Auditing and Assurance Report: JB HI-FI Financial Analysis (ACC302)

This report provides an in-depth analysis of the auditing and assurance processes applied to JB HI-FI, an Australian retail company. It examines the benefits of audited financial statements, the role of the auditor, and the analytical review of the company's financial data, including current assets, provisions in current liabilities, and plant and equipment. The report also explores JB HI-FI's corporate governance practices, focusing on its adherence to ASX regulations and the composition of the audit and risk committee, highlighting its benefits for both the company and the external auditor. The report concludes by summarizing the key findings related to the audit process and its impact on stakeholders, including financial users and society.

Running head: Auditing and Assurance
Auditing and Assurance
Name of the Student
Name of the University
Author Note

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Auditing and Assurance
Executive Summary
The report includes about the auditing process of the company. It shows how the company is
been benefits by getting its financial statement audited and also it helps them to get the
confident of the financial user to invest their money in the company. The report also include
about the company name JB HI-FI. It is an Australian company, which is an retail business
and deal in consumers good. The report shows about the analytical review of the company
and how the auditor carries its audit procedure in the company business. It also include the
corporate governance report of the company and how they perform their activity related to it.
It also show the audit committee of the company and how they help the company and the
auditor as a whole in regards with the company business.

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Auditing and Assurance
Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Overview of the Company.....................................................................................................3
Analytical Review of the Company.......................................................................................4
Corporate Governance in Company Annual Report..............................................................6
Audit Committee in Annual Report.......................................................................................6
Benefits of the Audit Committee...........................................................................................7
Conclusion..................................................................................................................................7
Reference....................................................................................................................................9
Appendix..................................................................................................................................11

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Auditing and Assurance
Introduction
The process of checking whether the financial statement are showing true and fair
view or not is termed as auditing (Alzeban and Gwilliam 2014). Auditing is been carried by
the external person termed as auditor and it is the one who check the financial books of the
company and say that the statement are been made in accordance of the accounting standard
or not (Arena and Jeppesen 2016). The auditor check all the accounting books of the
company so that it able to know that the company have maintained all the related entry and
double book-keeping is been maintained by the company. The audited balance sheet also
helps the financial and economic user so that the they can know about the company financial
position and performance and thus can make their decision accordingly. It let them know all
the details about the company and what are the concern which are there in the company and
how the auditor have address those area in the audit report (Armstrong et al.,2015). Auditor
carry many different types of process in the company as this help it to know and assesses the
risk of the business and also it able to judge whether the company have any fraud in the
business or not. It also check the materiality and going concern related to the company
financial books as it help it to give a better opinion about the financial reports of the
company.
Discussion
Overview of the Company
The report is been based upon the company JB HI-FI. It is an Australian company and
the product in which it deals is consumer goods. It is a retail business and carry its business in
the area of New Zealand and Australia. The company was founded in 1974 by John Barbuto.
Company have it headquarter in Melbourne, Australia.

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Auditing and Assurance
Analytical Review of the Company
Analytical Review Justifications Assertions and Ledger
Account Impacted
Audit Procedure/ Task
Total Current Asset As per the annual
report of the
company it can be
seen that the
company have only
increase of 4% in the
total current asset of
the company as it
have been increased
by a very minimum
amount
Assertion: Completeness
The auditor has to check that
the company have done all
the transaction related to the
current asset and no
omission of the transaction
have take place in the
company.
Assertion : Classification
It should see how the
company have done the
accounting in the asset and
no other account have been
inserted in the same.
It should verify the nature
of the transaction which is
posted in the current asset
Should check necessary
calculation regarding the
company current asset.
It will verify that only
ordinary course of
business transaction have
been transfer to the asset
Provision in current
liability
As per the balance
sheet of the company
it can be seen that the
provision have been
increase in the
current year as it has
been increase by 9%
so it show that the
Assertion : Valuation
It should check whether the
valuation of the provision is
been done as per the
industry norms or not.
Assertion : Confirmation
It will check the market so
that it will able to know
It should verify the sales
account to know the
amount of credit sale.
It should check previous
year provision and the
actual bad debt so it will
help it to analysis the
provision as per the

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Auditing and Assurance
company have
increase its bad debt
from the debtor.
whether the provision which
is made by the company is
reasonable or not and also
will check the reason behind
the increase of the amount
industry norms.
It should verify the
disclosure which the
company have given in
the notes on account in
regards with the provision.
Plant and Equipment As per the balance
sheet of the company
it can be see that
there is a decrease in
plant and equipment
of the company as it
had decrease by 5%
so it should be
consider as a item
which should be
checked by the
auditor
Assertion : Completeness
It should check whether all
the transaction having been
posted in the plant and
equipment account and the
company have not omitted
any of the transaction
Assertion : Valuation
It should check how the
company have valued the
same as it have charged
sufficient amount of
deprecation and no under or
over charged is been done
by the company
It should verify the
accounting entry related to
the plant and equipment.
It should also check the
amount of depreciation in
the account.
Should check the note of
the plant and equipment as
it will give more
information whether there
was any sale of the asset
or not.

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Auditing and Assurance
Corporate Governance in Company Annual Report
The company name JB HI-FI has been following all the rules and regulation given by
the ASX so they all have a proper report upon the Corporate Governance (Hay, Knechel and
Willekens 2014). After the analysis of the company corporate governance it can be seen that
the company is having many small policy sum together in its corporate governance report as
it contain many small report such as code of conduct report, audit and risk committee report
so it can be say that the company is able to fulfil all its duty in regards of the corporate
governance and able to give a better presentation in the annual report of the company (JB HI-
FI INVESTORS 2019).
The annual report of the company has it in the head of Corporate Governance
Statement so the stuff related to the corporate governance can be found under the head
Corporate Governance Statement (Knechel and Salterio 2016). So the financial user can able
to find out the details related to the corporate governance which is been done by the
company.
Audit Committee in Annual Report
The annual report of the company shows that the company had an audit and risk
committee (McCahery, Sautner and Starks 2016). As per the details of the committee it can
be seen that it performs many activities in the company as it do the appointment and the
dismissal of the external auditor. It also does many test in the company as it do a continue
analysis of the company internal management as it keep a record about the company so that
it can guide the company in the error which are there in the system and thus the company will
able to rectify the same in the internal management of the company (Member.afraccess.com
2019).

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Auditing and Assurance
It can be seen that the company had an audit and risk committee but about the
composition of the members it is not been mentioned in the annual report so due to this it
cannot be said whether the company have the proper composition of the audit committee as
per the regulation of the ASX.
Benefits of the Audit Committee
The committee of the audit is very important for the company as it do the internal
audit of the company and check the internal management system and guide the company
about how they can able to make changes and can make a better internal management process
(Tricker and Tricker 2015). It also help the external auditor as it guide them about the risk
which are there in the business and also provide them the related document which are there in
the audit process carried by the audit committee so it can help the auditor to carry more
detailed audit process in the company. It also benefits the society as it able to give them the
proper business structure of the company and also help them by give a confident in the
company financial position as it show them that there is no problem in the company
performance and carrying process of the business.
Conclusion
The report is been complete by the above discussion as that it show how the auditing
process is been carried by the company and how it help the economic user to take the
decision in regards of the company balance sheet. It also consists of the company name JB
HI-FI and show the different process which is carried by the auditor in related to the
company. It consists of the analytical review of the company and also shows how the
company manages the corporate governance in the financial business of the company. It also
show the audit committee of the company and how it is been a benefit to the auditor as well
as the company.

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Auditing and Assurance
Reference
Alzeban, A. and Gwilliam, D., 2014. Factors affecting the internal audit effectiveness: A
survey of the Saudi public sector. Journal of International Accounting, Auditing and
Taxation, 23(2), pp.74-86.
Arena, M. and Jeppesen, K.K., 2016. Practice variation in public sector internal auditing: An
institutional analysis. European Accounting Review, 25(2), pp.319-345.
Armstrong, C.S., Blouin, J.L., Jagolinzer, A.D. and Larcker, D.F., 2015. Corporate
governance, incentives, and tax avoidance. Journal of Accounting and Economics, 60(1),
pp.1-17.
Coetzee, P. and Lubbe, D., 2014. Improving the efficiency and effectiveness of risk‐based
internal audit engagements. International Journal of Auditing, 18(2), pp.115-125.
DeFond, M. and Zhang, J., 2014. A review of archival auditing research. Journal of
Accounting and Economics, 58(2-3), pp.275-326.
Griffiths, P., 2016. Risk-based auditing. Routledge.
Hay, D., Knechel, W.R. and Willekens, M. eds., 2014. The Routledge companion to auditing.
Routledge.
JB HI-FI INVESTORS (2019). Corporate Governance | JB Hi-Fi Solutions. [online] JB HI-
FI INVESTORS. Available at: https://investors.jbhifi.com.au/corporate-governance/
[Accessed 18 May 2019].
Knechel, W.R. and Salterio, S.E., 2016. Auditing: Assurance and risk. Routledge.

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McCahery, J.A., Sautner, Z. and Starks, L.T., 2016. Behind the scenes: The corporate
governance preferences of institutional investors. The Journal of Finance, 71(6), pp.2905-
2932.
Member.afraccess.com (2019). [online] Member.afraccess.com. Available at:
http://member.afraccess.com/media?id=CMN://3A498121&filename=20180813/
JBH_02008547.pdf [Accessed 18 May 2019].
Tricker, R.B. and Tricker, R.I., 2015. Corporate governance: Principles, policies, and
practices. Oxford University Press, USA.

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Appendix