the growing need of theseshareholders. The development of ASA 701 has been made by the Australian Accountingstandard board with an intention to bring the same in par with the ISA 701 Communicating KeyAudit Matters in the Independent Auditor’s Report. There are certain differences as well in thenew standard when the same has been compared with the ISA 701; this is majorly made to
Importance of ASA 701 in ABC Learning Limited- Project Report_3
4accord with the Australian legislative environment. The ASA 701 auditing standard applies tothe financial report that has prepared for a financial year or half year in accordance with thecorporation act 2001.[ CITATION AUA15 \l 1033 ]Application of ASA 701The standard provides information about the requirements and the explanations that required tobe placed in the audit report in relation to providing key information to the users of the financialstatements. The international auditing and assurance standard board has enhanced the reportingrequirements for the auditors. The ASA 701 incorporates all these changes that have recentlybeen incorporated by the international board. The new auditing standard provides informationabout the key audit matters that’s needs to be reported in the audit report which may arose theattention of the users of the financial statements. In this case, the auditor of the company isrequired to use their judgment to determine the matter that need to be reported in audit report askey audit matters. In this case, the matters that have been communicated through the persons thathave been charged by governance can be treated as key audit matters. The auditors whiledetermining the key audit matters should also consider the key events that have taken placeduring the year which directly or indirectly may impact the investment decision making of theinvestors. The auditors through the help of illustrations provided in the auditing standard candetermine the circumstances where they can treat an event as an exception and can decide not tocommunicate the same as a key audit matter. The documentations that the auditors are requiredto be kept for the key audit matters and the period for which the same needs to be maintained is
Importance of ASA 701 in ABC Learning Limited- Project Report_4

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Auditor's Report | Auditing Standards Assignment
|10
|2724
|51

Auditing, Assurance & Services Assignment
|13
|3207
|49

A Journal of Practice & Theory
|14
|3309
|32

ASA 701 Communicating Key | Assignment
|13
|2974
|317

Auditing, Assurance & Services : Report
|13
|3390
|129

(PDF) Auditing and assurance : Some emerging issues
|12
|3616
|169