Audit, Assurance and Compliance

AUDIT, ASSURANCE AND
COMPLIANCE

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
PART A...........................................................................................................................................3
Measuring and discussing income statement balance sheet and cash flow statement ratios and
how it affects the assessment of materiality, detection risk and overall audit risk.....................3
PART B............................................................................................................................................6
Question 1...................................................................................................................................6
Question 2...................................................................................................................................8
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Auditing is been referred to as an analysis of the financial statements and the objective
examination in order to evaluate the company's financial statement. The auditing is being
conducted by either the internal parties or the external parties of the business. The auditing is
being conducted in order to analyse the fact of whether the financial statements are being
prepared as per the standards or not. The present study is based on bank of Queensland which is
an Australian retail bank headquartered in Brisbane Australia and founded in the year 1863. The
present study will outline the analysis of financial statements of the Banks of Queensland. In
addition to this the members of audit committee and the association with the audit committee
effectiveness and audit quality after IFRS adoption will be discussed. In the end a discussion will
take place only preparing the different aspects relating to audit committee effectiveness
recommended by ASX corporate governance council.
PART A
Measuring and discussing income statement balance sheet and cash flow statement ratios and
how it affects the assessment of materiality, detection risk and overall audit risk
The auditing is been defined as the analysis and evaluation of the financial statements of
the company. The reason underlying this fact is that with help of auditing a computer can easily
evaluate and analyse the financial performance of the company and whether all the financial
statements have been made with respect to these standards applicable or not. this is pertaining to
the reason that if the financial statements are not made as per the standards provided and
applicable then this will create a negative impact to the Goodwill of the company for stop ends
with help of an audit a company can easily evaluate the factors that whether the company has
prepared the financial statements as per the standards or not (Bik and Hooghiemstra, 2018). The
measurement and evaluation of the income statement balance sheet and cash flows of companies
very essential for stop the reason underline this fact is that the auditing will provide a clear you
that whether the company is working in ethical and moral values or not. In addition to this the
auditing will also highlight the different risk which the company can face within the near future.
The analysis of the financial statements of Bank of Queensland ltd is being done with the help of
the ratio analysis. The ratio analysis is very helpful in identifying and analysing the financial

position of the company with respect to composition of last year for stop this will provide a
much clearer and easily understandable manner all the key financial aspects relating to the
financial statements of bank of Queensland. The ratio analysis is as follows-
Profitability ratio analysis
2018 2019
Net profit 336 298
Sales revenue 1121 1096
Earnings before interest and
tax or operating profit 493 435
Capital employed 13933 15845
Net income 336 298
Average total assets 52980 54288
NP ratio Net profit / sales * 100 30% 27%
Return on capital em-
ployed EBIT / capital employed 0.04 0.03
Return on assets Net income / average total assets 0.01 0.01
Liquidity ratio analysis
2018 2019
Current assets 47985 48359
Current liabilities 1415 12350
Current ratio Current assets / current liabilities 33.91 3.91
Solvency ratio analysis
2018 2019
Long-term debt 10077 11986
Shareholder's equity 3856 3859
Debt-equity ratio Long-term debt / shareholders equity 2.61 3.11
With the help of the profitability ratio a complete and evaluate that how much profit the
company's early with help of the total sales of the company. Analysing the profitability is very
essential for the success of the company. The reason underlying this fact is that the business
operates with the main objective of earning profit (Chang and et.al., 2019). if in case the
profitability of the company is not good than this will affect the effective working of the
company for stock with help of the net profit ratio it is clear that in comparison to the last year
the profitability has reduced by 3% that is in 2018 it was 30% where is in 2019 and decreased to