Auditor Reporting in Australia: Key Audit Matters and Compliance

Running head: AUDITOR REPORTING IN AUSTRALIA
Auditor Reporting in Australia
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Executive Summary
In highly competitive business environment, some strategies are required to be
implemented by the audit committee for ensuring the audit report quality and improving it
in the upcoming years. The paper revealed that the audit partner of Telstra reported that
the audit committee of the company has clear framework for decision making along with
accountability all through the business. It was also gathered that “Corporations Act 2001,
Australian Auditing Standards along with APES 110” has been followed by the company in
explaining all its audit matters based on which important steps are taken by the company in
decreasing it. Moreover, the directors are also observed to be satisfied with the advices
offered by its audit partner based on which they take decisions on attaining the auditor’s
independence requirements. This also considers taking decisions on auditors’ commitments
and remuneration, contingencies and commitments along with developing the parent
company disclosures.

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Table of Contents
1. Introduction......................................................................................................................... 3
2. Requirements of Auditors Independence Compliance.........................................................3
3. Non-audit Conducts..............................................................................................................4
4. Auditor Renumeration Analysis............................................................................................5
5. Key Audit Matters of Telstra.................................................................................................6
6. Audit Committee Responsibility Description........................................................................8
7. Evaluation of Telstra Audit Opinion......................................................................................8
8. Difference in Accountability between Directors and Management.....................................9
9. Material Based Activities of Telstra......................................................................................9
10. Effectives of Telstra Company’s Material Information.....................................................10
11. Material Information that is Under-Reported and Not Disclosed....................................11
12. Follow-Up Questions for Auditors....................................................................................11
13. Conclusion........................................................................................................................ 12
References..............................................................................................................................13

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1. Introduction
The auditor of any organization has the responsibility of analyzing the misstatement
risk and auditing also serves as a vital business function which involves analysis of
documentation as well as evidence regarding transaction and economic conducts of the
company (Backof, Bamber and Carpenter 2016). The data extracted from the auditor’s
report is used by the stakeholders of the company for making several business decisions
making. Moreover, in highly competitive business environment, some strategies are
required to be implemented by the audit committee for ensuring the audit report quality
and improving it in the upcoming years. Auditing in the companies has the responsibility of
offering comfort regarding management accounts accuracy along with identifying the
systematic errors that can take place in representation of material information (Carson,
Fargher and Zhang 2016). The process by means of which audit in an organization is carried
out explains the challenges related with internal controls and reporting processes followed
within the companies. Focused on such statement, the objective of the current report is to
analyses the current annual report for Telstra Company related with several audit factors
related with the company’s reporting. Considering the same, it is also extracted from the
annual report that Ernst and Young is the audit partner of the organization selected for this
report.
2. Requirements of Auditors Independence Compliance
From analyzing the annual report of Telstra, it is gathered that the board of directs
confirmed that certain guidelines within ‘’Accounting Professional and Ethical Standards
Board’s APES 110 Code of Ethics for Professional Accountants’’ and “Corporations Act 2001”
are the necessary financial reporting standards followed by Ernst and Young being the audit