You a member of the audit team at Miller Yates Howarth (MYH), anaccounting firm...

90.2K

Verified Solution

Question

Accounting

You a member of the audit team at Miller Yates Howarth (MYH), anaccounting firm with offices throughout the major regional centresof NSW and Queensland. Although a medium sized firm by nationalstandards, MYH is the second largest regional accounting firm inAustralia. Most of MYH’s audit clients are in the agriculture,mining, manufacturing and property industries. All those industriesare currently under pressure, either from a downturn in commodityprices or fierce competition from overseas competitors. MYH havenow been appointed auditors of a community bank. Two auditdirectors have previous experience auditing in the banking sectorand need to raise the awareness of staff with respect to thegovernance issues that have recently impacted the banking sector.Question 1 (7%) Required: You have been asked to: read auditstandard ASA315 focusing on audit responsibility with respect toclient governance, read the web page on the ASIC report on theCommonwealth bank which details the governance issues raised byASIC (http://www.apra.gov.au/MediaReleases/Pages/18_17.aspx), andprepare a report that: summarises and justifies the auditor’sresponsibility to review the governance of an audit client, andIncludes a table for use in the audit which explains the impact ofeach of the ASIC identified Commonwealth Bank governance issues onaudit risk. The table should further explain why each of the ASICrecommendations would reduce audit risk. The template below shouldbe used. Issue Impact on raising audit risk RecommendationReduction in audit risk because of the recommendation

Answer & Explanation Solved by verified expert

4.3 Ratings (907 Votes)

Auditors responsibility to review the governance of an audit client The auditor shall perform risk assessment procedures to provide a basis for the identification and assessment of risks of material misstatement at the financial report and assertion levels Risk assessment procedures by themselves however do not provide sufficient appropriate audit evidence on which to base the audit opinion Risk Assesment procedure includes 1 Enquiries of management of appropriate individuals within the internal audit function if the function exists and of others within the entity who in the auditors judgement may have information that is likely to assist in identifying risks of material misstatement due to fraud or error 2 Analytical See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

In: AccountingYou a member of the audit team at Miller Yates Howarth (MYH), anaccounting firm with...You a member of the audit team at Miller Yates Howarth (MYH), anaccounting firm with offices throughout the major regional centresof NSW and Queensland. Although a medium sized firm by nationalstandards, MYH is the second largest regional accounting firm inAustralia. Most of MYH’s audit clients are in the agriculture,mining, manufacturing and property industries. All those industriesare currently under pressure, either from a downturn in commodityprices or fierce competition from overseas competitors. MYH havenow been appointed auditors of a community bank. Two auditdirectors have previous experience auditing in the banking sectorand need to raise the awareness of staff with respect to thegovernance issues that have recently impacted the banking sector.Question 1 (7%) Required: You have been asked to: read auditstandard ASA315 focusing on audit responsibility with respect toclient governance, read the web page on the ASIC report on theCommonwealth bank which details the governance issues raised byASIC (http://www.apra.gov.au/MediaReleases/Pages/18_17.aspx), andprepare a report that: summarises and justifies the auditor’sresponsibility to review the governance of an audit client, andIncludes a table for use in the audit which explains the impact ofeach of the ASIC identified Commonwealth Bank governance issues onaudit risk. The table should further explain why each of the ASICrecommendations would reduce audit risk. The template below shouldbe used. Issue Impact on raising audit risk RecommendationReduction in audit risk because of the recommendation