Auditing and Assurance Services for Amcor Limited

This report evaluates the assurance services of auditors of Amcor limited listed on Australian stock exchange. For the purpose of analysis, report includes the evaluation of compliance of auditors with independent requirement along with analysis of non audit services. Analysis of remuneration of auditors has been presented along with evaluation of key audit matters. In addition to this, the evaluation of audit committee of Amcor limited in terms of function, structure and responsibilities. The material information that has been identified by the auditors is assessed by presentation of adequate reasons.

Running head: AUDITING AND ASSURANCE SERVICES
Auditing and assurance services
Name of the University
Name of the student
Authors note

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Executive summary:
The report is prepared for evaluating the assurance services of auditors of Amcor limited listed
on Australian stock exchange. For the purpose of analysis, report includes the evaluation of
compliance of auditors with independent requirement along with analysis of non audit services.
Analysis of remuneration of auditors has been presented along with evaluation of key audit
matters. In addition to this, the evaluation of audit committee of Amcor limited in terms of
function, structure and responsibilities. The material information that has been identified by the
auditors is assessed by presentation of adequate reasons.

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Table of Contents
Introduction:....................................................................................................................................4
Discussion:.......................................................................................................................................5
1) Evaluation of the auditor’s assurance services:...........................................................................5
2) Compliance of auditors with independence requirements:.........................................................6
3) Nature of non audit services:.......................................................................................................6
4) Analysis of remuneration of auditors:.........................................................................................6
5) Evaluation of key audit matters:..................................................................................................8
6) Evaluation of audit committee:.................................................................................................10
7) Audit opinion expressed:...........................................................................................................12
8) Difference between the auditors and management responsibilities:.........................................12
Conclusion:....................................................................................................................................14
Reference list:................................................................................................................................15

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Introduction:
The report is prepared for summarizing and evaluating the assurance services provided by
auditors for Client Company. This include analysis of other pertaining areas of auditing such as
non auditing services, remuneration, audit committee, key audit matters, audit opinion, audit
committee (Kiss et al., 2015). For the purpose of analysis of auditor’s assurance services, the
company that has been selected is Amcor limited. Amcor limited is a global leader in producing
and developing high quality and packaging for variety of beverage, food, pharmaceutical,
medical device, home care products in a responsible manner. It has been found from the annual
report of company that they relies conducting internal second party audits on a three year
frequency. The action plan of company addresses continuous efforts for improvement and
findings of audit. Monthly report on compliance with Amcor standards and safety performance
is provided by the business group of Amcor to the board of directors. A global initiative is
implemented by organization relating to injuries and conducting audit across all manufacturing
units (Alon & Vidovic, 2015). Moreover, report also demonstrates the assessment of
effectiveness of material information that is reported by the auditors of Amcor limited.
Discussion:
1) Evaluation of the auditor’s assurance services:
The audit committee of Amcor limited is a platform for processing regular reporting
about the framework of risk to the board. Management of Amcor undertakes review of
independent loss prevention audits and purchasing external assurance whenever it is considered
appropriate. In the current financial year as for the financial report for year 2018, the auditor of
Amcor limited is Pwc (PricewaterhouseCoopers) that performed statutory duties along with

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some other services. The notes to financial statements in the annual report disclose the details of
the amount that is paid to the auditor.
2) Compliance of auditors with independence requirements:
3) Nature of non audit services:
Non audit services provided by Pwc is mostly related to compliance services and giving
advice on taxation. Advice on taxation matters has been provided by Pwc since year 2000. The
non audit services provided by auditor during this particular financial year have been considered
by the board according to the written advice provided by the resolution of Compliance and audit
committee. The provision made for non audit services by auditors has been satisfactory on part
of board indicating that such provisions are compatible and requirement of auditor’s
independence of the Corporation Act, 2001 has not been compromised. It was so because all the
non audit services were subjected to the procedures of corporate governance adopted by Amcor
limited that has been reviewed by the committee for ensuring that it does not have any impact on
the objectivity and impartiality of auditors. Approval of all non audit services is done according
to the approval frameworks and delegations of non audit services. Furthermore, general
principles relating to auditors independence are not undermined by providing non audit services
because auditors own work is not audited or reviewed, acting as company advocate for jointly
sharing risk and reward and acting in decision making or management (Fuhrmann et al., 2017).
4) Analysis of remuneration of auditors:
The auditor’s remuneration section includes the additional information that is required by
Corporation Act, 2001 and accounting standards. Auditors are paid for audit and other assurance
services and other services. They charge maximum amount for other regulatory audit services

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and for reviewing and auditing of financial reports of the company. For the other services, the
maximum amount is charged for taxation services, due diligence and transaction related to
taxation advice. Remuneration of auditors service also include making payment for other
regulatory services, transaction related taxation advice and other regulatory services of non Pwc
audit services. It can be seen from the remuneration section of auditors that there has been
decrease in total remuneration paid to auditors from USD thousand 8145 in year 2018 to USD
thousand 8897 in year 2017. However, total amount of remuneration paid for audit and assurance
services has increased from USD thousand 6422 in year 2017 to USD thousand 7048 in year
2018. On other hand, remuneration for other services has decreased from USD thousand 1939 in
year 2017 to USD thousand 917 in year 2018 respectively (Amcor.com, 2018). Therefore,
decrement in total remuneration is attributed to a significant decline in other services provided by
Pwc.

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Remuneration of auditors:
(Source: Amcor.com, 2018)
5) Evaluation of key audit matters:
Key audit matters are matters with most significance in financial report audit in the
professional judgment for current period. No separate opinion is provided by organization on this
matter and they are addressed in the context of financial report auditing. Classification of key
audit matters is presented in the table below:
Key audit matters Addressing of key audit matters
Risk of impairment in carrying value of investment
in AMVIG holdings limited.
 The audit procedure for providing
assurance requires assessing the ability

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Amcor limited does not exercise any control over
in AMVIG holdings limited, although the group
have significant influence. The key audit matter in
this case is potential impairment of investment of
Amcor in AMVIG which has difference in share
price Hong Kong dollar price per share that is
quoted on different stock exchange. Such audit
matter is due to the difference between quoted
share price and carrying value of investment
(Bepari & Mollik 2016).
of group to develop reliable forecast by
comparing the prior year’s performance
of AMVIG with that of forecast used in
prior year model.
 Analyzing the impact of pre tax
discount rates and other possible
growth rate for performing sensitivity
test on the model within a foreseeable
and reasonable range (Kassem &
Higson, 2016).
 The growth rate used in the model is
compared with the industry and
historical forecast and historical results.
Risk of exposure to material indirect tax in Brazil.
An assessment of additional tax is received by
group from tax authorities in jurisdictions other
than those in Australia. Indirect tax claims and
excise from local Brazilian tax authorities are the
most significant assessment. This complexity in
assessment of tax for determining risk is considered
as key audit matter because of change in
circumstances that could lead group to make
payment for taxation, interest and associated
 The audit procedure for assessing the
position of group in relation to excise
claims and indirect tax requires holding
discussion with statutory audit team of
local statutory of Brazil for
understanding relevant judicial and
regulatory environment development.
 The assessment of group regarding the
exposures arising from tax assessment
and taxation risk is compared with any

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penalties (Louwers et al., 2015). latest correspondence that is received
by group (Moroney & Trotman, 2016).
Risk of not accounting or identifying material
income due to exposures of tax across the group.
The tax provision is recognized by the group based
on estimated probable amount of receivable and
payable. It is regarded as key audit matters because
of possibility of change in estimates and judgment
to affect the provision level recorded in the
financial report (Hay et al., 2017). In addition to
this, there is no adequate identification of material
tax exposure in specific country.
 An understanding of the taxation
strategy has been developed by the
group for assessing any regulatory
changes and identifying tax positions
that are uncertain (Soh & Martinov,
2015).
 The historical estimates of the group
are assessed for accuracy by making
comparison of the liabilities required in
previous period.
 The copies of tax advice provided by
lawyers and local tax advisers and
selected communications with local
authorities are inspected.
6) Evaluation of audit committee:
Yes, Amcor limited has Audit and compliance committee. The member of committee
should involve three directors which should include non executive directors who should meet the
independence requirements The Audit and compliance committee of Amcor limited has one
member who was the non executive director in his previous company (Farooq & de Villiers,

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2017). Furthermore, Amcor limited has an audit committee charter of which the responsibilities
calendar forms chart.
Structure of audit committee:
The membership of audit committee consists of three director at least of who should
include non executive directors. Independence requirements that are established by applicable
laws and board should be met by number of directors along with the listing requirements (Soh &
Martinov, 2015). The judgment of board requires involvement of each member as they have the
ability to understand the financial statements. Committee should be of sufficient independence
and size in the judgment and the member has financial and accounting expertise along with
sufficient understanding of the industry in which Amcor carry out its operation. Such
understanding is essential for enabling the committee to discharge their duties effectively in
accordance with the recommendation of ASX Corporate governance principles. The chairperson
and member of committee should be appointed by the board and chairperson should not be the
board chairperson and must be an independent director (Braam & Peeters, 2018).
Function of audit committee:
The function of audit committee is to carry out their role that is delineated in the
responsibilities calendar of Audit and compliance committee. Items to be considered for auditing
might vary by the management with the approval of audit and compliance committee. It is the
responsibility of management to ensure that correct recording of financial statements have been
conducted and explaining the financial performance and position. The committee is not entitled
to conduct the auditing activities and giving true and fair view of financial statements in
accordance with the generally accepted accounting principles and assuring standards of company

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on internal control system. In addition to this, authority can be delegated and formed by
company and such authority delegation can be done to any designated member of committee
(Aguolu et al., 2018).
Responsibilities of audit committee:
The audit committee provided a platform for processing regular reporting to the board on
their status of framework of risk. Audit committee provides assistance to the board of directors
so that they fulfill their responsibility of maintaining the integrity and quality of auditing,
accounting and financial reporting. The main objective of Committee is to oversee the process
of financial and accounting reporting. Scope and adequacy of internal and external audit plans
are reviewed by the audit committee. Process of company to manage the financial risk along with
auditing of the financial statements is overseen by the committee (Zhou et al., 2018). It is the
direct responsibility of committee for the rotation, compensation, oversight and appointment of
external auditors. External auditors of Amcor limited are required to make reporting directly to
the committee. The necessary dismissal and appointment of the vice president of the group of
internal audit should be approved and reviewed by the committee (Chiu et al., 2013). The report
assessed by the Vice president of the group of internal audit is directly reported to the committee
and any member can be requested to call for meeting.
7) Audit opinion expressed:
The report on auditing of financial report of Amcor limited presents the opinion that the
accompanying financial report of controlled entities of Amcor limited and the company itself has
been prepared according to the requirement of Corporation Act, 2001. Assessment of the report
opines that the financial statements of company give a true and fair view of the financial position

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of Amcor limited as on 30th June, 2018. The audit approach used by auditor of Amcor limited
involved designing an audit to provide reasonable assurance about whether the financial stamen
is free from material misstatement due to occurrence of fraud activities or errors (Simnett et al.,
2016). Any object is considered material if they have reasonable expectation to influence the
user’s economic decision based on financial report. The main focus of audit conducted by group
involves making subjective judgment such as uncertain future events and assumptions. In
addition to this, they have also expressed that the financial statements complies with the
Corporation regulation, 2001 and Australian accounting standards. Auditing has been conducted
according to the Australian auditing standards and it is believed that appropriate and sufficient
audit evidence has been obtained that forms the basis of opinion (Seguí et al., 2015).
8) Difference between the auditors and management responsibilities:
The responsibility of management and board of Amcor limited is considerably different
from that of auditors. Concerning the financial report audit, the responsibility of director is to
read information presented and determine whether there is consistency between the information
presented and knowledge obtained from financial report and financial report and any other
information that appears to be misstated materially. Moreover, it is the responsibility of directors
to prepare the financial report of company that gives a true and fair view according to the
Corporation Act, 2001 and Australian accounting standard (Simunic et al., 2017). The internal
control system enabling the financial report preparation in way that gives a true and fair view
indicating absence of material misstatement is determined by director. It is the responsibility of
directors when assessing the financial report to make the assessment of group’s ability to
continue as going concern and disclosure of all matters relating to going concern and using the
accounting rules relating to it. The going concern accounting rules are implemented unless there

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is no intention of director to cease the operations or liquidate the group (Martínez & García,
2018).
The objective of auditors is obtaining reasonable assurance about the financial report
whether it is free from any material misconduct or misstatement due to errors or fraud along with
issuing of audit report based on their opinion. Such assurance given by auditors does not give a
guarantee, although they are a high level of guarantee about detecting any existing material
misstatements. This is so because such audit is conducted according to the Australian auditing
standards. Misstatements in the financial statements can be regarded as material on an aggregate
or individual basis that is expected to influence user’s economic decision that is formed on the
basis of financial report (Auasb.gov.au, 2018).
The historical knowledge of auditor is considered as material value to company. There
are some significant items that are excluded from the computation of return on assets and
earnings per share and such items might be the material events outside the normal operational
activities of business. In view of the risk associated with material misstatement, a materiality
level that is lower than the materiality of overall group is applied through occurring business
groups (Bédard & Courteau, 2015). However, materiality has been identified in tax exposures
material income, indirect tax exposure materiality and impairment risk associated with
investment carrying value.
Conclusion:
The assessment of the effectiveness of material information reported by the auditor of
Amcor limited is presented under this section. Materiality identified by the auditor is regarded as
effective because of the adequate reasons and justifications made by auditors. Concerning the

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impairment risk associated with investment carrying value, it is considered material because of
deficit between quoted share price and investment carrying value. From the analysis of annual
report of Amcor limited relating to auditors opinion on the financial performance, it can be
inferred that the financial report has complied with the requirement of Corporation Act and
Accounting standards.
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