Key Audit Matters in Australian Banking Companies

Audit
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Contents
Introduction............................................................................................................................................3
Extent, research and application............................................................................................................3
Importance, evaluation, analysis............................................................................................................4
National Australian bank...................................................................................................................5
Bank of Queensland limited..............................................................................................................6
Commonwealth bank of Australia.....................................................................................................7
Westpac limited.................................................................................................................................9
Recommendation.................................................................................................................................10
Conclusion...........................................................................................................................................11
References............................................................................................................................................12

Introduction
This report will undertake to examine key audit matters according to ASA 701, which lead to
communicate main key audit matters of organization in order to create transparency
through independent reports of the Auditors. ASA 701 standard identifies that whether
the company strives to communicate right information or not (Chen, and Su, 2016). In
this report, it will be analyzed whether the company has been reporting ASA 701 by
identifying the key audit matters. This report will analyze the annual reports of the
banking companies of Australia such as ANZ, Westpac, national bank of Australia,
commonwealth bank of Australia, and Queensland limited bank. Apart from this, this
report will prioritize the application of ASA 701 and will also try to ensure that financial
reports are prepared transparently with accordance to compliance of all the existing rules
and regulations (Gelderen, Hesselink, Westert, Robben, Boeijen, Zegers, and
Wollersheim, 2017). Further, it is important to value the trust and confidence of the
shareholders and customers because they have the power to create the importance of
corporate social responsibility (Kulikova, Sokolov, Ivanovskaya, and Akhmedzyanova,
2015). In some instance, this report will examine the importance of this standard and the
case of Lehman Brothers bankruptcy has led to the shake AASUB standards to launch the
standard of ASA 701 communicating KAMs so that they can promote transparency
(Kulikova, Sokolov, Ivanovskaya, and Akhmedzyanova, 2015).
Extent, research and application
The best example of non-compliance and lack of transparency in regards to fulfilling the
audit needs and key audit matters in the organization. Further, there is common

discussion of the collapse and scandal of Lehman Brothers. This scandal resulted in
building of the strict AAS where the auditors will be bound to ensure and check whether
the company complies with the accounting standards for the accounts and reports its
transactions. Lehman Brothers scandal is the event of misrepresentation of the data that
has further led to liquidation and bankruptcy with the included environment of great
depression (Chen, and Su, 2016). When complying to accounting standards and achieving
transparency, it has been identified as mandatory action to communicate certain rules and
other key audit matters as per AASB so that auditors can monitor high risk and
fluctuating financial assets in the financial statements. Collapse of Lehman Brothers, it is
seen that there are several loopholes and unidentified gap lying between the directors and
the management, which means there is a lack of communication. In relation to address
transparency, inadequate, internal auditing, and misconduct brought some of the
important regulation in order to address transparency and its compliance. From the
scandal of Lehman, the organization gave home loans to the common people and with the
financial crisis in 2008, the prices of houses shattered like anything leaving the people
who have been asking for the value. Lehman was empty handed and this leads to collapse
of Lehman and bankruptcy. With the collapse of capital market with low market rates,
people are not able to get same level of value (Andersen, and Hansen, 2018).
Importance, evaluation, analysis
KAMs (key audit matters) take into consideration the professional judgment which is directly
associated with the transparency in the financial statements. Auditors will delegate their
perception in regards to financial activities and its relevancy to the description. Audit will
be addressed on the basis of guidelines for the next few years (Chen, and Su, 2016).