Enhanced Auditor Reporting in Australia

This report analyzes the implementation of enhanced auditor reporting standards in Australia, focusing on the case of AMP Limited. It examines the revised auditing requirements, the impact on AMP's audit format, and the role of the audit committee. The report also evaluates the auditor's independence declaration, independent auditor's report, and auditor's remuneration, providing insights into the evolving landscape of auditing in Australia.

How is Enhanced Auditor
Reporting being embraced in
Australia? Background and
Context

EXECUTIVE SUMMARY
Auditor reporting being embraced in Australia discussed in context of
2016. The key auditing matter are required subject to CPA Australia
information for enhancing the knowledge of Reporting standards. The reason
of changing the auditing reporting requirement in 2016 discussed with
commencement requirements. Reporting standards are correlated wit the
annual report of AMP considered in the report. Independent auditor report,
audit remuneration are evaluated.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Commentary on Revised auditing reporting standards..........................................................1
Review and analysis of annual report of AMP limited..........................................................2
Evaluation of auditor’s assurance services performed for the client company......................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Auditor's report is a part of disclosure requirement for an organisation
while publishing the annual report in the end of the financial year. Auditing
reporting rules and regulations refired to improve the existing audit reporting
standards to make more effective and viable in organisational reporting
concept (Halligan, 2017). The enhanced reporting standard were implements
and adhered by organisations. Revised auditing requirement and its impact
upon AMP's audit format. Reports published in terms of independent auditors
declaration and remuneration report are critically analysed.
MAIN BODY
Commentary on Revised auditing reporting standards
Audit reposting is process contains complete check of core financial
information, evaluation of material misstatements, subsidiary reports and
standards followed by organisation. The requirement of audit reporting
mainly associated with enhancing the scope and increasing the
approachability of Auditors of organisation. CPA is an Australia's one of the
largest accounting body sustain a global membership of more than 125
countries worldwide. Main objective of the amendments and changes was to
improve the communicative values and enhance relevancy of the auditor's
report through revision under ISA (International standard on Auditing). The
structure mainly associated with excelling and accommodate evolving the
national reporting regimes.
Modifications subject to reform the structure of national financial
reporting rules and guidelines to ensure the key common content with
appropriate communication and auditing are considered in this context. The
new auditing rules was introduced subject to assist the investors and
stakeholders (Carnegie and O’Connell, 2014). Adequate changes in order to
determine the exact financial statements and the information associated
with management considered in auditing reporting standards and related
conforming amendments.
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Review and analysis of annual report of AMP limited
The annual report of AMP limited presents following information
regarding the auditing report and analysis of auditing policies followed by
organisation.
Auditor’s Independence Declaration
This is considered as a declaration requirement fulfilled by auditors
and delivered to directors of company. The directors of company acquired an
independence declaration form the auditors of organisation, Ernst and Young
for the year ended 31st December 2017. In the auditor's declaration of AMP
limited two main points are considered as
a) No contraventions of the auditor independence requirement for the
corporations Act 2001 subject to audit and
b) No resistance subject to apply code of professional behaviour
during the financial year
this declaration was singed by auditor's as Ernst & Young and Tony
Johnson.
Independent auditor’s report
Independent Auditor's report for stakeholder and shareholders of AMP
limited was published by auditors. The auditors of organisation mainly
analysed the financial statements and the perspective of company and
provided an independent opinion. As per the opinion given by auditors, they
have audited the financial report of AMP limited company and its subsidiaries
companies and groups (Rammal and Parker, 2013). A consolidated
statement of financial position as at 31st December 2017, consolidated
statement of cash flow, a statement of change in equity and comprehensive
income statement for end of the year. Summary of various accounting
policies and the director's declaration was provided to organisation. Opinion
is made as per the Corporation Act 2001 in following two points as;
a) Providing a fair and clear aspect subject to consolidating financial
position statements of the group for 31st December 2017.
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b) Australian accounting standards and the Corporation Regulations
2001 are complied to assist the opinion.
In basic opinion it is committed by auditors of organisation that audit is
done on the basis of Australian Auditing standards. Ethical standards
requirements and professional rules as APES 110 are followed, it is also
considered as code of ethics for professional accountants called subject to
determine the essential aspects in this context. Ethical responsibilities are
also considered in the audit report (Demediuk and Armstrong, 2014).
Non-Audit services performed by the Auditor
The audit services committee of company reviewed the details and the
information with amount paid and payable for non audit services provided to
the AMP group while operating subside ray operations for the year ended 31
December 2017. the auditor mainly addressed the provisions of those non
audit services sympathetic to general standard of independence for auditors
obligated by corporation Act 2001. the compressed statement and the
auditing standards are given to the independence in auditing requirement of
the Corporation Act 2001. Following reasons regarding the corporation Act
2001 was evaluate as
 Entire non-audit delegates were approved by the CFO or nominated
delegate of the chairman of the audit committee.
 Those assignments were avoided by the AMP charter of audit
independence while carried out in audit plan.
 12% ($1.9 million) of the total fees was amounted for non-audit
services paid to the amount as the fees paid to the auditors,
decreasing by 9% on the prior year.
Auditors’ remuneration
As per the Audit or review of financial statements shows the total audit
service fees as $16115000, in which audit or review of financial statements
was recorded as $6931000 non-audit services fees were recorded as
$1599000, auditors’ remuneration for AMP Limited and other corporate
entities was recorded as $8530000. managed investment scheme and
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superannuation funds was recorded as $6977000 for 2017 (Auditor's
remuneration, 2017).
An agreement was signed between the auditors, senior executives and
directors of AMP companies in order to decided the amount of remuneration
report, it is disclosed in the director's report for the year ended 31st
December 2017. the board analysed the payout and devise the improved
returns for shareholders. Earlier it is decided that the remuneration would be
decided on the basis of short term performance and analysis of portfolio. The
key strategy majorly associated with delivering the key strategies priorities.
Decreased return on equity increased up to 14.3% and the capital
position found in strong position. Final dividend was proposed as 14.5%, total
dividend was declared as 29 percent per share. Position of the organisation
mainly associated with determining the investment value for growth in
Australian business. Remuneration outcomes 2017 indicated towards a
strong recovery in underlying profit as $1040 million up form $486 million in
2016 with improved operating performance across the world wide.
Standardisation of insurance business is the core business activity that
generate additional returns and assist to pay remuneration. Before 2018
AGM it is expected that the positive aspect in terms of earning returns in
core Australian business (Hobbs, 2013). The remuneration outcomes
represent the group's improved financial performance and delivery against
strategic priorities. STI outcomes are considered as 90% targets reflects the
rigour and discipline applied to the approach undertaken for more
synchronised way.
Governance structure of the key operating subsidiary boards are
considered in 2017. Annual saving of $836500 subject to life board of
director's fees, executive changes are also commenced from 1st January
2018. Arrangement are done subject to the board strongly believes in using
equity.
Role, functions and composition of the Audit Committee
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Audit committee is one of the association part of the board
commission. Management and control is depends upon the audit committee.
It is formed to analyse the financial statements and the reviewing the
effectiveness of Amp's risk management framework. It approves the
appointment the director to internal auditor and the external auditors. Audit
committee analyse the fluctuations made in material disclosures, entry and
exit of auditors, arrangement of audit meeting with directors and the
external auditors for discussion upon financial performance of organisation.
Audit committee is the only authorised commission associated with
analysing the reasons for changes in audit plans and adapting new plans.
Role of the audit committee: main role of AMP's audit committee is
to make policies of accounting and financial management. Managing the
operations regarding the internal control Risk management, business policies
and practices., protection of an entity's assets. Compliance and regulations
regarding best practice guidelines (Lynch, 2014).
Functions: Monitoring functions, recognising function of reporting
principles and financial reporting standard and controlling the reporting
section is the main function of audit committee of company.
Composition of the audit committee: the audit committee of AMP
contains one person who retain the capability and capacity to understand
the financial statements and annual reports of organisation. Management
responsibilities and the members to correlate the functional operations and
compliance management with relevant rules and guidelines. Executive
officers, directors, accountants and board subsidiaries are the main members
considered in audit committee.
Independent Auditors report to the members (shareholders)
There is an analysis of income from life insurance policy liabilities are
defined as follows;
Why significant
Valuation of investment contract liabilities
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Life insurance contract liabilities total $23683 million and 17% of total
liabilities as representation. Valuation of the provisions subject to settlement
of future asseverations engaged in complex and subjective judgements
subject to future events and the internal and external to the organisation
and entire business. Key assumptions are considered which was involved in
the valuation of the policies and liabilities as discount rates, inflation and
indexation, forecast lapse rates, specifically for the wealth protection and
book of business, future maintenance and investment expenses, book of
business, taxation policies, surrender values and the mortality and morbidity.
Investment contract liabilities total $75235 million that represent the
53% of total liabilities. It contains a financial instrument and investment
management services for both the fair value and market value. Performance
and the value of the assets are supported to the assets and majority of
investors are associated with the value of third party and analysed as per fair
value of backing assets and not requires the exercise of judgement and the
valuation.
Valuation of complex and illiquid financial investments
It is significant subject to analyse the total of assets as $136675 million
and represents the 92% of total assets. The group exercise judgement to
assist the market transaction as per available market data are analysed with
the relevant market and modelling methodologies to adopt the changes and
variances. Fair value of assets and investments are considered in terms of
external party published subject to performance and analysis for better
evaluation and control (Armstrong, Brown and Smith, 2014). Key matters
contains the significance of overall financial statements.
How audit addressed the key audit matter
Valuation of investment contract liabilities
The audit committee mainly produces the following points as
 the group's controls over the recording of business, policy and
administration and claims processes.
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 It is assumed that the liabilities and the valuation process contain the
key reconciliation and the management for supporting the data and
using in the valuation for process.
 Evaluation of IT system subject to relate the policy valuation and the
variances.
 Objectivity and control for assess the reasonableness of the valuation
methodologies and key assumptions. Impact of the current
reinsurance transaction and the interpretation and transactions. The
interpretation mainly indicates the prudential standards that effect the
policy and the liability of valuation.
 Valuation model for AMP subject to analyse the historic business
activities and the management of determining the policies valuation
results.
 Adequate and complete of policies regarding liabilities of Australian
accounting standards are considered with proper analysis.
It is considered that the audit of investment contracts are analysed as
per following procedure as the assessed the group control over the recording
of new business and renewals and benefits process. It is evaluated that
pricing process is mainly associated with contract liabilities and the
management control. It is evaluated that how much the process is assigned
to contact the liability valuation (Yates and et. al., 2016). Total investments
are re-evaluated in terms of contract liability via system extraction of units
held per products and the prices as at December 2017.
Valuation of complex and illiquid financial investments
 Audit procedure contains the assessed group of controls the recording
of new business, renewals and the benefits of process.
 It is examined that the unit pricing process contains the design and
testing controls at the custodian.
 The process mainly associated with determining the controls and the
valuation of investment contract liabilities.
7

Review all Key Audit Matters noted and the associated audit
procedures
Professional judgements and the most significant models in audit of
the financial reports for the current years are considered in Key Audit
matters. Audit of financial reports and the forming opinion was concluded as
the matter provided in the total context. This is also a part of disclosure
responsibilities from auditors as the financial report and section financial
report section of report. The relation matters contain the performance of
procedure formed to respond the assessment of risk of material and
misstatements for the financial report (Pittock, Hussey and McGlennon,
2013). The procedure for the final disclosure and the analysis also
considered to assist the entire audit plan.
Evaluation of auditor’s assurance services performed for the client company
It is analysed that there is a proper guidelines and rules are followed
by audit committee subject to analyse the key stakeholders and the financial
statements of business (Caust, 2015). Auditors has successfully complied
with the independent disclosure requirement for organisation. They have
successfully analyse the value of remuneration and the fees of directors in
annual report. Non audit services and the nature of the services also
analysed in this context to elaborate the changes in various form (Oliver,
Vesty and Brooks, 2016). A remuneration disclosure is analysed subject to
availability of changes and the explanation to the remuneration and the
relation to the audit matters. Audit procedures were properly performed in
terms of providing assurance over each matter.
Disclosure requirement in terms of providing the independent opinion
was also properly followed by the auditors and perfectly summarised. The
Australian Accounting standards subject to evaluate the effectiveness of
financial reporting also considered in director's management responsibilities.
Third party interest and the consideration are considered in terms of meeting
the annual general meetings are considered in this context.
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CONCLUSION
The above report summarise the auditing standards and the annual
report of ASX listed organisation. Guidelines related to reporting
requirements and the commenced in December 2016 and the standards for
matters defines the auditing requirements. Revised auditing requirements
and the procedure of declaration statements form auditors and services
critically analysed for fair judgement.
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REFERENCES
Books and Journals:
Halligan, J., 2017. Reform design and performance in Australia and New
Zealand. In Transcending New Public Management (pp. 55-76).
Routledge.
Carnegie, G.D. and O’Connell, B.T., 2014. A longitudinal study of the
interplay of corporate collapse, accounting failure and governance
change in Australia: Early 1890s to early 2000s. Critical Perspectives
on Accounting. 25(6). pp.446-468.
Rammal, H. G. and Parker, L. D., 2013. Islamic banking in Pakistan: A history
of emergent accountability and regulation. Accounting History. 18(1).
pp.5-29.
Demediuk, T. and Armstrong, A., 2014, March. Context of Higher Education
and Its Implications for Quality Teaching: An Australian Perspective.
In Journal of the World Universities Forum (Vol. 6, No. 3).
Hobbs, L., 2013. Teaching ‘out-of-field’as a boundary-crossing event: Factors
shaping teacher identity. International journal of science and
mathematics education. 11(2). pp.271-297.
Lynch, T. J., 2014. A resource package training framework for producing
quality graduates to work in rural, regional and remote Australia: a
global perspective.
Pittock, J., Hussey, K. and McGlennon, S., 2013. Australian climate, energy
and water policies: conflicts and synergies. Australian Geographer.
44(1). pp.3-22.
Oliver, J., Vesty, G. and Brooks, A., 2016. Conceptualising integrated thinking
in practice. Managerial auditing journal. 31(2). pp.228-248.
Caust, J., 2015. Cultural wars in an Australian context: challenges in
developing a national cultural policy. International journal of cultural
policy. 21(2). pp.168-182.
Yates, L. and et. al., 2016. Knowledge at the Crossroads?: Physics and History
in the Changing World of Schools and Universities. Springer.
Armstrong, M., Brown, S. and Smith, H., 2014. Benchmarking and threshold
standards in higher education. Routledge.
Online
Auditor's remuneration, 2017. [online]. Available through:
<http://www.annualreports.com/HostedData/AnnualReports/PDF/OTC_
AMLTY_2017.pdf>.
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