Referencing : Anglia rusking style

Report on Industry Analysis based on ASA 701 & ASA 570
Executive Summary
This report describes the industry comparison between two companies that belong to two different industry. This summary includes summary of ASA 701, ASA 315 & ASA 570. We will apply these standards to the taken companies and analyse how these standards applies and affects these companies.
As per the standards on auditing (ASA-701) : “Communicating Key Audit Matters in the Independent Auditor's Report” is the new reporting to be done by the auditors across the globe. This ASA was brought as the shareholders of the companies who want more information about the investment they have made in the respective companies. Along with the key audit matters, the shareholders or the investors would also prefer having potential issues which may exist and which may question the going concern ability of the firm. They want the auditors to find out potential threats to the mistakes and risks.
Table of Contents
    S.N.
    Topic
    
    1
    ASA 701
    
    2
    ASA 570
    
    3
    Description of ASA
    
    4
    ASA 315
    
    
ASA 701
Applicability and Scope
AUASB issued the audit standard ASA 701 "Report on Important Audit Matters in Independent Auditor's Report" as per the following legal regulations and strategic directions. According to Article 336 of the 2001 Companies Act, AUASB can set audit standards for company purposes. These audit standards are legal tools for the 2003 Legislative Tools Act.
According to the AUASB's strategic guidelines of the Financial Reporting Council (FRC), among other things, AUASB must establish audit standards that are clearly in the public interest and of the highest quality. ASA701 suggests the auditor to disclose the key audit matters in auditor’s report. The audit standard contains a difference from ISA 701, which is carried out in accordance with the Australian legal framework, and the quality of the audit can be maintained if AUASB believes that there is a good reason to do so.
The requirement and the attachments required along with explanatory material for KAM are given in this standard on auditing. This ASA 701 displays AUASB’s mission to provide with the latest improvements for the better information and presentation of audit report and also incorporating the suggestions of the IAASB.
Following are the characteristics of ASA 701:
(a) KAM requires audits of listed companies to be reported in the audit report;
(b) Allows auditors of other organizations to decide whether to include CAeM in their audit reports;
(c) How does the auditor determine CAeM:
(i) From the items that are brought to the attention of the responsible person, find out the items that require special attention by the auditor.
(Ii) Consider the areas of increased risk, major audit opinions (including major management judgments), and the impact of major events;
(iii) Determine the key items to be included in the audit report;
(d) How should the auditor describe each CAeM?
(E) Circumstances where specific matters such as KAM are not reported in the audit report;
(f) Audit document requirements related to CAeM.
This audit standard defines the auditor's responsibility for communicating the most important audit items in the auditor's report. It aims to address the auditor’s judgment and the information in the auditor’s report, as well as the form and content of this press release. Compared with the key audit matter report that provides additional information to help the intended users of the financial report (the "target user"), the purpose of communicating key audit matters is to increase the communication value of the audit report by providing greater audit transparency.
Understanding that the auditor considers the most important issues for the audit of the current financial statements and communicating key exam questions can also help target users understand the nature and field of key decisions made by management in the process.
ASA 570
Applicability and Scope
ASA 701 establishes the responsibilities of the auditor to solve the most important audit issues. This ISA recognizes that one of the KAM can be the point of going concern of a company, and declares that certain uncertain events which may be material may create doubt that the company will be able continue its operations: Naturally It is a central examination question.
The use of going concern can be in regard to government organizations as used by the management. Under circumstances where public sector entities are profitable, where the support of the government may decline or under circumstances that may cause major consequences, the ability of public sector companies to continue operations may emerge. Questions about the ability of the company to continue to be a public sector issue may include situations where public sector organizations lack the means to survive or make policy decisions that affect them.
The management's assessment of the company's ability to continue operations is an integral part of the auditor's review of the company. The auditor is not responsible for correcting any deficiencies in the management review. However, in some cases, the lack of detailed management analysis to support its judgment does not prevent the auditor from determining that management’s use of the going concern benchmark is appropriate.
For example, if there have been profitable transactions in the past and financial resources are easily available, management can make an assessment without detailed analysis. The other procedures as performed by the auditor are sufficient enough for the auditor to determine whether the continuation of the operations by the management are appropriate in the context of the preparation of the financial...