Planning is one of the most demanding and important aspects of an audit. A carefully planned audit increases auditor efficiency and provides greater assurance that the audit team addresses the critical issues. Auditors prepare audit planning documents that summarize client and industry background information and discuss accounting and auditing issues related to the client's financial statements.
The Ontario Securities Commission (OSC) rules require management of public companies to include background information about the business, including discussion and analysis by management about the most recent financial condition and results of operations (referred to as MD&A). While these disclosures are primarily intended for current and future investors, they also provide rich information for auditors, especially during the client acceptance and continuance phase of an audit. Additionally, similar disclosures by a client's competitors in their financial statements may also provide useful industry specific information that can be helpful during audit planning. SEDAR is the System for Electronic Document Analysis and Retrieval, the electronic filing system for the disclosure documents of public companies and investment funds across Canada. All Canadian public companies and investment funds are generally required to file their documents in the SEDAR system.
REQUIRED
1. Review the information contained in the "Overview" section. Describe the nature of information included in this section, and discuss how the information might be helpful to auditors in obtaining an understanding of the client's business and industry.
2. Locate the most recent MD&A for WestJet Airlines Ltd. (search for "WestJet"). Review the information contained in the document and describe how WestJet's disclosuresmight be informative to auditors of Air Canada.