ACCT20075 Auditing Report: ASX Limited Financial Analysis

This report provides an in-depth analysis of the auditing process conducted on ASX Limited. It begins with an introduction to auditing, emphasizing the auditor's role in verifying financial reports and ensuring compliance with regulations. The report then delves into key concepts such as materiality and the scope of the audit, including how auditors assess and determine the significance of errors or omissions in financial statements. It also examines the disclosure requirements in company reports, the application of analytical procedures, and the use of financial ratios like current, debt, and debt-equity ratios to assess the company's financial health. A review of the company's cash flow statement and annual report, including the auditor's opinion and key audit matters, is also included. The report analyzes the financial performance of ASX Limited and the audit procedures applied. The report concludes with a summary of the key findings and the overall auditing process.

Running head: AUDITING
AUDITING
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction................................................................................................................................4
Materiality and Scope of Audit..................................................................................................4
Disclosure in Company Reports.................................................................................................5
Analytical Procedure in Company.............................................................................................6
Current Ratio..........................................................................................................................6
Debt Ratio..............................................................................................................................7
Debt-Equity Ratio..................................................................................................................8
Analysis of Company Cash Flow Statement..............................................................................8
Review of Company Annual Report..........................................................................................9
Key Audit Matters......................................................................................................................9
Conclusion................................................................................................................................10
Reference..................................................................................................................................11

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Introduction
Auditing is process which is carried by Auditor to know the financial report error and
omission so it can carry its procedure so that it can see how the company can carry its
business operation quickly and effectively in the business (Coppage & Shastri 2014). The
company should able to follow all the rules and regulation so that it can carry all its business
operation easily. Auditor has to know the company details so it can see how the company can
manage its business activities, which help it to ascertain the amount of risk which is involved
in company business. The report shows the company name ASX Limited, which based on the
investment. The report shows the materiality concept and how the Auditor can carry its
process to ascertain the materiality in the financial statement, it also shows about the
company financial ratio show this show how company can carry all its operation easily in
their business. It also shows the analysis of company cash flow statement so that it can know
the inflow and outflow of cash in the business (DeFond & Zhang 2014). It also shows the
analysis of the annual report and what is the opinion which is given by the Auditor on the
company financial statement.
Materiality and Scope of Audit
Auditor has to plan the scope of the audit so it can know how it will able to analysis
the company financial statement quickly and effectively in business. Materiality refers to the
error and omission, which is done by the company in regards to their annual report. The
company should carry all the information correctly in its financial statement so it can give
proper information to the commercial user (Eilifsen & Messier Jr 2014). Auditor has to know
the materiality which is involved in the company so that it can carry all the audit process and
able to give a proper opinion upon the company reports.

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Auditor has to take the concept of materiality with proper importance so that it can
know the business risk, which is associated with the company financial statement. It has to
plan to the materiality so it can all the audit process in the business so while calculating the
materiality it should consider the sales, total asset and equity (Elder et al., 2013). This will
help the Auditor to know how to carry its audit process so that it can able to gain more
amount of audit evidence which will help them to give a proper report to the company. The
Auditor is taking the total asset as the base for the calculation of total planning materiality.
The total planning materiality calculated as
Planning Materiality=Total Asset∗5 %
¿ $ 12923
¿ 5 %
¿ $ 646.5
The above calculation shows the planning materiality, so the Auditor has to ascertain
the procedure of audit and able to carry its activity easily on the company financial statement,
this will also affect the overall auditor report as if there a high amount of materiality so this
will increase the overall risk in the business.
Disclosure in Company Reports
Management can give the proper amount of disclosure in the company business so
that it can show all the detail information which the company should provide to the financial
user so that it can take the proper decision of investment in the company. The company
should able to provide all the required information as per the standard so that it can able to
present appropriate information in the company (Furnham & Gunter 2015). The Auditor
should check that the company is able to give all the required information in the disclosure as

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it should know the assumption which the company is to take in their business activities. It
should carry its audit process properly so that the Auditor can know all the required
information accurately in the annual report.
Auditor has to ascertain the information are true and accurate so that the user can take
proper decision in regards to company financial statement. It helps them to gain all the
information activities about the company business activities in the market.
Analytical Procedure in Company
It is the process which is carried by Auditor to know how the company can carry its
business operation, and it shows how the company is working in the business. It helps the
Auditor to understand many aspects of the company so can know the business risk in the
market (Goh, Krishnan & Li 2013). This help to know the amount of risk and able to give a
proper opinion in the company business, Auditor can have an adequate opinion on the
company financial statement.
Current Ratio
This ratio shows the company capacity in regards to the payment of current liability in
regards to a current asset. The company should have proper liquidity position, as this will
show that the company has a good financial status which will help them to gain more
investment by the financial user (Griffiths 2016). The company should have proper liquidity
position in the business as this show that the company can meet all the obligation of liability
in the industry.
Table No – 1

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Source - Author
Interpretation – The above ratio shows about the liquidity of company as it should be more
than, so it will show the company having the proper amount of cash in the company business,
as the company is having less than 2 so this signifies it is not able to maintain an appropriate
liquidity position in the company business activities. It can be seen that in 2017 it was 1.13
and in 2018 it is 1.14 so this show there is a slight increase in the current company ratio thus
this denotes that the company can increase their current ratio, so they will able to gain proper
investment in the company business. A company should able to change its strategies, which
will increase the liquidity position of the company.
Debt Ratio
This ratio shows how the company is able to finance their total asset in the business as
it should able to have proper composition of asset in the company business, it helps them to
know how the company has financed their total asset in the business this will help them to
know the financial position of company business (Jacoby and Levy 2016). It should able to
have a proper ratio as this will help them to gain more amount of business in the market.
Table No – 2
Source – Author
Interpretation – The above table show the debt ratio of the company as it should be proper
so that the investors will able to invest in the company business, as the above ratio is concern
it can see that there is a decrease in the ratio, so it shows that the company is able to have an
increase in the total asset or there is reduction in overall debt of the company. It shows that

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the company has a good financial position which helps them to carry the business activities
properly in the business.
Debt-Equity Ratio
This ratio shows the composition of debt and equity in the business as to how the
company can finance its business activity in the market (Knechel & Salterio 2016). A
company using more amount of debt may lead to affect the overall performance of the
company as well as it affects the profit of the company. High use of debt brings the problem
of increase in finance cost of the company and able to make the business insolvent, so it is
necessary for the company to maintain a proper amount of debt ratio in the business.
Table No – 3
Source – Author
Interpretation – Company has the same debt-equity ratio in the business which signifies that
the company is not able to have any kind of change in their business operation. It shows that
the company can meet its obligation easily, and that makes them have a nominal change in
the overall capital of the firm. The company should manage this ratio properly as all the
business activities directly depend on the finance of the company business.
Analysis of Company Cash Flow Statement
Cash flow statement is the statement which is prepared in regards of the cash
activities in the business, as to how the company can have inflow and outflow of cash in their
business activities (Louwers et al., 2015). Each company should prepare this statement as per
the regulation, as it helps the financial user to know the company cash inflow and outflow

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based on this can take all the related decision of the company business activities. The
company should show all the assumption which they have taken in their cash flow statement.
The analysis of cash flow statement shows that the company is having the highest amount of
cash inflow from cash from operating activities in the business and can have the highest
amount of outflow of cash from the cash from financing activities.
The highest amount of cash inflow is from Receipt from Customers, and the maximum
amount of outflow is from Dividend paid. The company is not having any non-cash item in
its financing and investing activities in the business.
Review of Company Annual Report
The Auditor of the company is PWC which is one the largest auditing firm in the
world, as per the auditor report of the company it can see that the Auditor had given an
Unqualified Report to the Auditor so this shows that the company is able to maintain all the
rules and regulation in the preparation of company annual report (Müller-Burmeister & Velte
2016). It states that the company can have a true and fair view in the business and able to
apply all the accounting standard in the business. The company can have all the professional
ethics while carrying business activities in the market.
Key Audit Matters
It is the matter which is given to company by the auditor in regards of company
financial report so that the user will able to know what is the problem which the Auditor has
to think risky in company financial report. The matter which Auditor find important it lists
those matter in the company annual report in key audit matters as the user can get proper
knowledge of company financial statement.

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Conclusion
The report concludes about the auditing process in the company as to how the Auditor
can carry its procedure to gain audit evidence in regards to company financial statement. It
also shows about the Auditor, as the Auditor has to ascertain the business risk and able to
carry its process to know about the company financial statement, the Auditor has to give a
proper opinion whether the company has a true and fair view or not. The report concludes the
auditing process in the company ASX Limited; it shows the materiality which is there in the
company financial statement as it is the error and omission which happen due to human error.
It shows the planning materiality which the Auditor has to ascertain in regards to the
company and how it able to carry its audit process in the company financial statement. It also
concludes on the company financial performance and the analysis of the same done with the
help of financial ratio of the company. Lastly, the report concludes about the analysis of
company cash flow statement and auditor report as the Auditor has given the company an
Unqualified report in the business.

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