Audit & Assurance: Comparative Analysis of Qantas & Fortescue

This report provides a comparative analysis of the audit reports of Qantas and Fortescue, two Australian ASX-listed companies operating in different industries. It examines the nature and core business of each company, compares their financial statements, and discusses the impact of control tests on substantive testing. The report also identifies the auditors for each company and details the responsibilities of both the auditors and the management. Key aspects covered include the financial performance of each company relative to its industry, the presentation of financial statements, and the auditor's role in ensuring the accuracy and reliability of financial reporting. The report highlights the importance of auditors in maintaining transparent business practices and serving the best interests of stakeholders.

Qantas and Fortes Cue
Audit and Assurance
University Name-
Name of the Author
University Name-

Table of Contents
Introduction.................................................................................................................................................2
Answer to question no-1.............................................................................................................................2
Answer to question no-2.............................................................................................................................2
Answer to question no-3.............................................................................................................................3
Answer to question no-4.............................................................................................................................3
Conclusion...................................................................................................................................................4
References...................................................................................................................................................5

Introduction
With ramified changes, auditors are playing the key role in the business success and
transparent business functioning of organization. In this report, annual report of two companies
named Qantas and Fortes cue have been taken into consideration. The auditor’s responsibilities
and auditing and assurance services have also been analyzed.
Answer to question no-1
Qantas is the company that deals in airlines; it is third oldest airlines in the world. The
company was found in November 1920, and it begins its international passenger flight in May
1935. Qantas is in alliance with one world airline. The headquarters of Qantas is located at the
Qantas centre in the bayside council suburb of mascot, Sydney, New South Wales. According to
the resend report there are 26,150 employees working in the company. This shows that the
company is dealing at a very big level (Clark, et al. 2017).
Fortes cue is the global leader in the iron ore industry in the world. The company was in
2003. The company have discovered and developed so many mines in the world that makes them
one of the core global iron producer in the world. The main vision of the company is to become
the safest, lowest cost in relation to the production and research, and the most profitable in the
ore industry. The company is also supplying 17% of the seaborne in the country of china, and is
expanding it into Japan, South Korea and India (Tepalagul, and Lin, 2015).
Answer to question no-2
In the Qantas, the financial statement of the company shows the increment in its revenue in
2017. The operating income of the company is been decrease by 12% since last one year. The
company has raised total assets by 13% and total equity of the company by 16% since last one
year (Yee, Sujan, James,. and Leung, 2017). By understanding the financial statement of the
company we can see that the company has maintained employee oriented organizational culture.
And see their interest as their own interest so they have invested a lot in the funds scheme of

their employee. In the airlines industry, QANTAS financial statement has strengthen goodwill as
its revenue is increasing very year with the good rate (Vangelisti, 2016).
The financial statement of the Fortes cue shows that the company is on the progress the income,
revenue, net profit and the net income of the company is increasing year by year. The company
vision is very much on the peak to be achieved as they are working very well in their field. The
investment of the company is also increasing every year. In the ore industry the fortes cue is
doing very well and there are chances that they become one of the top ore company in the ore
and mining industry (Qantas Company, 2018).
Answer to question no-3
The substantive test are those that are performed by the auditor to find out if there are
any material misstatement in the financial statement or not and if there are then they can perform
the test to find the keen area where there are chances of material statement. There are basically
two type of substantive test that are analytical procedures and the other one is test of details in
case of Qantas. But the analytical procedures provide fewer details as compare to the test of
details, so if the auditors find out that there are some of the areas where are more chances of
material misstatement than instead of analytical procedure in Qantas (Barr-Pulliam, Brown-
Liburd,. and Sanderson, 2017). The auditor prefers to do test of details as it will provide more
details to the notes to account of company. The Fortes cue uses the test of control so that the
chances of fraud may decrease, for this internal control of the company. It would also make the
transparency of company strong and lower down the inherent and detention risk in Fortes cue by
appointing more internal auditor. When the test of control or the internal control of the Fortes
cue is strengthen by undertaking the audit substantive test than the work of auditor is been
decrease as they have to use less substantive test for testing the fraud in the company (Fortes cue,
2018).
Answer to question no-4
The auditor is the person who is authorized to review the financial statement of the
company and give their opinion whether they are free from material misstatement. He auditor

can only give their opinion and the guarantee as they are also bound by some of the limitations
( Kowaleski, Mayhew,. and Tegeler, 2018).
Responsibility of the auditors
The responsibility of the auditors is to plan the audit of the company and to obtain the
reasonable assurance that whether the financial statement that are provided by the company are
free from material misstatement that are caused by fraud and error in the company. The auditor is
also responsible for giving their opinion on the financial statement that is presented by the
company (Chan, Chiu, and Vasarhelyi, 2018). They also have to follow the entire audit standard
that is set up by the audit council.
Responsibility of the management
The responsibility of the management is too corporate with the auditor while the audit is
going on. They have to provide the information that the auditors need about the financial
statement. Sometimes the management is also responsible for answering the auditor if there are
some of the questions that are put on by auditor on them. They are also responsible to work
under the law, and make decision according to the convenience of the entire departments
(Beardsley, Lassila, and Omer, 2017).
Conclusion
The substantive test are used in this report and auditors responsibility are undertaken to
perform the audit functions to find out if there are any material misstatement in the financial
statement or not. The crux of this work is that auditors are in the fiduciary position towards the
stakeholders and they work in the best interest of the stakeholders.

References
Barr-Pulliam, D., Brown-Liburd, H.L. and Sanderson, K.A., 2017. The Effects of the Internal
Control Opinion and Use of Audit Data Analytics on Perceptions of Audit Quality, Assurance,
and Auditor Negligence. . 2(3) pp. 71-83.
Beardsley, E., Lassila, D. and Omer, T., 2017. How Do Audit Offices Respond to Audit Fee
Pressure? Evidence of Increased Focus on Nonaudit Services and Their Impact on Audit Quality.
. 2(3) pp. 271-283.
Chan, D.Y., Chiu, V. and Vasarhelyi, M.A. eds., 2018. Continuous Auditing: Theory and
Application.3rd ed Australia: Emerald Publishing Limited.
Clark, C.H., Hurkmans, C.W., Kry, S.F., of Radiation, T.G.Q.A. and Group, T.C.T.H., 2017. The
role of dosimetry audit in lung SBRT multi-centre clinical trials. Physica Medica, 44,(2) pp.171-
176.
Fortescue 2018, retrieved, Available at http://www.fmgl.com.au/docs/default-source/annual-
reporting-suite/fy18-annual-report.pdf, , . Accessed on 4th October 2018
Kowaleski, Z.T., Mayhew, B.W. and Tegeler, A.C., 2018. The Impact of Consulting Services on
Audit Quality: An Experimental Approach. Journal of Accounting Research, 56(2), pp.673-711.
Qantas Company, 2018, Annual report, Available at http://investor.qantas.com/investors/?
page=annual-reports, . Accessed on 4th October 2018
Tepalagul, N. and Lin, L., (2015). Auditor independence and audit quality: A literature
review. Journal of Accounting, Auditing & Finance, 30(1), pp.101-121.
Vangelisti, A.L., (2016). On the importance of communication research. Communication
Education, 65(4), pp.501-504.

Yee, C.S., Sujan, A., James, K. and Leung, J.K., 2017. Perceptions of Singaporean internal audit
customers regarding the role and effectiveness of internal audit. Asian Journal of Business and
Accounting, 1(2), pp.147-174.