Audit of Boral Limited: Inherent Risk and Previous Audits

Running head: AUDIT
Audit
Name of the student
Name of the university
Student ID
Author note

1AUDIT
NAME of your
Entity >>>
DISCUSSION
FACTOR According to ASA200.13(n)(i) inherent
risk (IR) is a measure of the
susceptibility of material misstatement
before considering any internal
controls.
LOW MODER
ATE HIGH
Nature of
client’s business
Building and construction materials. It
supplies and manufactures the building
and the construction materials in
Australia, Asia and United States. It
delivers blocks, asphalt, bricks, concrete,
retaining walls, quarry materials,
plasterboards, and stones. Apart from tat
it is engaged in landfill, transport and the
property activities. The company is
susceptible to inherent risk to some
extent as it operates its business
internationally and through various
offices (Boral.com 2019).

Results of
previous audits
As per the opinion of the company’s
auditor KPMG the financial statement of
2017 as well as 2018 both are prepared
in accordance with the Corporations Act
2001 and gives true and fair view of
company’s financial position as on 30th
June 2017 as well as 30th June 2018 and
the reports are complied with Australian
Standards and Corporation Regulations
2001. Hence for both the years the
auditors issued unqualified audit report
(Boral.com 2019).

Initial versus
repeat audits
From the annual report of the company
for the year 2016, 2017 and 2018 it is
identified that audit is conducted by the
same audit firm that is KPMG. Auditors
generally gains experience and
knowledge regarding the likelihood of
misstatement if they are auditing for
several years. Hence, the inherent risk is
lower at the subsequent years (Boral.com
2019).

Quantity of
non-routine
transactions
Transactions of non-routine nature are
more exposed to inherent risk due to
improper treatment as compared to the
routine transactions. Non-routine
transaction found from the income
statement of the company is profit from
