ACC 302: Auditing & Assurance- Qantas Ltd - Inherent risks - Case Study

Auditing & Assurance Assignment

Assume that your audit team is responsible for planning the audits for Qantas Ltd for the year ended 30 June 2015. Discuss your strategies in relation to the questions noted below

Assignment Task

Identify at least three (3) inherent risks that you would have considered for the company in the audit planning phase and justify your answer. What audit procedures and/or tasks would you have planned to carry out in response to the inherent risks identified by you in (A) above? See the required format for your answers below An Independent Auditor’s Report to the Members has been issued for the company: Identify the type of audit opinion issued by the auditor, and justify your answer. Do you agree with the type of opinion issued by the auditor? Why or why not? Please indicate an alternative audit opinion if you do not agree with the one issued. Does the audit report conform to the different criteria according to the auditing standard? Are there any other matters or events that have taken place after the issue of the audit report that strengthens or weakens the auditor’s opinion? In relation to corporate governance research and justify your answer to the following questions- Does the above company have any process relating to corporate governance? Under which section of the annual report would you expect to find information on it? Does the company have an audit committee and does the audit committee have the correct composition? In your team’s opinion, are audit committees of benefit to the auditor, the company, the auditing profession and/or society as a whole? Why or why not?  

In the given case, the auditor has issued an unmodified opinion report. This report states that the financial statements are representing true and fair view of the state of affairs of the company and the financial statements have been prepared in accordance with the prescribed provisions and principle. The auditor has issued this opinion in respect of the financial statements because sufficient appropriate audit evidence was available for the auditor in order to base his opinion. The preparation of the financial statements is the responsibility of the management while expressing an opinion on the financial statements is the responsibility of the auditor. Therefore, the auditor gathers sufficient appropriate audit evidence to form his opinion. If sufficient appropriate audit evidence is gathered by the auditor and the financial statements are in conformity with those evidences then the auditor can issue an unmodified opinion report and the opinion of the auditor is justified. The audit report conforms to the auditing standards that have been prescribed. This can be assessed by the following:-

• A comprehensive list of all the financial statements that have been audited has been mentioned in the Auditor’s Report that has been issued by the auditor.
• The type of opinion that has been expressed by the auditor with respect to the financial statements of the company has been clearly mentioned. The report also states the reason for issuing such opinion i.e. unmodified opinion report has been issued by the auditors because the sufficient appropriate audit evidence has been obtained by them which are in conformity with the financial statements that have been issued.
• The report does not only incorporate the important elements that are required to be incorporated in the report rather the sections with respect to which that elements are important has also been mentioned in the report. The various sections under which certain elements are considered important have been highlighted in the report by the auditor.

The auditors are not responsible to form an opinion on the events that have occurred after the issue of the audit report by the auditors. However, if any important event takes place during the course of audit it is the responsibility of the auditors to bring it to the notice of the stakeholders. In the given case, no significant events have occurred after the issue of the audit report that has any effect on the audit opinion of the auditor in the auditor’s report.