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ACC6030

 

ACC6030 – Auditing & Assurance Services

Table of Contents

Executive summary. 3

Problem statement 3

Methodology. 6

Findings. 6

Key audit matters (KAMs). 7

Reducing the expenses of the company. 7

Identify the risk of materials misstatement 7

Standardizing the auditing in the company. 8

Auditors independence. 9

Risk of material misstatement (RMM). 10

Business strategies. 10

Business risk. 10

Implement the findings. 11

Conclusion. 11

 

 

 

Executive summary

DEXUS LTD (DXS) organization is one of the leading real estate groups, that is managing the highest level of a property portfolio in Australia at $32.0 billion. The chief audit officer of the Australian stock exchange (ASX) appointed me as the investigator officer to find out the truth and the fair report from the company’s financial data and as they examine the true and the fair statement status of the audited financial statements. This is the organization that is listed in the top 50 entities by the market capitalization that is listed on the Australian securities exchange (Abernathy, et al., 2017). The Australian auditing standards and the case laws are going to be applicable in the organization to reduce these issues in the company. DEXUS LTD (DXS) is a company that is supporting 29,000 investors from 21 countries and with the help of the financial data, changes will be made in the company to reduce the chances of risk and issues (Abernathy, et al., 2017). These findings help them to implement new policies and laws in the organization. this will help the company to reduce its audit risk and these audit standards help DEXUS LTD (DXS) to apply and develop innovative laws in the organization for the better development of the company. As the investigating officer, I have to examine the financial statement of the DEXUS LTD (DXS) organization for the previous year.

Problem statement

 

On the financial year performance of DEXUS LTD (DXS) the annual leave entitlement section that is mentioned in the above annual reports explains the FY of 2019 and 2020 the amount of the annual leave entitlement in the annual statement is -$18,265 and -$14,034 as this is not good for the company for the short term profit and benefits level (Alzeban, 2015). According to the total section of the security-based benefits and the total section amount of FY20 and FY19 is respectively $10,681,241 and 14,460,032. The organization has to increase its investors’ numbers and for this, they have to focus on the company sales and increase the net sales amount of the organization (Alzeban, 2015).

 

 

Based on the financial year performance status of the DEXUS LTD (DXS) organization from the year 2016-2020 there are a huge amount of changes in the fund amount according to the financial year performance the company funds amount for the year 2020 is $730.2 and therefore the funds amount of the year 2019 is $681.5. According to the year data of both the year, there are changes of the 10 % in the both they year funds amount of the company. but based on these data the company have to develop better audit standard to increase the funds and the net sales amount of the company by 40% to get a better result. There has been a large number of changes in the expenses of the company from the year 2020 annual balance sheet and the financial year performance.

 

There is the TSR since listing in 2004 relative graph and the low level of the changes in the company from the quarter 31st of march 2009 this shown that property accumulation index and the S & P / ASX 200 has the drop-down in the year of 2009 in the month of the march of DEXUS LTD (DXS) organization and they have to increase the company investors to maintain the balance and increase the graph of the investment of the company of the quarter year 2020 (Amalia, et al., 2019). These are the problems and the issue that are raised in the organization and they have to resolve these issues and the risk to the organization to improve the working policy of the company and they have to focus on the audit department of the organization. various types of issues and risks appear on DEXUS LTD (DXS) and as the investigator officer, this is my duty to reduce the risk and suggest the audit standards to resolve these issues in the organization (Amalia, et al., 2019).

Based on the annual report and the data of all the years the organization has been very clear that the company has to improve its working policy and they have to apply some specific kind of audit standards in the company to reduce the amount of expense in the company. according to the three years data of the company expenses the company pays the highest amount of expenses in the year 2021 compared to 2019. Therefore the company’s funds and net sales are increasing then they have to also, focus on the expenses of the organization. they have to reduce the amount of the company expense and they have to standard audit method.

Methodology

The methodology will we apply in this organization to handle the working issue and the other risk identification. They have to make sure to handle the issue related to the risk appearance in the organization.

Findings

DEXUS LTD (DXS) has to apply the ASA 705 audit standard and it is the standard that use in the organization to do modifications to the opinion in the independent auditors’ report based on this they have to apply this auditing standard to the organization’s investment and finance policy and changes will be applicable in the organization this is also, help the company to do better and the improve the investment amount of the DEXUS LTD (DXS) from the year 2020 to 20% more compared to this year in the year 2021. The usage of this auditing standard in the organization is to modify the audit report and do the change on an independent basis for the better and the assurance standard of the organization (Bédard, et al., 2016).  Based on the findings in the organization and their changes in the risk. They have to make sure to implement a better working policy.

As this chart describes the changes in the 1st vesting date are 50% and the 2nd vesting date 50% based on the fixed remuneration of the company. There are changes in the funds and the net sales and therefore the changes in the expenses too as they have to increase the company funds for the year 2022 by 40% compare to last year’s fund’s sale of the company from the year 2021. Also, the company’s fair value per performance is increasing by a good percentage but they have to focus on the company on the company expenses too as the company expenses are also increasing (Bédard, et al., 2016).

Key audit matters (KAMs)

Reducing the expenses of the company

ASA 705 modifications to the opinion This standard is perfectly suited to this situation in the organization because they have to focus on reducing the expenses of the company in the year 2020 based on the financial year performance of the company the graph that shows the changes and increment in the investment department of the company (BOTEZ, 2015). The importance of the audit standard in the organization is used and applicable only in the company that is situated and developed in America. This audit standard is applicable and applied in the organization by modifying the working policy this will help the company to get better and more innovative results by the year-end of 2021. This is the reason they have to apply this auditing standard in the organization and improve the working policy and the better result they will get in the organization (BOTEZ, 2015).

Another auditing standard that is useful and applicable in the organization to improve and do the changes in the company working policy areas the company has to increase their organization investment as there is a drop in the investment of this company and they have to focus on this department and they have to focus on the investment of these companies and the organization. this is the issue and the second case this appears in the organization and they have to apply the auditing standards of the company to improve the working policy of the company (Smith, 2021).

Identify the risk of materials misstatement

ASA 315 identifies and assesses the risks of materials misstatement through understanding the entity and its environment

As there is the risk appearance in the organization on the fund’s department of the company they have to increase the company investors rate and the investment amount of the pilgrim pride company as they have the huge amount and the large level of drop-down in the quarter 2020 in the second quarter. They have to increase the sales and the investment level of this agriculture organization. also, there is a continuous level of drop-down in archer daniels midland as the graph explains the drop and the low level of the company investment (Smith, 2021). As this is a serious issue for the DEXUS LTD (DXS) organization and they have to improve the investor’s companies’ valuation in the market and increase the investment level of both the companies as they are having not much increment and sales graph of the companies are not that much high.

Therefore the investor’s company’s investment is on the level of the good investment level and it is the outperformed seated on all the quarters of the company from the year 2013 to the year 2020 quarter 2 they all have a high level of the graph production.

This is the risk appearance in the organization as they have to increase the investment of all the other parts of the companies is compulsory in the organization and they have to follow the auditing standard to improve the working environment and the working policy for the better result. Also, they have to apply the rules and the regulations that are mentioned in the audit ASA 315 standard to get better and more innovative results for the organization (Smith, 2021).

Standardizing the auditing in the company

ASA 315 Audit standard

This audit standard is the IT application and this program is set by applying these methods in the organization policy and based on the company’s financial year performance also, resources. The first program which they use is the initiation of the sources to improve the working policy (Lee, et al., 2017). after this process, they have to start the process to find out the solution behind the low amount of sales investment of these investors companies to improve and increase their sales investment in the market. But there is the risk appearance in the organization is the misstatement as based on the financial year performance and the report that is provided by the DEXUS LTD (DXS) organization is shown that the company has to focus and improve the working policy and they have done some changes in the management of the company balance, amount, and the other details that are needed to be applicable in the organization policy. the risk appearance in the organization. in this they apply the IT application and to apply this in the organization they have to include all the important data and the research paper also, the data report to get the better and innovative result in the return of this application (Lee, et al., 2017).

Auditors independence

Based on the pie chart above and the diversified source of debt of the company explains the difference between the debt capital market is 62% and 38% of the bank debt. As the company has to increase the amount of their investment and the investors for the company because of their property dealings, based upon these data they have to reduce the amount of the debt in the company from the capital market which is at the highest point of the bank debt DEXUS LTD (DXS) (Haeridistia, 2019).

As the investigator officer, we have to apply the risk-based auditing approach method to reduce the chances of the risk and after that, as we have found out the auditing concepts there is a misstatement happen in both the agriculture companies’ investment (Haeridistia, 2019).

As the organization has to increase its company goodwill, and capital debt and reduce the business risk. Also, they have to implement the risk management system the organization has applied these are the auditing standard for the better result such as:

ASA330 – The auditor’s responses to assessed risk

ASA570-Going concern

ASA700-Forming an opinion and reporting on a financial report

These three are the auditing standard that is going to apply to DEXUS LTD (DXS) organization financial data to understand the real issue of the company and find out the solution to develop the investment amount fund increased is also, important as they have to reduce the capital debt of the company (Mexmonov, 2020).

Risk of material misstatement (RMM)

Based on the above data and the annual report these are the audit standard that is important to apply to the organization according to the current situation of the company (Oh,2021).

There is a risk appearance in the company as there are the expenses that occur in the DEXUS LTD (DXS) financial year performance report and also, they have to focus increase the level of the company funds and the net sales of the organization in these financial years. As the investigator officer and based on these data also, the risk appears in the organization. they have to apply ASA 330 in this auditing standard they have to give a response to assessed risk after this step and apply this auditing standard in the organization they have to apply the second audit standard and that is ASA 570 going concerned this is also, known as the important audit standard in the company (Mexmonov, 2020).

Business strategies

The strategy of the business is to apply these audit standards in the organization for better and more effective results. The last audit standard that is going to be applicable in the organization the provide a better and more helpful amount of information and the knowledge related to the company financial report and the forming of the financial report is also, impacts the organization’s data management and the other things need to be done in the finding section of the organization for the reduce the risk in the organization and improve the working policy and also, with the help of the audit standards of the organization (Mexmonov, 2020). they have applied these findings in the risks appearance and the risk occurrence section of the organization to reduce the chances of the risk in the company and help the company get on track as the two agriculture companies of the DEXUS LTD (DXS) having an issue in the productions and they having the low amount of the funds increase in the company. These are the audit standard that is needed to be applicable in the situation of the DEXUS LTD (DXS) organization based on the financial data of the company the annual report explain the company’s position in the market and the other data explain the company’s working process (O’Connor, et al., 2019).

Business risk

The increasing the level of the business risk and after the risk, identification they have to make sure to handle the things in the better manner. These audit standards are the findings and the solutions of all these three cases of the organizations the company has to increase its funds and the net sales amount by 40% and on the other hand, the DEXUS LTD (DXS) organization has to increase the investment and the sales of all the different parts and product companies to get better and the positive result from the organization and improve the company policy in the market (O’Connor, et al., 2019).

Implement the findings

Based on all the cases and the audit standard of the organization that is going to be applied to the company to resolve the issue related to the risk, revenue, sales, production, goodwill, leases also, fixed capital, and the asset as the organization has to increase their funds and the net sales amount and they have to reduce the risk appearance in the organization. In the first case as there is the need to boost the company working policy to get better and the positive result in return they have to take and apply the ASA 705 modification of the company opinion as there is progress in the funds also, the net sales of the company year by year but as they have to hike the changes from 20 to 40% as they have to put double effort to workout and take out the 40% of net sales. This is the reason behind this auditing standard will be applied in this process in which they change the opinion of the company and their organization members’ point of view while working and they have to apply a new working policy in this case.

The organization has to get changes and also, they have to apply the ASA 330 and ASA 570 audit standards will be applied in this process as the company investors of all the 21 countries of having an issue and facing risk in the market as their investment and sales are wanting down and they have to increase both the companies sales in the market and also, they have to focus on the company investment department too as this is an important section. As the investigating officer, they have to check on the quarter-wise investment of the company and the sales (Garg, 2018).

In the third case the organization as they have to focus on increasing the company goodwill amount and reducing the capital debt risk. Also, increase the company capital and the fixed capital amount for the company’s betterment and this they have to fix the company issue and reduce the risk chances in the organization for the better and perfect settlement of the company (Garg, 2018).

Conclusion

According to the report that is mentioned above and all the details also, data showed clearly that there need to change required in the DEXUS LTD (DXS) organization and their financial data also, the annual report of the company to reduce the risk appearance in the organization. They have to make the policy to improve the company working policy and in return, they will get better and innovative results for this, they have to apply the audit standard in the organization. There are four types of Audit standard that are going to be or needs to be implemented in the organization for the better settlement of the company and those are ASA $10,601,241. These are the audit standard that is needed to implement in the company. There has been also the information available in the company and the auditing assurance and their ethics handbook of 2021 will explain the real meaning and the changes require in the organization. Therefore upon all this information as I investigate the audit report of the DEXUS LTD (DXS) organization and according to my study and the point of view there is a true and fair statement in the company according to the cases changes and the risk appear in the organization these audit report helps the company to grow better.

 

 

References

Abernathy, J. L., Beyer, B., Gross, A. D., & Rapley, E. T. (2017). Income statement reporting discretion allowed by FIN 48: Interest and penalty expense classification. The Journal of the American Taxation Association39(1), 45-66.

Alzeban, A. (2015). Influence of audit committees on internal audit conformance with internal audit standards. Managerial Auditing Journal.

Amalia, F. A., Sutrisno, S., & Baridwan, Z. (2019). Audit Quality: Does Time Pressure Influence Independence and Audit Procedure Compliance of Auditor?. Journal of Accounting and Investment20(1), 130-144.

Bédard, J., Coram, P., Espahbodi, R., & Mock, T. J. (2016). Does recent academic research support changes to audit reporting standards?. Accounting Horizons30(2), 255-275.

BOTEZ, D. (2015). Aspects Regarding the Quality of Statutory Audit Reports. Audit Financiar13(123).

Garg, P. (2018). Is fistulotomy still the gold standard in present era and is it highly underutilized?: an audit of 675 operated cases. International Journal of Surgery56, 26-30.

Haeridistia, N., & Fadjarenie, A. (2019). The effect of independence, professional ethics and auditor experience on audit quality. International Journal of Scientific & Technology Research8(2), 24-27.

Lee, B. B., Shin, H., Vetter, W., & Kim, D. W. (2017). Management of income statement variables to report small positive earnings numbers. Asian Review of Accounting.

Mexmonov, S. (2020). The Role of the Internal Audit Based International Internal Audit Standards in Uzbekistan. Архив научных исследований33(1).

O’Connor, R., O’Callaghan, C., McNamara, R., & Salim, U. (2019). An audit of discharge summaries from secondary to primary care. Irish Journal of Medical Science (1971-)188(2), 537-540.

Oh, H. I., & Penman, S. H. (2021). Income Statement Mismatching Conveys Information and Has Not Reduced the Informativeness of Earnings Over Time. Columbia Business School Research Paper, Forthcoming.

Smith, K. (2021). Tell me more: A content analysis of expanded auditor reporting in the United Kingdom. Available at SSRN 2821399.

 

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