Assume you are the senior auditor of a famous accounting firm assigned to audit the Qantas… 1 answer below »
Assume you are the senior auditor of a famous accounting firm assigned to audit the Qantas Airways Limited, a public listed company, for the year ended 30 June 2019. Based on the assumption of 2019 figures in Annual Report were not audited, you are required to do following activities: As a senior auditor, you have been assigned the task of gaining an understanding of the client, as well as identifying inherent risks and risk of material misstatements based on your research. The information you gather will be used to help plan the audit. You are required to write a report to your audit manager outlining the information you have gathered with regards to the following: a. Provide an overview of the client’s business, operation and industry (civil aviation industry). You need to consider any recent events concerning the company. (10 marks) b. Identify 5 areas of business risks for Qantas Airways Limited and give a brief explanation of the identified risks. Discuss how these risks can lead to risk of material misstatement. (you will need to mention specific transaction/ balance and assertions at risk and why you think these are risk areas). (20 marks) c. Carry out an analytical review of the financial statement of Qantas Airways Limited (based on the 2019 annual report) and identify a further 3 accounts balance/ amounts from Balance Sheet (Statement of Financial Position) or Income Statement (Statement of Financial Performance) might be at a risk of material misstatement. You are required to determine the materiality level (percentage of significance). Then, you are required to make appropriate judgement of appropriate balance/ amounts of these 3 accounts that you have identified above.areas of possible internal control risks. ( (These accountsreas should not be the same as those mentioned above in B and your need to mention specific transaction/ balance and audit assertions at risk and why you think these are risk areas) (12 marks) d. Review Qantas Airways Limited practice and give your opinions on whether you can rely on the internal control (corporate governance) environment. (8 marks)
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