Audit, Assurance and Compliance of Harvey Norman Company

HI6026 Audit, Assurance and Compliance
Trimester 2 2018
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EXECUTIVE SUMMARY
Audit and assurance has been gaining momentum throughout the time to increase the
effectiveness and transparency of the financial statement prepared by company. The audit
process is used to analysis the whether company has been revealing the true and fair view of
the recorded assets and liabilities in its books of account. This report focuses on the auditor’s
functions, responsibilities, undertaken work and auditor’s opinion and material subsequent
events of selected Harvey Norman Company.
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Table of Contents
EXECUTIVE SUMMARY...........................................................................................................................2
INTRODUCTION.....................................................................................................................................4
AUDITOR’S INDEPENDENCE..........................................................................................................4
PROVISION OF NON-AUDIT SERVICES.........................................................................................5
AUDITER REMUNERATION.............................................................................................................5
KEY AUDIT MATTERS......................................................................................................................6
AUDIT COMMITTEE & AUDIT CHARTER.....................................................................................7
STRUCTURE....................................................................................................................................8
Functions and responsibilities of Harvey Norman Company.............................................................9
AUDIT OPINION.................................................................................................................................9
DIFFERENCE BETWEEN THE RESPONSIBILITIES OF MANAGEMENT AND AUDITOR.....10
Auditor’s responsibilities.................................................................................................................10
Director’s responsibilities................................................................................................................10
MATERIAL SUBSEQUENT EVENTS..............................................................................................10
CONCLUSION...................................................................................................................................11
REFERENCES....................................................................................................................................12
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INTRODUCTION
The international auditing and assurance board has issued several audit and assurance
rules and standards which need to be complied by the listed company to keep the business
more transparent to its stakeholders. The auditor The Ernst & Young has stated in its report
that company has disclosed all the material information in its note to disclosure. This report
assists in identifying the rules and accounting standards which company failed to comply.
The auditors of company are working in the fiduciary position towards its stakeholders.
Therefore, it is their responsibility to keep the financial and business information more
transparent towards the stakeholders. It is necessary to provide the proper and clear
information to the stakeholders if company wants to keep its business more transparent to
them. These requirements are for the enhancement of transparency and value of information
of auditor’s report. All the stakeholders are required to be informed through the annual report
of the company and the same would be audited by Auditors. All such information is related to
the auditors and the audit reports of the company. The Ernst & Young is the auditor of
company who has been implementing the audit and assurance program for evaluating
whether company has complied with the applicable international financial accounting
standards. These reports showcase how Enhanced Auditor Reporting is being embraced in
Australia to disclose the fair view of the assets and liabilities to the stakeholders
The auditor The Ernst & Young has given non-qualified audit report with some disclaimers.
These disclaimers are given to identify the failure of company to comply with the certain
rules and accounting standards (Harvey Norman Holdings Limited., (2016).
AUDITOR’S INDEPENDENCE
Harvey Norman Holding Company is listed company which is offering the retail
services to its clients. The auditor of Harvey Norman Holding Company is Ernst & Young
who has been auditing the financial statements of company so that it could identify errors and
frauds of the company. The Auditing standards of Australian Securities and Investment
Commission lay down certain principles in its different-different legislations for the
independence of the Auditors. Maintaining independence will create a relationship between
client and auditor. There are some areas where auditor should be aware and implement his
appropriate responses. These areas are in the form of some conflict of interest situations like
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