Rationale and Effectiveness of ASA 701 in Australian Banking Industry

Running head: AUDITING AND ASSURANCE SERVICES
Auditing and Assurance Services
Name of the Student
Name of the University
Author’s Note

1AUDITING AND ASSURANCE SERVICES
Executive Summary
The main aims of this report are to discuss about the rationale behind the introduction of new
auditing standard ASA 701 Communicating Key Audit Matters in the Independent
Auditor’s Report and the effectiveness of the auditors in the treat of Key Audit Matters in all
the banks under ASX top 100 listed companies in the Australian banking industry. The report
shows that the demise of Lehman Bros. contributed towards the inception of the new auditing
standard. The outcome of the report also indicates towards the efficiency of the auditors in
treating the Key Audit Matters of the banks in accordance with the new auditing standard.

2AUDITING AND ASSURANCE SERVICES
Table of Contents
Introduction................................................................................................................................3
Rationale for ASA 701...............................................................................................................3
Explanation on ASA 701...........................................................................................................4
KAMs of the Companies under Australian Banking Industry...................................................4
Industry Selection...................................................................................................................4
KAMs of the Australian Banks..............................................................................................4
ANZ Banking Group Limited............................................................................................4
Bank of Queensland...........................................................................................................4
Commonwealth Bank.........................................................................................................5
Medibank Private Limited..................................................................................................5
National Australian Bank...................................................................................................5
Westpac Banking Group....................................................................................................6
Conclusion and Recommendations............................................................................................6
Reference....................................................................................................................................8