Audit and Assurance Program on Macquarie Media Limited

The report discusses the audit and assurance program on Macquarie Media Limited, a listed company engaged in the operation of radio stations at the national level. The report covers the responsibilities of the audit committee, external auditors, and directors and management in relation to financial reporting. The report also includes information on key audit matters, changes in accounting policies, and material subsequent events. The auditors have given an opinion that the company has complied with applicable laws and regulation.

Audit and assurance
Assurance

EXECUTIVE SUMMARY
The current report deals with the certain disclosure requirements that are mandatory in
any kind of annual report published by a listed company. The sample company dealt in the
report is Macquarie Media Limited. The ultimate result observed is the follow up of all the
requirements by the board of the company. The auditors, Ernst & Young have also observed
all their responsibilities. No problems have been observed in the declarations provided,
remunerations paid and the opinion expressed.

Table of Contents
EXECUTIVE SUMMARY...................................................................................................................1
INTRODUCTION.................................................................................................................................2
ABOUT THE COMPANY AND AUDIT COMMITTEE.....................................................................3
COMPANY DETAILS......................................................................................................................3
AUDIT COMMITTEE......................................................................................................................3
STRUCTURE OF THE COMMITTEE.........................................................................................3
FUNCTION AND RESPONSIBILITIES OF AUDIT COMMITTEE..............................................3
ALL ABOUT EXTERNAL AUDITORS..............................................................................................4
WHO ARE THE EXTERNAL AUDITORS?...................................................................................4
HAVE THEY GIVEN DECLARATION FOR INDEPENDENCE?.................................................4
HAVE ANY NON AUDIT SERVICES BEING PROVIDED?........................................................4
WHAT ARE THE CHANGES IN REMUNERATION?...................................................................5
WHAT KIND OF AUDIT OPINION IS EXPRESSED BY THE AUDITORS?...............................5
ARE THERE ANY KEY AUDIT MATTERS MENTIONED?........................................................6
DIFFERENCE IN RESPONSIBILITIES IN REALTION TO FINANCIAL REPORTING.................8
RESPONSIBILITY OF DIRECTORS AND MANAGEMENT........................................................8
RESPONSIBILITY OF THE AUDITORS........................................................................................8
ARE THERE ANY MATERIAL SUBSEQUENT EVENTS?..............................................................9
CONCLUSION.....................................................................................................................................9
REFERENCES......................................................................................................................................9

INTRODUCTION
In this report, audit and assurance program on the Macquarie Media Limited has been
chosen for analysing the auditor’s responsibilities and other programs. Whenever any company
carries on the audit function, it has to follow up with a number of compliances. These
compliances relate both to the auditor and the directors. These are required to make the
operations of the entity as well as the audit function transparent. To evolve transparency, the
topics required to be covered include the declaration related to auditor independence, and the
matters highlighted by the auditor in his audit report. For developing a real time idea, a
company is chosen for the purpose of the report. The name of the company is Macquarie
Media Limited. It is considered that a well maintained audit committee along with audit
charter is present in the company’s governance model.
ABOUT THE COMPANY AND AUDIT COMMITTEE
COMPANY DETAILS
Macquarie Media Limited is engaged in the operation of radio stations at the national level. It
is a company listed on Australian stock exchange. The operation of the radio stations is in the
capital cities of Perth, Brisbane, Melbourne, Sydney and in some of the regions of
Queensland. The operation of this company had gained widespread success in Australia and
is considered trustworthy (Macquarie Media Limited., 2018).
AUDIT COMMITTEE
STRUCTURE OF THE COMMITTEE
The audit committee charter is laid by the management of the company. Audit committee is
constituted out of the members of the board and comprises of following members as on
current date (Goddard,. and Malagila, 2015). The Audit committee is set up to implement the
control check-up program in the audit and assurance program. It assists in keeping the
business more transparent towards the stakeholders. They work for the stakeholders so that
they could get right amount of information.

These above image reflects the all the key persons involved in the board of directors and
auditors committee. Looking at the above table it is clearly evident that all almost all the
members of the audit committee are non-executive directors of the company (Macquarie
Media Limited., 2018).
FUNCTION AND RESPONSIBILITIES OF AUDIT COMMITTEE
 Implementation of internal control within the system of organisation.
 Carrying the review of the financial reports prepared for the half year and on the annual basis
and making the recommendation for approval of the same to the board.
 Giving their constructive opinion regarding the appointment or removal of the external
auditors in form of recommendations.
 To ensure that the external auditors are complying with the independence requirements.
 Gathering records and invoices for the accounted information (Macquarie Media Limited.,
2018).
 Overlooking the process followed by the board to comply with laws, regulations and the rest
of the statutory and professional requirements (Pizzini, Lin, and Ziegenfuss, 2014).
 To maintain disclosed reporting practice so that it could improve the existing reporting
frameworks.
ALL ABOUT EXTERNAL AUDITORS
WHO ARE THE EXTERNAL AUDITORS?
The company has appointed Ernst & Young as their external auditors. Their report is
addressed to the shareholders of Macquarie Media Limited (Simione, and Sheikh, 2017).

HAVE THEY GIVEN DECLARATION FOR INDEPENDENCE?
It is a statutory requirement for all the external auditors to provide an exclusive declaration
for their independent functioning. Likewise, the auditors of Macquarie Media Limited have
also extended their independence declaration. The same is listed in the annual report also.
The independence declaration is given for the entity as well as all the consolidated entities
audited along with (Tepalagul, and Lin, 2015). The declaration is provided by the lead
auditor of Ernst & Young on behalf of the whole audit team and specifically states the
following (Böhm, Bollen, and Hassink, 2016).
 The whole audit team has done no contraventions in respect of the independence expected as
per the requirements of corporation act 2001.
 Further, the requirements relating to independence expected as per the applicable professional
code has also been complied with (Macquarie Media Limited., 2018).
HAVE ANY NON AUDIT SERVICES BEING PROVIDED?
As far as it gets evident from the declarations given by the auditors, the report presented by
the entity and the remuneration table provided for the auditors, it is certain that there are no
non-audit services being provisioned by the auditor. However, even if the auditors would
have provided any non-audit services, the entity has to explicitly mention the same under a
separate heading in the annual report (Wu, Hsu, and Haslam, 2016).
There are certain services that are clearly ineligible to be provisioned by the auditors to their
client. But in the case of given company, no additional services other than audit appraisal are
being provided by Ernst & Young. There are several auditors who are indulged in keeping the
business more transparent.
WHAT ARE THE CHANGES IN REMUNERATION?
2016 ($) 2017 ($) %
CHANGE
Amounts being paid to the auditor Ernst &
Young for the audit and review of the
financial reports of Macquarie Media
300,425 291,848 -2.85

Limited (Yahoo finance, 2018).
The table presented above is showing the remuneration that is paid to the auditors for the
assurance services extended by them to the entity. These services are being remunerated as
the assurance services. The table is showing that the remuneration paid to the auditors have
declined in the year 2017 as compared to year 2016. There is a percentage decline of around
2.85 %.
WHAT KIND OF AUDIT OPINION IS EXPRESSED BY THE AUDITORS?
The auditors have given an opinion that the company has complied with applicable laws and
regulation. In the opinion of the auditor on the basis of audit conducted by them there are no
contraventions done on the part of the company. The opinion is clean and unmodified. The
basis of the opinion is the checking done by the auditor on the consolidated financial
statements.
Further, the auditors need to assess the AIS standards and audit assurance program. They
have also complied with the independence requirements set out by the AASB stadnards (Su,
2015). These auditors take imperative decisions in the best interest of organization.
ARE THERE ANY KEY AUDIT MATTERS MENTIONED?
There are times when the auditor expresses an unmodified or clean opinion but raise certain
matters which they think are of high significance for the shareholders. These matters do not
mark any qualification but are carrying extreme value in the judgement of the auditor. These
matters have not been provided with a separate opinion though. The auditors perform audit
procedures on these key audit matters to remove any risk and doubt they earlier had placed on
the same. These matters are expressly stated in the audit report along with the audit procedure
performed on them (Segal, 2017). The following table provides an overview of the key audit
matters raised by the auditors, the audit procedures performed on the same and the
classification of that audit procedure. It is considered that overlooking the process followed
by the board to comply with laws, regulations and the rest of the statutory and professional
requirements is also found by using the key audit matter mentioned.

KEY AUDIT MATTER AUDIT PROCEDURE CLASSIFICATION OF
AUDIT PROCEDURE
1. Impairment of Intangible
Assets: the auditors had
doubt over the impairment
risk that may exist over the
goodwill and radio licenses
of the company worth $87.7
million and $108.1 million
respectively. The doubts
exist due to the challenges
persistent in the commercial
radio environment.
Checking whether the
method used by the board to
impair the assets meets the
requirements set by the
Rechecking the statements.
Assessment of the cash flow
forecasts, discount rate,
revenue growth rate, and the
terminal growth rate with the
help of valuation specialists.
The rechecking of the
sensitivity analysis that had
been performed by the entity
group.
Substantive test of details:
rechecking, re-computation
2. Changes in Accounting
policies: the company has
made a changes in its
reporting frameworks and
has started following the
guidance of IFRS framework
to recognise the Deferred
Tax Liabilities of the basis of
indefinite life intangible
Assets.
The change happened due to
these policy changes have
been accounted for by the
company on a retrospective
Assessment of whether the
requirements of AASB 118
Revenue, has been met by
the new revenue recognition
policy set for the
commissions.
Assessment of whether more
accurate and Errors has been
provided by the new revenue
recognition policy.
The calculations done by the
entity are rechecked to gather
accuracy regarding the
commission revenue for the
Substantive test of details:
rechecking, re-calculations,
observation
test of control

basis. current and prior periods.
The assessment made by the
group regarding the recovery
of estimated useful life of
intangible assets through use
and not sale is evaluated.
To lay accuracy, the
calculations made by the
group regarding the booked
assets.
The disclosures relating to
the changes in accounting
policies have been evaluated.
However, there are some
doubts which exist due to the
challenges persistent in the
complicate regulatory issue.
DIFFERENCE IN RESPONSIBILITIES IN REALTION TO FINANCIAL
REPORTING
RESPONSIBILITY OF DIRECTORS AND MANAGEMENT
The following are the responsibilities of the directors and management in relation to the
preparation of the financial reports (Macquarie Media Limited., 2018).
 Preparing the financial reports that accumulate in them the requirements set out by the
corporations act 2001 and the Australian Accounting Standards.
 Following the requirement of presenting the financial information that gives a true and fair
view (Macquarie Media Limited., 2018).
 Promoting and creating an environment that inhibits such internal control that leads to
preparation of true and fair financial reports.

 Assessment of the ability of the entity as a consolidated group to continue its operations and
business in the future as a going concern.
 Giving an opinion and assertion on the going concern ability of the entity, i.e. the entity does
not intend to cease or stop its operations in the near future (Armstrong, et. al 2015).
RESPONSIBILITY OF THE AUDITORS
The auditors are required to provide an assurance of accounts prepared and presented by
management of the entity. This assurance however is reasonable amounting to certain
inherent limitations of audit. The auditors are required to do the following in order to provide
a reasonable assurance:
 To identify and make an assessment of any sort of risk that may call for material
misstatements in the financial statements whether due to any fraud or error done due to the
mistake of entity (Macquarie Media Limited., 2018).
 Obtaining an understanding of the internal controls present in the entity to analyse his
position on identifying the material misstatements. There is no expression of opinion on the
internal controls.
ARE THERE ANY MATERIAL SUBSEQUENT EVENTS?
The only subsequent event recognised after the date of the financials for financial year 2017
is the sale of its sub unit Satellite on 31 July 2017. The sale is made for $5.9 million to
Stingray Digital International.
The same event is treated by the company by adding it as specific note in the notes to
financial statements. The treatment for the consideration is also mentioned in the note itself.
The treatment for the same is done in accordance with the accounting standards. Furthermore,
auditors have also complied with independence audit program as per the code of ethics and
Australian listing rules (Su, 2015).
CONCLUSION
The company’s presentation of the financial information is opined by the auditors to be true
and fair. As a layman’s vision, the same view is perceived. The entity has voluntarily made

disclosure of all required data. Further, there is no visible intention on part of the entity
wanting to have hidden any material information. All the requirements of the Corporations
Act 2001, Corporation Regulations 2001, and Australian Accounting Standards have been
followed. Auditors need to give their constructive opinion, appointment, or removal of the
external auditors in form of recommendations so that company could keep the business more
transparent and easily comply with the applicable laws and regulations. The auditors needs to
analysis whether the company is disclosing the proper details to stakeholders. They have to
take best efforts for the benefits of the stakeholders not organization.

REFERENCES
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financial reporting in corporate governance: A review of the evidence and the implications
for banking firms and the financial services industry, 20(2), pp.19-22.
Böhm, F., Bollen, L.H. and Hassink, H.F., (2016). Audit committee charter scope:
Determinants and effects on audit committee effort. International Journal of Auditing, 20(2),
pp.119-132.
Goddard, A. and Malagila, J., (2015). Public sector external auditing in Tanzania: a theory of
managing colonising tendencies. In The Public Sector Accounting, Accountability and
Auditing in Emerging Economies, 2nd Ed, USA: Emerald Group Publishing Limited.
Macquarie Media Limited., (2018) Available at
http://quicktake.morningstar.com/stocknet/secdocuments.aspx?
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Pizzini, M., Lin, S. and Ziegenfuss, D.E., (2014). The impact of internal audit function
quality and contribution on audit delay. Auditing: A Journal of Practice & Theory, 34(1),
pp.25-58.
Segal, M., (2017). ISA 701: Key Audit Matters-An exploration of the rationale and possible
unintended consequences in a South African. Journal of Economic and Financial
Sciences, 10(2), pp.376-391.
Simione, K.A. and Sheikh, A., (2017). REVIEW OF AMG's QUARTERLY FINANCAL
STATEMENTS: A SHORT CASE ABOUT AUDITOR RESPONSIBILITIES AND
REQUIREMENTS. Journal of the International Academy for Case Studies, 23(4), pp.1-13.
Su, L., (2015). Do the auditors bear the consequences of corporate failures? The case of
failed New Zealand finance companies (Doctoral dissertation, Auckland University of
Technology). 20(2), pp.119-132.
Tepalagul, N. and Lin, L., (2015). Auditor independence and audit quality: A literature
review. Journal of Accounting, Auditing & Finance, 30(1), pp.101-121.

Wu, C.Y.H., Hsu, H.H. and Haslam, J., (2016). Audit committees, non-audit services, and
auditor reporting decisions prior to failure. The British Accounting Review, 48(2), pp.240-
256.
Yahoo finance, (2018) Available at https://in.finance.yahoo.com/., Accessed on 17th
September 2018