Enhanced Auditor Reporting: A Review of Wesfarmers Limited's Audit Report

EXECUTIVE SUMMARY
As the title of the report is enhanced auditor reporting, the whole report has been revolved
around the matters which have enhanced the value of the audit report being issued by the
company. The report has been framed with four major objectives. The first objective is to review
the report of the auditor annexed in the annual report of the company in detail. The second
objective is to differentiate between what type of services has been provided by the auditor
including non audit services. The third objective is to identify the key audit matters reported in
the auditor’s report and how the same have improved the quality of the auditor report. The last
objective is to ascertain whether the stakeholders shall invest in the company or not. With these
aims and objectives the report has been framed with different sections and chapters.
Contents
EXECUTIVE SUMMARY.........................................................................................................................2
INTRODUCTION.......................................................................................................................................2
DETAILS OF THE COMPANY.................................................................................................................3
AUDITOR COMPLIANCE WITH INDEPENDENCE REQUIREMENTS...............................................3
NON AUDIT SERVICES...........................................................................................................................4
ANALYSIS OF AUDITORS REMUNERATION......................................................................................4
KEY AUDIT MATTERS............................................................................................................................4
AUDIT COMMITTEE AND ITS CHARTER............................................................................................5
AUDIT OPINION.......................................................................................................................................7
DIFFERENCE IN AUDITORS AND MANAGEMENT’S RESPONSIBILITIES.....................................7
MATERIAL SUBSEQUENT EVENTS......................................................................................................7
EFFECTIVENESS OF MATERIAL INFORMATION..............................................................................7
MISSING MATERIAL INFORMATION...................................................................................................7
FOLLOW UP QUESTIONS FROM AUDITOR.........................................................................................8
CONCLUSION...........................................................................................................................................8
REFERENCES............................................................................................................................................8
APPENDICES.............................................................................................................................................9

INTRODUCTION
The audit report has gained the importance for the last decade across the globe. The reason has
been the economic crisis that has occurred due to the sudden collapses of the businesses. The
major collapse has been due to the unreported accounting frauds and mismanagement of the
company. The audit report plays the very important role in every type of industry as it provides
the details of the working of the company and provides the factor on the basis of which the users
of the financial statements as well as the stakeholders takes the decision. For the purpose of this
report, the company – Wesfarmers Limited has been selected out of the ASX listed companies.
The report has started with the compliance of the auditor with the independence requirements
and identifying the nature of the non audit services provided during the year. Then the
remuneration of the auditor has been analysed with the percentage change and the key audit
matters as reported has been discussed in detail with respect to the audit procedures adopted to
substantiate the observation. Then the composition of the audit and risk committee so formed by
the company has been analysed and its charter has been analysed. The responsibilities of the
management and the auditor has been analysed in detail with regard to the financial report of the
company. Lastly the subsequent events and the material information if it has been reported or
unreported during the year have been analysed. Along with this, some questions have been
mentioned which are required to be asked from the auditor as for follow up from the earlier
years. The report has then ended up with the appropriate conclusion.
DETAILS OF THE COMPANY
The company has been into its existence for the last hundred plus years. It has come into
existence in the year of nineteen hundred and fourteen and as the cooperative society of farmers.
The company has its headquarters in the country of Australia and is into the retail sector and has
the chain of departmental stores offering different type of products namely home improvement,
chemicals, office supplies, fertilizers and safety products and coal. At the starting of its business
the company has kept its main motive as to give the return to the shareholders at its satisfaction.
The company is the Australia’s largest retail chain employing more than two lacs employees and
having the base of the shareholder more than five lacs.
AUDITOR COMPLIANCE WITH INDEPENDENCE REQUIREMENTS
Yes, in accordance with the independent auditor’s report of the company, the auditor has
complied with the independence requirements. As per the provisions of the Corporations Act,
2001, the auditor is said to be independent if the following conditions are satisfied:
- He does not influence the policies of the company in relation to finance and operations.
- He does not participate in any manner in the activities relating to the business or
professional matter of the company (Knechel and Salterio, 2016).