Topic: How is Enhanced Auditor Reporting currently being embraced in Australia?

Background and Context:

Since 2016, there has been a strong push to improve the quality of audit reporting. Listed entities now have to report on key audit matters and improve the way material information is communicated using plain English. As mentioned in the CPA Australia podcast How is

Enhanced Auditor Reporting being Embraced around the Globe? (available at CPA Australia website):

The IAASBs new auditor reporting requirements commenced in December 2016. Standard setters in many jurisdictions, including Australia and New Zealand, have issued the new requirements with the same effective date, whilst others have committed to issue the standards but have not yet done so. The UK have had similar requirements in place since 2013 and some firms in other countries have early adopted the IAASBs requirements. Jim Sylph, Co-chairman of the IAASBs Auditor Reporting Implementation Working Group, and Merran Kelsall, IAASB member and AUASB Chairman spoke to CPA Australia about the uptake and impact of enhanced auditor reporting around the globe.

Research Assessment:

Refer to the attached BHP annual report for 2023. Review all the sections within the selected companys annual report which relate to the Auditors role in providing reasonable assurance over the entitys financial statements and control environment. Students will need to review and analyse the following key areas included in the selected companys annual report:

Auditors Independence Declaration

Independent Auditors report

Non-audit services performed by the auditor

Auditors remuneration

Role, functions and composition of the Audit Committee

Independent Auditors report to the members (shareholders)

Review all Key Audit Matters noted and the associated audit procedures

MPAA604 Individual Assignment T2, 2023 2

Requirements:

Based on your analysis of the auditors sections and other areas pertaining to the auditor, as included within the annual report, submit a report which summarises and evaluates the auditors assurance services performed for the client company.

As part of your review of the assurance services provided, consider the following:

Has the auditor complied with Independence requirements?

If there were non-audit services provided, what was the nature of such services?

Provide an analysis of the auditors remuneration in a table with prior year

comparisons. Include percentage changes and explanations of the remuneration.

In relation to the Key Audit Matters (KAM), which audit procedures were performed to provide assurance over each matter? Summarise and paraphrase each key audit matter. Correctly classify each audit procedure listed as: tests of controls, substantive

tests of detail, substantive test of balances or analytical procedures.

Is there an Audit Committee? Are there any non-executive directors on the audit committee? Is there an Audit Committee Charter? If so, summarise the main points of the charter including: the structure, function and responsibilities of the Audit

Committee.

What type of Audit Opinion was expressed?

How do the Directors duties and Managements responsibilities differ from the

Auditors responsibilities in relation to the financial report?

Were there any material subsequent events? If so, briefly outline them and paraphrase

and summarise how they were treated.

As an interested third-party stakeholder, make an assessment of the effectiveness of

the material information reported by the auditor in your conclusion.

Consider whether there is any material information which could be missing, under- reported and/or not fully explained or disclosed in an effective way for the intended

users?

What follow-up questions would you ask the auditor at the companys annual general

meeting (AGM)?