Analyzing Research Papers on Auditing

This assignment requires you to critically analyze a set of research papers focused on different aspects of auditing. The provided papers cover topics such as auditor independence, the role of audit committees, the influence of audit fees on quality, and the impact of global audit firm networks. You are expected to summarize the main findings of each paper, identify key arguments and methodologies used, and evaluate the overall contribution of each study to the field of auditing.

Running head: AUDITING, ASSURANCE & SERVICES
Auditing, Assurance & Services
Name of the Student
Name of the University
Authors Note
Course ID

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Executive Summary
The report has assessed the risk of material misstatement and risk assessment as per “ASA
315” and Auditor’s opinion on managing the risks in the financial report and Audit of the
transactions which took place during the period. The learnings of the report have included
“Auditing and Assurance Standards Board (AUASB)” as per “ASA 570 Going Concern”
pursuant to “section 227B of the Australian Securities and Investments Commission Act
2001”. The findings of the report have inferred that the audit risk committee of Boral Limited
has taken into account the factors such as “role and responsibility, structure and
composition”. The auditor’s responsibility is able to confirm that the auditing committee at
Boral is responsible for the depiction of the financial reportage as per the guidelines
prescribed under ASA 570, “section 336” of the “Corporations Act 2001” and Going
Concern” pursuant to “section 227B”.

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Table of Contents
Introduction................................................................................................................................3
Risk of material misstatement and risk assessment as per ASA 315.........................................4
Auditor’s opinion on managing the risks in the financial report...............................................5
Audit of the transactions which took place during the period...................................................7
Conclusion..................................................................................................................................8
References..................................................................................................................................9

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Introduction
The assertations made as per “The Auditing and Assurance Standards Board
(AUASB)” has considered the key judgements based on “Auditing Standard ASA 701” to
communicate the “Key Audit Matters” in the “Independent Auditor’s Report” which is
pursuant with “section 227B” of the “Australian Securities and Investments Commission
Act 2001” and “section 336 of the Corporations Act 2001” (Bryce, Ali and Mather, 2015).
The choices made in the financial report is significant as per “ASA 701 involving Key
Audit Matters in the Independent Auditor’s Report”. The discourse of the study has ensured
the compliance of the presentation of the financial statement with the adherence to the “ISA
701”. The application of the “ASA 701” is considered with the assurance given by “AUASB”
as per “ISA 701”. (Martinov-Bennie, Soh and Tweedie, 2015).
The learnings of the report have further included “Auditing and Assurance
Standards Board (AUASB)” as per “ASA 570 Going Concern” pursuant to “section 227B
of the Australian Securities and Investments Commission Act 2001” and “section 336” of
the “Corporations Act 2001”. In addition to this, the auditing standard is read with the “ASA
101 Preamble to Australian Auditing Standard”. The risk assessment areas pertaining to
this standard has discussed about “Arrears or discontinuance of dividends”, “Net liability or
net current liability position”, “Negative operating cash flows indicated by historical or
prospective financial report” and “Adverse key financial ratios” (Ruwanpathirana, et al.,
2014).

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Risk of material misstatement and risk assessment as per ASA 315
The auditing compliance as per the rulings of “ASA 315 Identifying and Assessing
the Risks of Material Misstatement through Understanding the Entity and Its
Environment” is considered in aggregation of “ASA 101 Preamble to Australian Auditing
Standards”. This is also measured to be in compliance with the intentions of “AUASB” as
per the commencements made in the financial report published after 1st January 2010. In
addition to this, the conjunction of the audit matters is considered with “ASA 200 Overall
Objectives of the Independent Auditor” along with accompanying the audit report as per
“Australian Auditing Standards” (Hines, et al., 2015).
The inference made from the “A31 under Auditing Standard ASA 315” has adhered
to the nature of the revenue sources along with the risks like the “industry segmentation,
geographic dispersions, sales, marketing and joint ventures,”. The risk factors are further
taken into account with the severity beyond the control of the organization. Material
misstatement risks are considered to be critical to the organisation’s long-term growth. The
risks associated to the OFR is critical to the performance of the Boral Limited. The wide
spectrum of the inherent risk factors for Boral Limited is based on the CG statement which is
stated in the “pages 30-43 of the annual report” (Huang, et al., 2014).
The important discussions of “Auditing Standard ASA 315” is considered with the
“Conditions and Events That May Indicate Risks of Material Misstatement” based on the
market volatility. Furthermore, the depictions made in the “A13 under Auditing Standard
ASA 315” has taken into account the associated risk factors which are mainly seen due to the
non-compliance of the auditing norms. The factors such as deficiency in the internal control
and financial reporting is important risk factor in Boral Limited. The market and the industry
risk in the company is seen to be in compliance with residential and non-residential risks. The
“non- residential” risk such as “infrastructural risk” in the construction industry and

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residential risk such financial performance are closely linked to one another. The different
considerations made for the geopolitical effects and performance of the company is discerned
with the areas in which the company is seen to be mainly operating (Karalapillai, et al.,
2014).
The consideration of the other risk factors is stated in form of the fixed costs
associated to the building material and construction. In addition to this, the interruptions in
the production has left the scope of operations being affected. The manufacturing risks at
Boral is seen to be based on the “unanticipated failures, major events or incidents”
(Karalapillai, et al., 2014). The risks associated to foreign exchange is mainly considered
with the operation of Boral located in areas such as “Australia, Asia and USA” (Rahmina and
Agoes, 2014).
Auditor’s opinion on managing the risks in the financial report
The industry risk and the market risk are addressed with the inclusion of the several
measures which is based on the presence of the significant initiatives to minimize the cost
and aim at efficiency. Boral Limited seeks to encourage the sustainable performance as per
the considerations which is based on the “organisational restructuring, geographic
diversification and appropriate allocation of capital expenditures” and other factors having
the potential for robust growth in terms of earnings (Karalapillai, et al., 2014). Boral is able to
manage the risk aspects with the geographic diversification and attributing the capital
expenditures in the business. The company uses hedging and “electricity demand
management” for mitigating the risks pertaining to short term changes in fuel costs
(Badertscher, et al., 2014).
The competition risks are controlled with the introduction of the commercial
excellence and customer centric programs which is able to seek for sustainability in terms of

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the lesser cost, optimization of capacity which are related to the higher margin in business
and increasing the share and size of Boral. The company is depicted to take sufficient
initiatives in terms of other factors which are related to the development of the products in the
core markets (Van Asseldonk and Velthuis, 2014).
The health and safety factors are managed with adherence to a strict operating
procedure and ensuring the agreement of environmental laws. Boral Limited focuses on the
better safety outcome which is considered to be a part of the long-term strategy and viewed
with the broader strategy for delivering world class safety performance (Levola and Aalto,
2015).
In this program the company covers the crisis management training and business
continuity factors. The important risk factors are encompassed with the comprehensive group
insurance regime. This has the potential to cover the damage for the facilities and business
interruption risk along with product performance.
The commercial systems, manufacturing assets and the financial systems which are
considered as per the dependency on the information technology is reliant on the
“information technology systems, capabilities and assets”. These factors for the company
raises further risk in terms of cyber security. Boral Limited is able to mitigate such risk
factors with satisfactory “risk awareness training, market leading defence and firewall
system” (Contessotto and Moroney, 2014).
The different perspectives of the foreign risks at Boral Limited is matched with the
significant factors such as assets and USD denomination of debt as per the fluctuations. The
company is seen to utilise the forward exchange contracts with the equipment supply and
material against for the medium term and short term fluctuations.

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Audit of the transactions which took place during the period
The Kam decisions during the period has been taken into attention with the adherence
to the “para 9 of ASA 701”. The judgements taken from these ruling is related to the matters
having the significance on the financial report. The audit risk is seen to be based on the
identification and relatedness of the material misstatement in the financial report. Significant
considerations such as “account balance, disclosures and the account disclosures” are
conducive in stating on the significant risk a per material misstatement and assertion level
(Amir, Kallunki and Nilsson, 2014).
Based on the “para 9 of ASA 701” the auditors may be able to develop the significant
nature of the initial views taken in the planning stage related to the “key audit matters”.
Based on this, the auditors will be able to adhere to the to “ASA 260” and to “section 227B
of the Australian Securities and Investments Commission Act 2001” and “section 336” as
per “ASA 570 Going Concern”. The determination of these standards is determined in the
entire audit report. It has been also seen that “ASA 260” has stated on the important risk
factors which was suggested by the auditors. This particular consideration is seen to be in
pursuant with “Paragraph A13 of ASA 260” which discusses on the governance plans and
mitigation of the important areas of risk.
The managements initiative for the going concerns is understood as an important part
of the auditor’s consideration for all the associated risk factors. There is not a single instance
where the company has not assessed the detailed analysis of the management’s going
concern.
The audit risk committee of Boral Limited has taken into account the factors such as
the consideration for the relevant aspects related to “role and responsibility, structure and
composition” (Van Buuren, et al., 2014).

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The learnings as per the annual report of Boral has considered EBIT and non-IFRS
measures. This has been able to provide a greater understanding of the key areas related to
the business performance. The acquisition made by headwaters is able to review the study on
the environmental and the exposure associated to the safety concerns. This combination of
business is seen to be having a significant role in bringing the operation up to the required
standards.
The focus on report has stated that the Boral is subjected to report for the safety
observations and near miss reporting. The important concern linked to the safety of Boral
Limited is taken into account with integration of the activities as the forefront of the
headwaters. The audit process at Boral Limited has included the substantial attention for
“clear accountability, training, internal and external audits”. Boral has conducted a total of 85
license permits for environmental concerns. This is particularly seen with the compliance to
audit reporting of Australia in 2016. This initiative taken by the company is identified to be
developed with 105 actions plans.
Conclusion
The discussion as per as per risk of material misstatements and “ASA 315” has stated
that the standards as per “A31 under Auditing Standard ASA 315” has adhered to the nature
of the revenue sources along with the risks like the “industry segmentation, geographic
dispersions, sales, marketing and joint ventures,”. The important factors of success for Boral
Limited has adversely impacted the severity of the risks which are under organization’s
control.

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References
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partners’ risk preferences and the composition of their client portfolios’, Review of
Accounting Studies, 19(1), pp. 103–133. doi: 10.1007/s11142-013-9245-8. Hhs.se. (2018).
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Van Asseldonk, M. A. P. M. and Velthuis, A. G. J. (2014) ‘Risk-based audit selection of
dairy farms’, Journal of Dairy Science, 97(2), pp. 592–597. doi: 10.3168/jds.2013-6604.
Badertscher, B., Jorgensen, B., Katz, S. P. and Kinney, W. (2014) ‘Public Equity and Audit
Pricing in the United States’, Journal of Accounting Research. doi: 10.1111/1475-
679X.12041.
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[Accessed 20 Jan. 2018].
Bryce, M., Ali, M. J. and Mather, P. R. (2015) ‘Accounting quality in the pre-/post-IFRS
adoption periods and the impact on audit committee effectiveness - Evidence from Australia’,
Pacific Basin Finance Journal, 35, pp. 163–181. doi: 10.1016/j.pacfin.2014.12.002.
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10.2308/ajpt-50760.
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Coetzee, P. and Lubbe, D. (2014) ‘Improving the efficiency and effectiveness of risk-based
internal audit engagements’, International Journal of Auditing, 18(2), pp. 115–125. doi:
10.1111/ijau.12016.
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Hines, C. S., Masli, A., Mauldin, E. G. and Peters, G. F. (2015) ‘Board risk committees and
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Geertsema, J., Bangia, R., Fitzgerald, J., Phan, T., OHallaran, L., Cocciante, A., Watson, S.,
Story, D. and Bellomo, R. (2014) ‘Current ventilation practice during general anaesthesia: A
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Levola, J. and Aalto, M. (2015) ‘Screening for At-Risk Drinking in a Population Reporting
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M. N. (2014) ‘Assessment of vitamin D and its association with cardiovascular disease risk
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