Audit and Assurance of Janus Henderson Group: Materiality and Analytical Procedures

Janus Henderson Group
Auditing reporting and assurance
Auditing and assurance
Name of the Author
University Name-

Table of Contents
INTRODUCTION.................................................................................................................................2
Answer to section-1...............................................................................................................................2
Answer to section- 2..............................................................................................................................3
Answer to section- 3..............................................................................................................................7
REVIEW OF STATEMENT OF CASH FLOW...............................................................................7
REVIEW OF AUDIT REPORT........................................................................................................8
Conclusion.............................................................................................................................................8
REFERENCES......................................................................................................................................9
1

INTRODUCTION
With the ramified economic changes and complex business structure, the concept of
audit and assurances of the financial statement of company has been gaining momentum
throughout the time. Audit function helps to strengthen the trust that shareholders and other
users can lay over the financial statements of an entity. The main purpose of audit and
assurance is to strengthen the transparency and truthfulness of the financial statement of
company. The current report highlights the benefit of the concepts of materiality and
analytical procedures in any audit. The company used for the research purpose is Janus
Henderson Group. In the later sections of report the cash flow statement and the audit report
for financial year 2017 are also reviewed.
Answer to section-1
In simple words, materiality defines the quantity that can make a difference in the user’s
opinion. It is important to consider materiality because audit is able to provide only a
reasonable level of assurance. It means that all the errors or frauds could not be detected by
an audit due to the inherent limitations of the Janus Henderson Group. So the focus area is
brought in limelight by using the materiality levels (Chan, & Vasarhelyi, 2018). Materiality
represents that amount which is expected to create an influence on the users of the financial
statements. This happens when the misstatements and the omissions either individually or as
a sum total are reaching or exceeding this materiality amount. The ASA 320, Materiality in
Planning and Performing Audit puts emphasis on the auditor’s responsibility to determine
materiality for the financial statements. Materiality is decided right from the start of the audit
(Christensen, Eilifsen, Glover & Messier, 2018).
Choosing any materiality level is a matter of professional judgement. Further, for certain
account balances or the class of transactions, the auditor can choose a lower amount to be the
materiality level, if the risk level is expected to be high. This is known as performance
materiality. Different basis can be used for calculating a quantitative level of materiality.
They can be (Eilifsen, Hamilton, & Messier Jr,. 2017).
 1 % of revenue
 5 % of net income
 ½ to 1 % of net asset value
2