Auditing Principles in Coca Cola Amatil: Significance and Corporate Governance

Coca cola Amatil
Executive summary
Auditors play a very important role in the identification of material risks in the financial
statements so that it can be determined whether the financials of the company depict a true
and fair view of its performance. Further, stakeholders can take effective decisions based on
the audit report and audit opinion offered by the auditors. In other words, users can decide
whether the financials are true to the best of knowledge of directors and management. This
report has highlighted the significance of auditing principles in Coca cola Amatil Ltd. The
company’s corporate governance principles have been highlighted through this report. For
such purpose, its key audit matters and non-audit services have been reflected for better
understanding. In addition, material subsequent events and whether the company has reported
material information effectively or not can also be sought through this report.
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Coca cola Amatil
Contents
Introduction...........................................................................................................................................2
Association with the independent requirements..................................................................................3
Non-audit services.................................................................................................................................3
Key audit matters..................................................................................................................................3
Audit committee....................................................................................................................................4
Audit opinion.........................................................................................................................................4
Distinction betwixt management and auditor’s duties..........................................................................5
Material subsequent events..................................................................................................................5
Material details reported by auditors....................................................................................................6
Effectiveness of information disclosed by auditors...............................................................................7
Missing or under-reporting of information...........................................................................................7
Conclusion.............................................................................................................................................8
References...........................................................................................................................................10
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Coca cola Amatil
Introduction
From the financial performance of Coca cola Amatil, it must be noted that the company must
undertake proper internal control measures so that it can outperform its competitors in the
market. Besides, the role of auditors is the prime requirement in this case as they can assist in
identification of material risks in the financial statements so that the organization is
safeguarded from future complications and danger. Based on the annual report, the auditors
have asserted that the company has reflected a true and fair view of its performance and that
includes proper disclosures on non-audit services, key audit matters, and remuneration
segments (Cocacola Amatil, 2017). This can be proved by the fact that the company has
effectively adhered to the requirements of Corporations Act that sheds light on such matter.
Overall, this report can assist in depicting the auditing measures adopted by the company that
further highlights the significance of audit processes in the current scenario.
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Coca cola Amatil
Association with the independent requirements
From the company’s annual report, it can be observed that it has functioned in a way that can
address the requirements of all crucial rules and regulations, and that has allowed it to thrive
in the industry. In addition, the company’s accounting standards have been effectively
fulfilled that sheds light on the focus asserted by it towards such compliances. Moreover,
there was no independent needs that was not addressed by the company. This was also
highlighted in the annual report of the company and the auditors have approved of the same.
Nevertheless, the compliance with Corporations Act 2001 makes it clear that the company
has portrayed a true and fair view of its financial performance to the users.
Non-audit services
The company’s audit team has provided some non-audit services in addition to the auditing of
financial statements. For example, they have assisted in offering in advising legal and ethical
issues that must be addressed in relation to non-audit services. The company has also
assessed its committee of risk management to ensure that an efficient decision-making
measure is facilitated. Nevertheless, the non-audit services that have been offered to the
organization have been effectively reflected in the audit report so that the users can ascertain
what type of services have been offered by the auditors to the company on a whole. Overall,
it must be noted that the compliance with regulatory norms like Corporations Act 2001 can
assist in determining whether the audit and non-audit services are truly disclosed or not
(Cocacola Amatil, 2017).
Key audit matters
The intangible assets value of the company in the current scenario reported at $929.3 million.
Moreover, its goodwill reported at $147.5 million and its value of trademark reported at
$13.8 million. Furthermore, other assets of the company consisted of $2.5 million value that
were held together in its financials and as a result, reported a total of $1093.1 million.
Moreover, all such assets consisted of more than eighteen percent of the net assets prevalent
in the balance sheet (Cocacola Amatil, 2017).
It is also clearly visible in the company’s financials that all the expenses of impairment in
relation to intangible assets including other assets must be effectively corrected and noted
with the assistance of CGU (cash generating units). Assumption and estimation of
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