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Auditing and Assurance (pdf)

Added on - 22 Nov 2020

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AUDIT ANDASSURANCE
EXECUTIVE SUMMARYAudit is an official examination and inspection of the books, accounts, vouchers, documents,other statutory records by an independent body for determining as to what level the company hasfollowed the standards of disclosure for presenting a true and fair position of the company. Theperson who conducts such inspection is known as auditor. Assurance is an audit service which isprovided by a certifies chartered accountant professional. The present project report is about therationale of ASA 701. The new auditors' reports are prepared with the implementation of theprovisions of the ASA 701 which requires auditors to be judgemental in determining the keyaudit matters of the business concern that has potential of affecting the independent audit reports.
Table of ContentsEXECUTIVE SUMMARY.............................................................................................................2INTRODUCTION...........................................................................................................................4MAIN BODY...................................................................................................................................4What is ASA 701 and why it is rationale?.............................................................................4Key auditing matters in the mining industry..........................................................................7RECOMMENDATION and CONCLUSION.................................................................................9REFERENCES..............................................................................................................................11
INTRODUCTIONAudit and assurance is the assessment of records and accounts of a company for findingout the honesty and fairness of the financial position disclosed by the organisation (Abbott andet.al., 2016). The report will cover the rationale of the Audit Standard 701 which deals with thecommunication of key matters in the independent report in the pursuit of the legal requirements.Further, it will include an analysis of key matters in the mining industry for determining whetherthe implementation of ASA 701 will disclose more information to the users of financial reports.MAIN BODYWhat is ASA 701 and why it is rationale?Auditing Standard 701 is an Australian auditing standard which tells about theresponsibility of auditors of communicating the key matters in the authentic auditor's report(Carson, Fargher and Zhang, 2016). The auditor is intended to address both as per its judgementregarding as to what has to be communicated in the auditor's report and the what will be the formand content of such communication in the report.Key audit matters can be described as the such matters which requires the specificjudgement of the auditor. It is considered as of utmost significance in the audit of the financialrecords of the company belonging to the current period(Auditor Reporting StandardsImplementation: Key Audit Matters,2019).PURPOSE: The main objective of this auditing standard is to communicate and disclosethe key matters for enhancing the transparency of the audit that has been performed on acompany. The communication of such key matters facilitates the intend users of the financialreport, an additional information which helps them in understanding the key aspects of thebusiness entity along with the significant professional judgement of the auditor (Tepalagul andLin, 2015).Main features of this standard are:Communication of key audit matters is mandatory in the auditor's report whileperforming audit on the listed companies on ASX.Allowing and enabling the auditors of different business concern for deciding whether toconsider key audit matters in their reports or not (Sánchez-Medina, Blázquez-Santana andAlonso, 2019).
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