Auditing and Ethics - Evolution Mining Limited EVN

AUDITING AND ETHICS – EVOLUTION MINING LIMITED -
EVN
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EXECUTIVE SUMMARY
An activity of an Audit is very necessary in the current scenario for the companies operating in
the different industries. As the title suggest, the report has been revolved on the audit of the
financial statements of the selected company and the compliance of the ethics thereon. Apart
from the importance of the audit, the report has been framed with four major objectives. First and
major object is to equip the audit team about the facts and the circumstances and the levels which
each of the member of the audit team shall consider while conducting the audit. Second object is
to lay down the importance of the concept of materiality in relation to the audit and compliance
activity. The third object is to understand the need of conducting the preliminary analytical
procedures of the company using the financial ratios of the company and the fourth and the last
object is to lay down the importance of the statements of the cash flows of the company and how
the same shall be considered while conducting the audit. With these objectives and the
considerations, the report is being prepared and presented for the members of the audit team.
The data has been collected from the primary as well as from the secondary sources.
Contents
EXECUTIVE SUMMARY.........................................................................................................................2
INTRODUCTION.......................................................................................................................................3
SECTION 1 – MATERIALITY..................................................................................................................3
SECTION 2 - PRELIMINARY ANALYTICAL REVIEW........................................................................5
SECTION 3 – ANALYSIS OF CASH INFLOWS AND GOING CONCERN...........................................6
CONCLUSION AND RECOMMENDATION...........................................................................................6
REFERENCES............................................................................................................................................7
APPENDICES.............................................................................................................................................8

INTRODUCTION
Every company shall get its books of accounts including the financial statements audited by the
competent personnel who shall be the qualified accountant. The need has arisen because of the
consecutive collapses of the companies in the financial as well as the management matters. For
instance – Collapse of the Lehman Brothers, One Tel and others. In this report, the auditing has
been explained with respect to the analysis if the financial statements of the company. For the
purpose of this report the company – Evolution Mining Limited has been selected. The company
is in the sector of the mining and is regarded as the one of the largest company in the industry of
gold miner in Australia and is listed in Australian Stock Exchange. The report has contained the
three major sections. For each of the sections, the annual report of the company for the year 2017
has been considered and for the second section annual reports for the earlier years have also been
considered. In the first section, the concept of the materiality has been discussed in detail with
regard to its meaning and how the different levels of materiality help in the better and efficient
conduct of the audit. It has also highlighted estimate made for the materiality of the company. In
the second section, the preliminary analytical review has been done which has helped the audit
team members to ascertain the areas which require their attention like changes in the major
accounting ratios, risk areas which can affect the opinion of the auditors of the company and so
on. In the third and the last section, the cash flows of the company has been analysed with regard
to the items which have led to the more cash inflows as well as the more cash outflows and along
with the cash flow analysis, the analysis have been done of the going concern risk that the
company has in the future years. The report has then ended up with the appropriate conclusion
and recommendation.
SECTION 1 – MATERIALITY
Anything which has the impact on affecting the decision of the users of results is defined as the
materiality. In terms of the auditing and accounting, the item which can affect the decision of the
users of the financial statements is defined as the materiality (Canning, 2018). The concept of the
materiality has been originated from the world of the accounting rather than the auditing. It’s a
concept of the financial reporting and states that the auditor shall consider the materiality of the
items present in the financial statements of the company while planning as to how the audit shall
be conducted as well as while performing the audit. It is because of the fact that the materiality