Analysis of David Jones Ltd's Audit Report and Financial Statements

This assignment analyzes the audit report of David Jones Limited, focusing on the key aspects of the auditor's opinion and the financial statements. The report identifies the audit firm, Ernest & Young Inc., and summarizes the auditors' statements regarding the financial information, including the fair representation of material aspects, compliance with IFRS and the Companies Act of South Africa. It also highlights the auditors' statements concerning the valuation processes, the impairment of assets, and the auditors' independence, including the audit committee's compliance with internal policies. The report also covers the assessment of the recoverable amount of goodwill, the impact of structural changes and the cyclical downturn affecting the retail sector, and the importance of the auditors' independence. The assignment provides a detailed overview of the audit process and the key takeaways from the audit report, which is vital in understanding the financial health and performance of the company.

Introduction to Financial Accounting

David Jones Ltd Audit Firm
THE AUDIT FIRM FOR DAVID JONES LTD IS ERNEST
AND YOUNG INC.

Auditors statement in relation to the accounting
information in the company’s report
 The auditors stated that the consolidated and separate financial statement provides a
fair representation of all the material aspects.
 The consolidated financial statements and the separate financial performance along
with consolidated and separate cash flow statement for the year ended is in compliance
with the IFRS framework and meets the requirements of the Companies Act of South
Africa.
 The auditors stated that the process of valuation is difficult and requires judgement
relating to the certain assumptions while concluding regarding the inputs of
computations. The inputs usually comprise of ascertaining appropriate discounts, gross
margins, rate of growth and quantification of collaborations.

Auditors statement in relation to the
accounting information in the company’s
report
– The auditors also stated that the group is obligatory required to evaluate the
recoverable amount of the goodwill for the yearly basis in accordance with the
IAS 36, impairment of assets.
– The re-assessment of carrying value of David Jones Goodwill lead to the
recognition of impairment charge that amounted to R6,958 portraying the
structural changes and cyclical downturn impacting the performance across the
retail sector of Australia.

AUDITORS STATEMENT IN RELATION
TO THEIR INDEPENDENCE
• The representation that is made by the Ernest & Young to the audit committee is in line with their
internal independence policy.
• The auditors do not, except as the external auditors or in rendering the permission for the non-
audit services, received any remuneration or other forms of the benefit received from the group.
• The independence of the auditors was not impaired by any form of consultancy, advisory or other
work that is undertaken by the auditors, and
• The criteria that is specified for the independence by the independent regulatory board for
Auditors, the South African Institute of Chartered Accountants and International Regulatory
Bodies.

THANK YOU