Audit and Assurance Report on Woolworth Limited

AUDIT AND ASSURANCE
ACC 302
[DATE]
STUDENT’S NAME
[Company address]

Table of Contents
Background and Abstract...................................................................................... 2
Discussion and Analysis......................................................................................... 2
Part A.................................................................................................................. 2
Analytical Procedure, audit assertion and key accounts.....................................2
Relevant Audit Procedures.................................................................................3
Part B.................................................................................................................. 4
Corporate Governance....................................................................................... 4
Audit Committee................................................................................................ 4
Benefit of the Audit Committee..........................................................................4
References............................................................................................................. 6

Background and Abstract
The report below explain the role of the auditor, their function and the scope of
audit services. It focuses on the different perspective of auditing services namely
from professional, legal and ethical context. The analytical review has been
conducted on the given company “Woolworth Limited” and areas of concern
have been identified using it. On the basis of same, the audit procedures were
being identified. Part B of the assignment deals with the report on the corporate
governance of the company (Belton, 2017). The reports discusses if the company
has audit committee and is the composition correct and in compliance with the
rules and regulations stated. Lastly, the importance of the audit committee has
also been stated if the same is beneficial to the auditor, company, the profession
or the society as a whole.
Discussion and Analysis
Part A
Analytical Procedure, audit assertion and key accounts
The company selected for analysis is Woolworth Limited which is listed on ASX.
The company deals in liquor business, hotel industry, poker gaming and retail
business as well. It is the 19th largest retail company in world, 2nd in terms of
revenue in Australia as well as New Zealand. The company employs more than
205000 people and is one of the largest employer in Australia (Choy, 2018).
The analytical review of company has been conducted via ratio analysis as
shown below:
Woolworths (WOW) > Ratios Analysis
Name of the ratio Formulas 2018 2017 2016 2015
Part A: Liquidity Ratios
Current Ratio or
Working Capital
Ratio
Current Assets / Current
Liabilities 0.78 0.80 0.83 0.84
Quick ratio or Acid
test ratio
(Current Assets - Inventory) /
Current Liabilities 0.32 0.33 0.32 0.30
Cash flow Ratio Net cash flow from operating
activities / Current Liabilities 0.32 0.35 0.26 0.36
Part B: Profitability Ratios
Return on Equity Profit available to owners /
Average Equity *100
16.55
%
16.13
%
-
26.74
%
19.20
%
Return on Assets Profit (loss) / Average total
assets *100
7.62
%
6.91
%
-
9.99%
8.44
%
Gross Profit Margin Gross Profit / Sales Revenue
*100
29.33
%
28.94
%
26.77
%
27.20
%
Profit Margin Profit (loss) / Sales Revenue
*100
3.15
%
2.89
%
-
4.03%
3.62
%
Cash Flow to Sales
Cash Flow from operating
activities / Sales Revenue
*100
5.14
%
5.67
% 4.05% 5.67
%