Audit Report Analysis

Running head: AUDIT REPORT ANALYSIS
AUDIT REPORT ANALYSIS
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Author Note

1AUDIT REPORT ANALYSIS
Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Causes....................................................................................................................................3
Factors....................................................................................................................................3
Benefits..................................................................................................................................3
Conclusion..................................................................................................................................3
References..................................................................................................................................3

2AUDIT REPORT ANALYSIS
Introduction
This report is prepared to analyse the audit performance of the Samway Baker
Fitzgerald (SBF). The SBF Company is an accounting firm of Australia having the several
offices across the country. The SBF performed the audit of the company named Far Faraway
Pastoral Limited (FFA) for the year 2018-19 and highlighted the few unauthentic points in
the financial report and in the structure of the board. FFA is an Australian company, which is
listed in the Australian Stock Exchange (ASX). This is the also one of the major agricultural
company of the Australia with head office in the Orange. The objective of the report is to
advise the partner auditor of FFA regarding the ASX Corporate Governance Principle in
relation to their audit performance. Secondly, report is prepared to respond towards the Code
of Ethics for Professional Accountants as per the American Accounting Association (AAA)
for another audit partner of the firm. Lastly, this paper makes a report for the audit company
SBF in relation to the audit performed by the company towards the FFA for the year 2018-
2019 and try to highlight the some disputes of the between the FFA and the McCarran
Pastoral related to the sale of the TRC.
Discussion
Answer to Question 1:
The Samantha Gabrielle is partner of the SBF has the responsibility to perform the
audit of the board of director of the FFA Company. She performed the audit of the board of
the FFA Company and highlighted few points that the company have the five members in
their board. Those are Bruce Blanch the chief executive officer of the company and
Alexandra Rose as the chief financial officer of the company along with the three non-
executive directors (Tricker, 2015). The non-executive director of the company who are the
board member of the company are Kevin Oliver who has the 11% share in the company and

3AUDIT REPORT ANALYSIS
he is the chairperson of the board. Second one is Matthew James who is a retired farmer and
was a major supplier of the firm. The last one is Jacqueline Grace who is an orthopaedic
surgeon by profession from the Orange city (Lama & Anderson, 2015).
Based on the above information provided by the Samantha Gabrielle, this report
highlights the some points where the structure of board of the company FFA breached the
Corporate Governance Principles and Recommendation of ASX. The points are followings:
 The board must have a nomination committee to take the business decisions. But here,
the FFA does not any nomination committee to take the operation related decisions.
 The listed company in ASX, must have the majority of the independent director in
their board. However, FFA does not have the majority of the independent director in
their board (Chandrakumara, McCarthy & Glynn, 2018). As the total number of
director in the board is five out of them two is CEO and CFO and two out of the rest
three non-executive directors are also dependent because the one has the 11% stake in
the company while the other is the former supplier of the company.
 As per the ASX, the board of directors must have an independent director as the
chairperson of the board but the company have the Kevin Oliver as the chairperson of
the board who dependent by having the 11% stake in the company (Houqe, et al.,
2015).
 Lastly, in the absence of the nomination committee, the board of director must have
the proper relevant knowledge and experience of the business of the company to take
the decision and need to reveal their qualification and experiences (Safari, 2017).
However, the FFA does not have any nomination committee and one of the
independent director of the board named Jacqueline Grace does not have any relevant
knowledge and experience of the business of the company, as she is an orthopaedic
surgeon.