Key Audit Matters in Independent Auditor's Report

Key Audit Matters 1
KEY AUDIT MATTERS IN INDEPENDENT AUDITOR’S REPORT
By Student’s Name
Course Code and Name
Professor’s Name
Institution Affiliation
Date

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Introduction
The Audit Report Standard, currently referred as the ASA 701 is concerning with critically
evaluating the key audit matters in an independent auditor’s reports. This standard is used by
financial entities to evaluate the key issues that arise especially when an auditor
communicates key matters during the evaluation of an entity’s financial statements. In that
regard, this paper presents and evaluates key audit matters, including the rationale of
introducing the key audit matters in an independent auditor’s report. The analyses are based
on the differentiation of financial position of an ASX-listed company, the Westpac Bank, in
the Banking industry, among others companies i.e. the AMP, ANZ, Bank of Queensland and
Australian National Bank
The auditor’s analysis of key audit matters in this report evaluates the intervening
financial statement of the Westpac Group. To effectively present the rationale of this
research, the new accounting standard in Australia (ASA 701) will be applied to represent
key audit matters. As such, the associated balanced sheet as ended on 30th June 2018. Among
the key audit matters to be considered is the evaluation of key issues from the Lehman
Brothers. This Audit Report is fundamental for the ASX-listed to forecast their financial
position and health in the future. This Lehman Brothers, dated on 15th Sep 2008, were listed
bankrupt will an approximated debt of about $600 billion in assets and liabilities of the same
amount. In this evaluation, key accounting issues the evaluation of relevant liabilities, and the
accuracy of the Australian banknote as stated in the financial policy page introduced by the
Australian Government.
The evaluation and balance of the Australian banknote delivered to financial institutions
indicates the assessment of fundamental banknotes concerning assets and liabilities calculated
to about $879,592 in assets and about $815,000 in gross liabilities (Qiao, Vo and Zhu, 2019).

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The estimations were drawn based on the consideration of the comparative Australian
banknote provided marginal banknotes were eliminated from the currency exchange rates.
Another key audit matters is the evaluation of foreign currencies, in consideration to the
investment of the Australian dollar. This key auditing concern is considered based on the
firm’s Accounting Policy and Financial Risks & Instruments notes. The consideration of
foreign currency and the dollar investments are considered to be key auditing concerns due to
its fundamental implication on Westpac’s position and value of its financial statements.
These fiscal data are an inclusive of issues apparent in auditing wide-range stock information
that necessitate the consideration of fiscal evaluation procedures.
Rationale of New Auditing Standard ASA 701
The ASA 701 presented the Auditing and Assurance Standard Board (AASB), which
analyses and communicates key auditing concerns in an independent auditor’s reports. This
standard deals with the pertinent necessities and issues of entity’s and legal requirements,
including the relevant strategic guidelines. The accounting board denotes the independent
statutory grouping under the Australian federation, under the accounting section 227A,
known as the Australian Security and Investments Commission Act of 2001. In that regard,
the governing body evaluates key auditing standards, in reference to the entities’ legal actions
as argued by Xu, Jiang, Fargher and Carson (2011). The new accounting standard, the ASA
701, illustrates the communication of key auditing matters in the Westpac’s audit report. In
addition to that, the report enables the relevant auditors in top ASX-listed firms to evaluate
and implement key decisions on how audit matters should be included in an auditor’s report.
The AMP’s profitability indicates a significant drop of its finances from 35% to 680M
in 2018. Considering the costs tabulated from the board of the royal commission, the AMP’s
portfolio account has presented a chance for the company being subjected to profitability. In
reference to the evaluation done by the company in 2018, the funds evaluated on 14th Feb

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deliver fundamental updates to the relevant stakeholders regarding the company’s earnings
and dividends dated on 31st December 2018. The ANZ is another financial institution
included in the analysis of firms’ key audit matters. According the taxation period ended 30th
Sep 2018, the company audit profitability approximated to about $6.4 billion, which related
to cash profitability of approximately $6 billion. The Bank of Queensland reported an overall
profit of about $336 ended in Dec, 2018. On the other hand, the Westpac reported a gross
annual profitability, which has edged about 1% considerably to about $8 B. The firm’s
preferred profit margin was relatively flat and at the same level compared to other banks. The
National Australia Bank has its financial income reading A$5.7 B for a financial year ended
on 30th Sep in reference to the book-keeping of about A$b.6B in profits over the fiscal year.
Independent Auditor’s Report
Basic Opinion
As for my personal opinion, the financial statements of the Westpac Bank and consolidated
entity for the evaluation of fiscal statements ended on 30th June 2018 comply with the
necessary auditing guidelines introduced by the AASB and significantly the ASA 701.
Additionally, the Westpac Bank maintains it accounting positions strategically pertinent to its
consolidated firms as recorded on 30th June 2018. During the same period, financial
performance of the company’s cash flow were evaluated and audited, including the
evaluation of balanced sheet, cash flow statements, operation incomes, overall interest rates,
among other fundamental accounting statements.
Basis for Opinion
The completed auditing report has been completed considering the new accounting standards
launched by the federal board of accounting in Australia with consideration to the AASB. In
reference to the legal frameworks, the auditor is tasked with an obligation to correctly
evaluate key accounting statements as outlined by the AASB concerning the responsibilities