Audit and Assurance of JB Hi-Fi Company by Deloitte Touche Tohmatsu Limited

This report reflects the auditor’s roles, liabilities and function of the Deloitte Touche Tohmatsu how this audit firm has performed it duties while auditing the financial statement of the JB Hi- Fi Company. It also highlights the independence of the auditors, remuneration of auditor, audit committee and audit charter, key audit matters, director's and auditor's responsibilities and material subsequent events.

JB HI- FI COMPANY
Audit and Assurance
Audit
Audit, Assurance and Compliance

EXECUTIVE SUMMARY
With the ramified economic changes and complex business structure, auditors are
playing effective role in keeping the business transparent and effective. This report reflects
the auditor’s roles, liabilities and function of the Deloitte Touche Tohmatsu how this audit
firm has performed it duties while auditing the financial statement of the JB Hi- Fi Company.
This report has reflected the key understanding on the audit matters and other relevant data of
the audit and assurance program.

Table of Contents
EXECUTIVE SUMMARY........................................................................................................2
INTRODUCTION......................................................................................................................5
CONTENTS...............................................................................................................................5
INDEPENDENCE OF THE AUDITORS AND NON-AUDIT SERVICES............................5
REMUNERATION OF AUDITOR...........................................................................................6
AUDIT COMMITTEE AND AUDIT CHARTER....................................................................8
STRUCTURE............................................................................................................................8
FUNCTION AND RESPONSIBILITIES..................................................................................8
INDEPENDENT AUDITOR’S REPORT TO STAKEHOLDERS..........................................9
OPINION...................................................................................................................................9
KEY AUDIT MATTERS..........................................................................................................9
DIFFERENCE OF RESPONSIBILITY..................................................................................10
DIRECTOR’S RESPONSIBILITY.........................................................................................10
AUDITOR’S RESPONSIBILITY...........................................................................................11
MATERIAL SUBSEQUENT EVENTS..................................................................................11
CONCLUSION........................................................................................................................11
REFERENCES.........................................................................................................................12

INTRODUCTION
In the present era, it is important for the companies to focus on maintaining the
transparency. It is necessary to transmit all the data to the shareholders through the annual
reports. One of the information is related with the audit function. It has been investigated that
annual report should consider the information related to the auditors. The content should be
stated in the clear words in context to the declaration which is made by Deloitte Touche
Tohmatsu Limited about his independence and also of the remuneration which is paid to the
auditors, any type of the non- audit services, formation of the audit committee along with the
audit charter and also it is important to consider the audit matters that can be seen in the audit
report. All the data should be expressed by considering the management affirmation.
In this report, the emphasis will be given on the independence of the Deloitte Touche
Tohmatsu Limited and non-audit services, the functioning related to auditing, the duties and
material information to bifurcate the audit matters and also the responsibilities related to JB
HI-FI. The matter related to auditor has also been highlighted with the audit functions and
also the operation of the auditors (JB Hi Fi Company, 2018).
Auditor services related to interdependence
It has been analyzed that auditors express their independence declaration to the management
of JB HI-FI. It is also related with the auditors who have no intention and also focuses on the
considering the regulations related to Corporations Act 2001 and professional code of
conduct is also taken into consideration. It has been seen that declaration is given according
to the belief and knowledge. The function of the auditor is to focus on the compliance
program which has been offered by the audit report of the organization. It is evaluated that
the audit committee employed in JB HI-FI is taken so that it can be easy to analyse the
accurate view of assets and also the liabilities which are recorded in the books of accounts
(Aschauer, and Quick, 2018).
Also it has been analyzed that explicitly which is highlighted in the annual report of JB HI-FI
has focused on exploiting the potential of the auditors. This can be done by focusing on
professional aid related with the auditors on the basis of non-audit matters. In relation with
the auditor interdependence it has been stated that the satisfaction related to the auditor and
risk committee should not be left as it can affect the interdependence of the auditors. The
program related to tax compliance and audit functions are also considered to evaluate the

auditor’s performance to explicit the overall fairness related with the information which is
recorded. By emphasizing on the non-audit services it has been seen that there are various
principles that are set by APES 110 Code of ethics for professional accountants which are set
in relation to the interdependence of the auditors. So, the list which is related to the non-audit
services is stated below like tax compliance and also different services (Yee, Sujan, James, K.
and Leung, 2017).
All the non-audit services provided by the auditors are of revenue nature.
REMUNERATION Given To Deloitte Touche Tohmatsu Limited
The remuneration which is given by the auditor consist of the payments which are made to
the lead the auditor and also it is concerned with the practices of the audit companies that are
not concerned with the lead auditor. The structure of remuneration consists of the payments
that are received by the auditors and also it focuses on receiving the non-audit services to JB
HI-FI Company (JB Hi Fi Company, 2018).
Amount of remuneration
given to Deloitte Touche
Tohmatsu Limited
2018 ($) 2017 ($) % change
1. Audit and assurance
services offered by the
auditors to company
271.25
Million 254 Million 6.72%
2. Other services provided
by Deloitte touche
Tohmatsu Limited (JB Hi Fi
Company, 2018).
507.25
Million 513 million -1.13%
Total 32201 30552 5.40%

Audit committee and Audit charter
It has been seen that organization has implemented the audit and risk committee. JB HI-FI
has also implemented an audit committee charter which states that all the committee and
charter are involve in evaluating the risk which is also related to the financial statements
(Stueart, Robert 2008).
STRUCTURE
The structure of the Deloitte Touche Tohmatsu Limited is considered by focusing on the non-
executive and executive auditor of the company. There are various auditors who are involved
in evaluating the annual report and it states that how well organization has maintained proper
harmonization in relation to international and domestic standards of accounting (JB Hi Fi
Company, 2018).
FUNCTION AND RESPONSIBILITIES
The basic functions and responsibilities are related to offer recommendations so that
corporate reporting can be made in context to the entity acceptable by the specified
framework. Also it is recommended that to appoint and remove the auditors who are
independent from the undertaken work and also the program of auditor. It also focuses on
analysing the overall values. Auditors are also offering non audit services like insurance
coverage information and also the evaluation of accounts so that it can be complied with
international and domestic financial reporting standards. It has also been recommended that
it is important to consider the appointment and also the removal of the external and
independent auditor. Also the external auditor focuses on efficiency related with the appraisal
in the financial statements (Aschauer, and Quick, 2018). To act as the fiduciary individual for
the stakeholders so that they can offer transparent information related to the financial
statement of the organization (Meckfessel, and Sellers, 2017).
 To strengthen the reporting frameworks of the company (Chan, and Vasarhelyi, 2018).
 To analysis the fact that whether the directors of the JB Hi-Fi Company has given the proper
management representation letter (Tepalagul, and Lin, 2015).
 Evaluate the fairness of the recorded books of accounts of company.
 To recommend the appointment and analysis the key managerial persons of company.

 To act as trustee for the stakeholders (JB Hi Fi Company, 2018).
 Providing the auditing and non-auditing services to JB Hi-Fi Company
INDEPENDENT AUDITOR’S REPORT TO STAKEHOLDERS
It has been seen that Deloitte Touche Tohmatsu Limited has showcased the opinion
which is unmodified of the JB HI-FI. In their views and according to the audit procedures it
has been seen that financial statements are related with provision of the corporation act 2001.
The auditor also stated that they have finished the independence need which is expected out
of them in relation to the auditor. It has been mentioned in the audit report that the needs of
ethical lay by APES 110 Code of Ethics for Professional Accountants have been
implemented. The auditor opinion states that JB HI-FI has complied with all the procedures
and made the overall financial statement disclosure. The auditor also stated that stakeholders
should focus on the financial investment decisions. It will also help to boost the confidence
on the annual basis and also on the financial statement which are related and given by the
Deloitte (JB Hi Fi Company, 2018).
OPINION
The Deloitte Touche Tohmatsu Limited has given his opinion that company has no
disclaimer in its legal compliance program. The non-qualified audit report is given by the
auditor shows that company has complied with the applicable laws and regulation. However,
the assertion test reflects the disclaimer that impairment loss recorded in the books of account
might vary due to the certain assumptions and variation taken by company (Clark, et al.
2017).
KEY AUDIT MATTERS
There is several key audit matter which needs to be undertaken by the Deloitte
Touche Tohmatsu Limited. There are some of the cases which have been considered as key
audit matter in the auditing functions of the auditors (Yee, Sujan, James, and Leung, 2017).
IMPAIRMENT TESTING OF GOODWILL AND OTHER INTANGIBLE ASSETS
Deloitte Touche Tohmatsu Limited need to assess that the impairment testing
implemented by the company has been done as per the AASB 136. It helps auditors to

identify whether the identified impairment loss is properly determined or not as per the
applicable rules and regulation (Tepalagul, and Lin, L., 2015).
 The audit procedure will be implemented to test the impairment loss and deducted amount
form the cash generating units (Vangelisti, 2016).
o The audit control is implemented to identify the true and fair view of the assets.
BUSINESS ACQUISITIONS
The business acquisitions of the JB Hi-Fi Company have been made with the other small
organization (Wu, Hsu, and Haslam, 2016).
 AUDIT PROCEDURE: The assertion test is implemented to determine the true and fair view
of the assets.
o The test control is also used (Worth, 2009).
RECOVERABILTIY OF OVERRIDE RECEIVABLE
Certain factor is undertaken by the auditor of company to evaluate the transparency of the
business (Yew Wong, 2015).
 The observation test and audit assertion test is used to identify the true and fair view of the
assets (Barr-Pulliam, Brown-Liburd, and Sanderson, 2017).
DIFFERENCE OF RESPONSIBILITY
DIRECTOR’S RESPONSIBILITY
The main responsibility of the director is to prepare the financial statement of
company. They make sure that company has complied with the applicable corporation act
2001 and Australia listing rules and regulation. They also need to make sure that company is
growing and sustainable in long run (Kowaleski, Mayhew, and Tegeler, 2018).
AUDITOR’S RESPONSIBILITY
The auditor is the person who acts in the best interest of the organization. He is the
person who undertakes the assertion test to identify the fairness of the recorded assets in the
books of accounts of company (Beardsley, Lassila, and Omer, 2017). The main

responsibility of Deloitte Touche Tohmatsu Limited is to keep the business transparent
towards the company’s stakeholders and strengthen the sustainability of the organization in
long run. It is analyzed that auditors need to identify the issues and misstatement given in the
financial statement of company. After analysing the facts and issues in the financial statement
of the audited company, he needs to disclose the same in its audit report (Chan, and
Vasarhelyi, 2018). It is considered that auditors need to pass the audit report on the financial
statement of company so that stakeholders could trust and determine that company has
reflected true view of the recorded assets. He also advises management of company to set up
harmonization in its domestic and international reporting frameworks (Meckfessel, and
Sellers, 2017).
MATERIAL SUBSEQUENT EVENTS
The main material subsequent events of the JB Hi-Fi Company have seen is based on
the undertaken strategic approach and strategic alliance of the company. It is analyzed that
the profitability of company has gone down and reflected negative business outcomes. This
has happened due to the increased investment in its operating assets and low amount of return
on capital employed (Stueart, Robert. 2008). In addition to this, company has also faced high
employee turnover which resulted to the destruction of the business in long run. It is analyzed
that company has to lower down the cost of its production if it wants to survive in the long
run. The changes in directors will also destruct the business and will negatively impact the
business growth in long run (Aschauer, and Quick, 2018). There is no material information
which is missing in the report of company.
Follow up question
The main follow up question is that management needs to reflects whether they have shared
MRL (management representation letter with the auditors or not.
CONCLUSION
This study has revealed all the required information and audit and assurance program
undertaken by the auditors in the best interest of the stakeholders. Auditors of the company
have analyzed all the applicable rules and inherent risk in the prepared financial statement of
JB Hi-Fi Company. Being interested third party stakeholders, as per the auditor opinion,
company has complied with the applicable laws and regulations and maintained sustainable

business practice in long run. It is analyzed that the auditor independences has also show that
auditors has no relation with the company and given their opinion on the basis of the
undertaken work and shown that company has complied with the domestic and international
rules and regulation. Now in the end, it could be inferred that company has set up strong
compliance program and also strengthen the listing rules and regulation in determined
approach. Both auditors and directors have discharge their responsibilities and delivered the
best outcomes to the concerned stakeholders.

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