Auditing

AUDITING
Table of Contents
1.0 Introduction    3
2.0 Brief History of Dick Smith    4
3.0 Cause of Collapse of Dick Smith    6
4.0 Activities of the Directors in the Context of AAS    7
5.0 Auditors’ Responsibilities and Recommendations for the Auditors    8
6.0 Analysis of Going Concern Assumption    10
7.0 Conclusion    11
References    12
1.0 Introduction
Analysis of corporate failure due to improper corporate governance and lack of auditors’ professional responsibilities may be considered to be an important and critical aspects in the study of auditing as the process of such analysis may consider lots of variables that are both internal and external to the business ("The fall and fall of Dick Smith - Inside Retail", 2018). Moreover, the evaluation attempts to identify the loopholes within the operating system of the business as well as the roles and responsibilities framework of the professional (Johansson, Olsson & Andersson, 2016). The instant report deals with such a subject where the fall of Dick Smith Holdings Limited (hereinafter may be referred to as "Dick Smith" or the company or the firm, as the case may be) has been analysed in the context of auditing standards prevalent in Australia.
At the very beginning of the study, the researcher provides a brief description of the operational overview of the organisation followed by the causes of the collapse of the business. It is needless to state that such causes have been analysed with reference to the Australian Auditing Standards (AAS) and also involve the actions performed by the directors of the company in this regard. In the subsequent part of the study, the researcher assesses the auditors' responsibilities with reference to the given case with a special emphasis on the assumption of going concern as may be evident from last audited annual report (2014-15). The report will attempt to establish only those assumptions which may exhibit that the company was not considering the going concern assumptions. In addition, the researcher wraps up the discussion by way of providing a recommendation for the auditors as to what could have been done by them in the specific case. Finally, the discussion is closed through the concluding note.
2.0 Brief History of Dick Smith
Dick Smith was a retail store business based in Australia with a major focus on consumer durables, electronics goods and project kits. The company was founded by Mr Dick Smith and by his name the company was named. The company was listed in Australian Stock Exchange (ASX) for few years before it was closed down in the year 2016 by way of acquisition by Anchorage Capital Partners ("The fall and fall of Dick Smith - Inside Retail", 2018). The operation of Dick Smith was spread in New Zealand as well apart from Australia and served millions of customers for their consumable needs. The primary focus of the business was to invest in building a relationship and nurturing the community served and thereby earning the sustainability and legacy in the given landscape (Australia, 2018). The company was associated with some of the top brands worldwide like Apple, Sony, Samsung, Google, HTC etc and expanded rapidly during the 1980s.
Brands associated with Dick Smith
(Source: Australia, 2018)
As of May 2016, Kogan.com acquired the brand name of Dick Smith and started own operations with such brand position and customer base. The taking over of the operations of Dick Smith by Kogan.com may be termed to be the final closure of the firm.
3.0 Cause of Collapse of Dick Smith
The reason why Dick Smith collapsed is attributable to the shortfall of funds for the creditors to the extent of almost $260 million...