Audit Report Analysis of Harvey Norman Holdings Limited

HI6026 Audit, Assurance and Compliance
Trimester 2 2018
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EXECUTIVE SUMMARY
This report reflects the key information given in the audit report and responsibilities
of the auditors. This report has been prepared on the selected company named Harvey
Normal Company. The audit report analysis, structure and responsibilities of the auditors
have been analyzed in this report. Harvey Norman Holding Limited is the company chosen in
the current research study. The group has the auditors named Ernst & Young who have issued
a clean report regarding the financials of the entity and the related controls. The report has
significantly laid the independence declaration that the auditors have made and the nature of
the non-audit services in form of tax compliance and others is also specified. The company
has paid overall remuneration to the auditors that has shown a certain rise when audit services
are concerned. The rest of the matters are briefly explained in the report presented herein.
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Table of Contents
EXECUTIVE SUMMARY........................................................................................................2
INTRODUCTION......................................................................................................................3
AUDITOR’S INDEPENDENCE...............................................................................................3
PROVISION OF NON-AUDIT SERVICES.............................................................................3
AUDITER REMUNERATION.................................................................................................4
KEY AUDIT MATTERS..........................................................................................................4
AUDIT COMMITTEE & AUDIT CHARTER.........................................................................6
STRUCTURE............................................................................................................................6
FUNCTIONS.............................................................................................................................6
RESPONSIBILITIES.................................................................................................................6
AUDIT OPINION......................................................................................................................7
DIFFERENCE BETWEEN THE RESPONSIBILITIES OF MANAGEMENT AND
AUDITOR..................................................................................................................................7
MATERIAL SUBSEQUENT EVENTS....................................................................................7
CONCLUSION..........................................................................................................................8
REFERENCES...........................................................................................................................8
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INTRODUCTION
The background of the current report lies on the reporting requirements related to the
auditor that are initiated by the International Auditing and Assurance Board (IAASB).
Following the line of these new requirements the current report analyses the company’s
annual report. The areas analysed include the declaration for auditor’s independence, report
of independent auditor, the performance of non-audit services by the auditor, remuneration of
auditor, the composition of the audit committee, and its role and functions, and key
consideration to the audit report issued by the auditor with special emphasis on the key audit
matters. The limelight question is if the company has followed with all the reporting
requirements in its annual report. All the assurance services as related to the auditor are also
reviewed. The company selected for the case study purpose is Harvey Norman Holdings
Limited and auditor’s independence and their responsibilities have been analysed to
determine the key information about the company.
AUDITOR’S INDEPENDENCE
The auditors of the Harvey Norman Holdings Limited are named Ernst & Young. It is
well evidenced by the directors that the regulations laid by the Corporations Act 2001 are
well complied. These regulations do relate to the independence of the auditor. Further, the
mention of audit committee is also made. It is specified that the audit committee is also
convinced and have recommended that the auditors have been independent in their operation.
The auditors have also given a declaration to the directors of the Harvey Norman Holdings
Limited regarding their independence (Harvey Norman Holdings Limited., 2016).The
declaration clearly states that the auditors have not made any contraventions as far as the
applicable codes of the professional conduct and the corporations act 2001, in relation to the
audit conducted are concerned (Tepalagul, and Lin, 2015). This auditor’s independence
report has shown how well auditors have performed and their independence with the Harvey
Norman Holdings Limited. It is analyzed that auditors should keep their independence with
the company when they are auditing the financial statements (Louwers, et al. 2015). In the
audit report, it is considered that auditor has complied with Independence requirements of the
auditing and assurance.
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