WESTFARMERS AUDIT PLAN
The assignment is based on Wesfarmers Limited (ASX code WES).
You are to assume that you have been assigned to the audit of Wesfarmers Limited for the year ended 30 June 2017. You have been asked by the audit partner to prepare a report on Wesfarmers, detailing your understanding of the client and the implications of this understanding for audit risk. The partner reminds you that while Wesfarmers Limited’s operations include ‘Coles’, and she expects that your knowledge of Woolworths will be useful in preparing the report, she reminds you that there are many areas of differentiation between Wesfarmers Limited and Woolworths Limited, and that you should be mindful that your client is Wesfarmers and not Woolworths. WESTFARMERS AUDIT PLAN.
1.A commonly used tool to assist in conducting strategic analysis decomposes the client’s business environment into the following four spheres of influence –
Prepare a SWOT analysis detailing the kinds of factors that may have a material impact on the operations of Wesfarmers Limited. Two factors are expected for each of the four areas. Be sure to identify how each of the factors impacts Wesfarmers. WESTFARMERS AUDIT PLAN.
- On the basis of your team’s analysis reported under SWOT analysis above, list and explain three key audit risks which would impact on the audit of Wesfarmers Limited. Include the account and assertion most affected by the risks identified. Be sure to link audit risks to their applicable business risks. Note: For this part, do not include any risk factors arising from Rob Scott succeeding Richard Goyder as Managing Director (these risks should be discussed in question 3) or any risks arising from the company’s expansion of Bunnings into the UK market (these risks should be discussed in question 4).
- On 14 February 2017, Wesfarmers Limited announced that Rob Scott would succeed Richard Goyder as Managing Director. How will this transition in senior management affect your audit for the year ended 30 June 2017?
- On 18 January 2016, Wesfarmers Limited announced its acquisition of UK retailer ‘Homebase’ as a means of facilitating the expansion of Bunnings into the UK market. How will the ongoing expansion of Bunnings into the UK market affect your audit plan for the year ended 30 June 2017?
- It is an audit plan and we should analyses Wesfarmers Ltd from the auditor’s perspective [within the framework of auditing standards (Australian Auditing Standards ASAs)]. WESTFARMERS AUDIT PLAN.
- In the essay, SWOT analysis (question 1) and audit risk analysis (question 2) should be connected; they must not be separate part. What the SWOT includes should be decided by the audit risk. WESTFARMERS AUDIT PLAN.
- Audit risk analysis (question 2) includes 3 audit risk. Each risk should have 4 to 5 proofs (facts or evidence) to support the audit risk analysis, like the financial information from the annual report, information from PwC, annual report analysis, the facts incurred before. After analyzing each risk, there should be 1 or 2 sentences to give recommendations to mitigate this risk. WESTFARMERS AUDIT PLAN.
- Do not only be limited to annual report of Wesfarmers Ltd. We are required to do extensive research, employ publicly available information on internal and external environments, operations and strategies of annual report and other relevant information. WESTFARMERS AUDIT PLAN.
- The total number of words should be between 1800 and 2000 words, may be 6-7 pages.
- SWOT and audit risk should be supported by evidence and each factor are better to involve in-text citation. (the number of in-text citation should be at least 6 in all)
- Assertions about classes of transactions and events, and related disclosures are attached, please refer to it. Annual report of Wesfarmers Ltd for the year ended 30 June 2017 is also attached. WESTFARMERS AUDIT PLAN.
- Do not only consider coles supermarket, other subsidiary companies should also be considered.
- There should be at least 10 references (Bibliography).
- For question 3, you can know more from the web page: https://www.google.com.au/amp/s/amp.afr.com/business/retail/wesfarmers-ceoelect-rob-scott-plots-nonretail-expansion-20170529-gwfrre?from=singlemessage
- In question 2, the account name, should come from the annual report. Do not write an account name which does not exist in the annual report. WESTFARMERS AUDIT PLAN.
WESTFARMERS AUDIT PLAN
Wesfarmers Limited is an Australian public listed company which operates in the retail industry. The company generates most of its revenue from supermarkets and grocery stores across Australia. In 2016, the company generated revenue amounting to $66,216,000 (Wesfarmers Annual Report, 2017). It has acquire others firms as it expand its business operations outside Australia. It also engages in office supplies, fertilizer, energy and home improvement. (Reuters, 2017). These risks can be identified by carrying out an in-depth SWOT analysis of the business. SWOT analysis identifies the internal strength, weakness, opportunities and threat affecting the company. This analysis help to identify weakness and risk that might be facing the business…………
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