Analysis of Myer Holdings Limited

Running head: CORPORATE AUDITING
Corporate Auditing
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1CORPORATE AUDITING
Table of Contents
Part 2: Memorandum to the audit partner........................................................................................3
a. Business risks of Myer Holdings Limited:..............................................................................3
b. Results of analytical procedures:.............................................................................................5
c. Inherent risks identified from business risks and analytical procedures:................................8
d. Key account and key related assertion at risk:.......................................................................10
e. Analysis of inherent risk:.......................................................................................................10
f. Planning materiality:..............................................................................................................10
References:....................................................................................................................................12
Appendices:...................................................................................................................................14

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Part 2: Memorandum to the audit partner
Memorandum
To: The Audit Partner
From: The Auditor
Date: 15/04/2019
Subject: Analysis of Myer Holdings Limited
The following paper includes a critical analysis of the annual report of Myer Holdings
Limited based on its annual report in 2016. The aspects covered in this memorandum include the
following:
a. Business risks of Myer Holdings Limited:
According to the 2016 annual report of Myer, the four major business risks of the
organisation include the following:
External risk or economic risk:
The macro-economic factors like fluctuations in AUD, lower customer confidence,
variations in government policies and natural or unforeseen events such as natural strike or act of
terrorism and weakness in international economy could have unfavourable impact on the ability
of the organisation in accomplishing sales growth. Myer is involved in regular analysis and using
available and economic data for mitigating the future effect on sales. The techniques
implemented by the organisation include capital management, conservative hedging,

3CORPORATE AUDITING
merchandise initiatives and marketing for combating the cyclical nature of business
(Investor.myer.com.au 2019).
Competitive landscape risk:
Myer operates in the Australian retail industry, which is extremely competitive. The
competitive position of the organisation might be affected adversely by the new market entrants,
present competition and increased competition in online platforms (Junior, Best and Cotter
2014). For minimising these risks, Myer has adopted new strategy, which is guided by detailed
customer overview and concentration on providing customer-led offer, Omni-channel shopping
and excellent experiences.
Brand reputation risks:
The positive brand reputation of Myer is critical to develop positive relationships with the
customers, which would result in generation of sales and goodwill towards the organisation. Any
considerable issue or event could draw criticism on the brand and the result would be
unfavourable effect on its share price (Knechel and Salterio 2016). For dealing with the same,
Myer has formulated a group of initiatives and policies for eliminating brand risk that constitutes
of code of conduct, ethical sourcing policy, whistleblower policy, sustainability and
environmental initiatives and marketing campaigns.
Technology risk:
Myer has been increasing on its dependence on technology due to the changing
environment. This might increase the possibility of risk in the malfunctioning of IT systems,
outdated infrastructure in IT or cyber security breach and the effect would be detrimental on
sales, brand reputation and business efficiencies (Knechel 2016). For dealing with these risks,