Hi6026- Compliance Requirements Of A Assessment Answer



Background of the Report

In order to increase transparency in the reporting system, enhanced audit requirements have been framed. For the purpose of this report, annual report of the company has been analysed. This will help in understanding the compliance requirements of reporting by auditors as well as by management.

Scope of the Project

The report is presented in seven major headings namely, Auditor’s Independence Declaration; Independent Auditor’s Report; Non-audit services performed by the auditor; Auditor’s Remuneration; Audit Committee; Independent Auditor’s Report to the shareholders and; Review of Key Audit Matters.

New regulations framed for the above headings are discussed in detail below.


Altium Limited is an American Company, owned by Australian public software company which is involved in the activities related to designing of software for those engineers engaged in designing printed circuit boards (Altium Limited, 2018). In other words, it operates under software industry. The reason behind selecting this company for analysis is that it is a listed company (listed on Australian Stock Exchange). Its headquarters are in United States of America. Since, it is a listed company therefore it is required to follow the new guidelines framed for improving the quality of reporting by the auditors. Such an evaluation of the annual report will provide an insight into the extent to which the regulations framed in this regard have been complied with. 


1) Auditor’s Independence Declaration  

The law which lays down all the requirements related to compliance procedures to be adopted by the auditor of the company is the Corporations Act, 2001 (CCH Australia Limited, 2011). Independence of auditor appointed by the company is one such compliance requirements that have been mentioned in the act. As per the provisions of the act and some other regulations by other authorities such as auditing standards issued in this regard, an auditor must act separately from the company in which he is serving as an auditor and must be careful and vigilant so that an appropriate opinion can be drawn by him (CAANZ (Chartered Accountants Australia & New Zealand), 2016). The opinion can be relied upon only when the auditor is working separately from the organization. He must not have any personal interests in such as organization.  Companies operating in Australia have to adhere to several laws framed by different authorities. The regulations with relation to independence of auditor are as follows:

  • Section 307C stated under the Corporations Act, 2001, give details about the declaration of independence that an auditor of a company is required to produce and it forms a part of the annual report of the company. According to the provisions stated in this section, an auditor is supposed to declare that he is independent from the company and this information is to be given in the Auditor’s Independence Declaration. Furthermore, there are some other provisions also that have been mentioned in this act and they include Divisions 3, 4 and 5 of Part 2M.4 (Wolters Kluwer, 2018).
  • In addition to the above provisions of Corporations Act, 2001, there are some other provisions also which are to be followed. APES 110 contain certain ethical codes of conduct that are applicable on the auditors of the company. As per the regulations, all the auditors are required to declare their independence and that they have been ethical while discharging their duties as an auditor. The declaration is about informing the members of the company that they have discharged their duties with utmost vigilance and fulfilled their ethical responsibilities (Chartered Accountants (Australia-Newzealand), 2018).

The auditors of Altium Limited have also given a statement for their independence in the annual report of the company by the name ‘Auditors Independence declaration’, which is as per the provisions stated under the Corporations Act, 2001. The declaration given in the report also mentions that the auditors of the company have diligently followed the Code of Ethics for professional accountants given under APES 110. Ethical responsibilities have been fulfilled throughout the audit in accordance with the code (Altium Limited, 2017).   

2) Independent auditor’s report

The purpose of conducting an audit is to express an opinion on the truth and fairness of the financial statements of a company that are prepared by the management (Porter et al., 2014). Hence, in other words, the opinion of the auditors has a huge impact on the members and shareholders of the company as their decisions are based upon their opinion (Basu, 2010). There are four types of opinion which can be given by an auditor (opinion depends upon the findings of audit), which include

  • Unqualified Opinion;
  • Qualified Opinion;
  • Adverse Opinion and;
  • Disclaimer of Opinion (Leung, 2009)

The auditors of Altium Limited have issued an unqualified opinion, which means in the opinion of auditors the financial statements so prepared by the company presents a true and fair view. This opinion of the auditors also suggests that the management has complied with all the laws effectively. 


3) Non-Audit services performed by the Auditor

Non audit services are those services which are accepted by an auditor of a company in addition to his audit and assurance services. These services might have an impact on the independence of the auditor as the auditor may develop some personal interests in the business of the company. Therefore, the non audit services form one of the most significant factors that affect independence while performing an audit. The auditor is therefore required to exercise utmost care and judgment prior to accepting the task of performing any non audit services to the client (Frankel, 2018).

There are some countries in which the auditors are not allowed to take up any other services in the same company in which they are performing audit. One such country is the United States of America. In order to keep a check on the auditors the American authorities framed Sarbanes and Oxley act. As per the act, the auditors are strictly prohibited to undertake any activity other than providing audit services in the same company (Mitchell, 2018). However, in countries such as Australia, there is no such restriction on auditors. The auditors in Australia can perform other services such as providing taxation consultancy in the same company. However, they are supposed to give a declaration of their independence in writing. In case where the auditor comes across a conflict of interest then he must not accepts such an assignment and give such information to the relevant authorities (ASIC, 2018).

The auditors of Altium Limited have also performed non audit services in the year 2017. As per the declaration given by the auditors in this regard, they have performed their work with full integrity and that providing such services did not have an impact on objectivity of the auditor. The auditors of the company have provided tax consulting services in addition to the audit services in the year 2016. But in 2017, the company has not received any payment for providing non audit services (Altium Limited, 2017).

4) Auditors’ Remuneration

The auditors of the company are given a certain amount of payment for the services they perform for the company. Remuneration is paid for both audit and non audit services given by the auditors (Caanz , 2015).

As per the information given in the annual report, the auditors of the company performed both audit as well as non audit services. The information about the remuneration paid to the auditors is given in notes to accounts. The table below provides the remuneration maid to the main auditors for both audit as well as non audit services.




Percentage Change

Audit or review of the financial report




Other non audit related services (In relation other assurance, due diligence and taxation)




Total Remuneration




The above table gives a detail about the remuneration for audit and non audit services. In the year 2017, there can be seen a sharp decline in the audit fees by 16%. Also the auditors of the company did not perform any non audit services in 2017.

5) Role, functions and composition of the Audit Committee

The main purpose of establishing audit committees is to provide assistance to the board so that they are able to discharge their responsibilities with due care and diligence (CAANZ (Chartered Accountants Australia & New Zealand), 2016).  It is also the responsibility of the audit committee to see that all the internal controls are working effectively. All the companies that are listed of Australian Stock Exchange are required to form an audit committee (Arens et al., 2016).

Altium Limited has established an Audit and Risk Management Committee, which comprises of three non executive directors. Such directors possess knowledge required for this purpose. No information about the committee is given at one place in the report which makes it difficult to find out the composition of the committee and its roles.

6) Independent Auditors report to the members (shareholders)

As per the Australian Accounting Standards, the auditors of all the companies have to submit a report regarding the findings of their audit and also express their opinion on the financial statements, based on which the members take important decisions. Hence, the auditors have a huge responsibility towards the members and shareholders and their opinion on the financial statements matters a lot (Gay & Simnett, 2015). However, the auditors are not responsible for the preparation of the financial statements. The preparation as well as presentation of the financial statements is the responsibility of the company’s management (Knechel & Salterio, 2016). Management is responsible for choosing the most appropriate accounting policies and it also has to ensure that the financial statements are free from any material misstatements (Media, 2015).

Subsequent events are also required to be reported to the members of the company. Subsequent events are those events which arise after the date of balance sheet but before issuance of financial statements. These are required to be reported so as to evaluate their impact on the financial statements. One such event occurred in the financial statements of Altium Limited. The company acquired a 100% stake in Upverter Inc. which is based in Canada. This was acquired in August 2017. The amount involved is significant and the company is required to issue ordinary shares for the same.  However, no shareholder approval has been taken by the company. 


7) Review all Key Audit Matters noted and the associated audit procedures

In order to bring about more clarity and transparency in the reporting to the members and shareholders of the company, the auditors and the auditing firms are required to comply with the new regulations framed in this regard. These are termed as Enhanced Audit Reporting Requirements. As per the regulations, now the auditors of the company are required to report on certain additional matters which according to them are significant to be reported separately. The reason for stating key audit matters is to bring a clear picture of the major transactions that might have an impact on the financial statements of the company, to the members. The auditors of Altium Limited have reported two key audit matters in their report to shareholders and members. These matters are as follows:

  • Recoverability of deferred tax assets
  • Carrying value of goodwill and other definite lived intangible assets(Altium Limited, 2017)

The auditors addressed the key audit matters based on the audit of the whole of financial statements. These matters are detailed as under:

Recoverability of deferred tax assets- This matter is related to the recognition of deferred tax assets as per the Australian Accounting Standards. As per the standards, the extent to which deferred tax assets can be recognized depends on the probability that the company has taxable profits in future. It is essential to ensure that there are profits in the company in foreseeable future because only then the benefits of deferred tax can be realized. Deferred tax assets provide tax benefits on future income as they can be deducted from future profits and hence there is lesser tax liability on the company at that point of time. The reason behind considering deferred tax assets as a key audit matter is the quantum involved. It is because of the quantum of money, the auditors of the company had to exercise a significant judgment to make an assessment about the sufficiency of profits in the future so that the tax benefit can be availed in the later years. 


The auditors of the company applied test of controls and test of detail of balances in order to calculate the foreseeable profits of the company.

Carrying value of goodwill and other definite lived intangible assets- All the assets of the company are required to undergo an annual impairment assessment as per the Australian Accounting Standards. Intangible assets such as goodwill are also included in this. At the end of the year, these assets are tested for the impairment. The management of the company had prepared certain financial models for the purpose of carrying out test of impairment. This involved estimation of cash flows and also rates of discount. Hence, the auditors of the company considered this as a key audit matter. The methods used for estimating the flows of cash, the rate of discount as well as the growth rates.

The auditors of the company applied substantive procedures in order to assess the models used by the company to forecast the cash flows. In addition to this, some models were also prepared by the auditors and hence test of detail of balances.


The purpose of presenting this report was to identify whether the company and its auditor selected is complying with rules and regulations framed to bring about transparency in reporting. All the information so provided in this report appears to be backed by appropriate law. However, with respect to the information about the audit committee, the annual report does not provide for the same. Also the website of the company does not contain such information. The reason may be that the annual report comprises of such information also which is not required to be provided and because of this main information gets lost. This must be avoided by the company. 



Altium Limited, 2017. Annual Report. Altium Limited.

Altium Limited, 2018. About Us. [Online] Available at: https://www.altium.com/ [Accessed 17 September 2018].

Arens, A. et al., 2016. Auditing, Assurance Services and Ethics in Australia with ACL Access Code Card. Pearson Education Australia.

ASIC, 2018. Auditor independence and audit quality. [Online] Available at: https://asic.gov.au/regulatory-resources/financial-reporting-and-audit/auditors/auditor-independence-and-audit-quality/ [Accessed 16 September 2018].

Basu, S.K., 2010. Fundamentals of Auditing. Pearson Education.

CAANZ (Chartered Accountants Australia & New Zealand), 2016. Auditing, Assurance and Ethics Handbook 2016 Australia: Incorporating All the Standards as at 1 December 2015. John Wiley & Sons.

CAANZ (Chartered Accountants Australia & New Zealand), 2016. Auditing, Assurance and Ethics Handbook 2016 Australia: Incorporating All the Standards as at 1 December 2015. John Wiley & Sons.

Caanz , 2015. Auditing and Assurance Handbook 2015 New Zealand+auditing and Assurance Handbook 2015 New Zealand Wiley E-Text Card. John Wiley & Sons Australia, Limited.

CCH Australia Limited, 2011. Australian Corporations & Securities Legislation 2011: Corporations Act 2001, ASIC Act 2001, related regulations. CCH Australia Limited.

Chartered Accountants (Australia-Newzealand), 2018. Perspective.

Frankel, R.M., 2018. The Relation Between Auditors' Fees for Non-Audit Services and Earnings Quality (Classic Reprint). Fb&c Limited.

Gay, G.E. & Simnett, R., 2015. Auditing and Assurance Services in Australia. McGraw-Hill Education (Australia).

Knechel, W.R. & Salterio, S.E., 2016. Auditing: Assurance and Risk. Routledge.

Leung, P., 2009. Modern Auditing & Assurance Services. John Wiley & Sons Australia.

Media, B.L., 2015. CPA Australia Advanced Audit and Assurance: Passcards. BPP Learning Media.

Mitchell, K., 2018. Independence – Navigating the murky waters between Audit & Non-Audit services. [Online] Available at: https://rochford-group.com/independence-navigating-murky-waters-audit-non-audit-services/ [Accessed 11 September 2018].

Porter, B., Simon, J. & Hatherly, D., 2014. Principles of External Auditing. Wiley.

Wolters Kluwer, 2018. Corporations Act 2001, Section 307c Auditor’s Independence Declaration. [Online] Available at: https://iknow.cch.com.au/document/atagUio486340sl14508496/corporations-act-2001-section-307c-auditor-s-independence-declaration [Accessed 9 September 2018].


Upload Document Document Unser Evaluion Get Money Into Your Wallet

Cite This work.

To export a reference to this article please select a referencing stye below.

Assignment Hippo (2022) . Retrive from https://assignmenthippo.com/sample-assignment/hi6026-compliance-requirements-of-a-assessment-answer

"." Assignment Hippo ,2022, https://assignmenthippo.com/sample-assignment/hi6026-compliance-requirements-of-a-assessment-answer

Assignment Hippo (2022) . Available from: https://assignmenthippo.com/sample-assignment/hi6026-compliance-requirements-of-a-assessment-answer

[Accessed 30/09/2022].

Assignment Hippo . ''(Assignment Hippo,2022) https://assignmenthippo.com/sample-assignment/hi6026-compliance-requirements-of-a-assessment-answer accessed 30/09/2022.

Buy Hi6026- Compliance Requirements Of A Assessment Answers Online

Talk to our expert to get the help with Hi6026- Compliance Requirements Of A Assessment Answers from Assignment Hippo Experts to complete your assessment on time and boost your grades now

The main aim/motive of the finance assignment help services is to get connect with a greater number of students, and effectively help, and support them in getting completing their assignments the students also get find this a wonderful opportunity where they could effectively learn more about their topics, as the experts also have the best team members with them in which all the members effectively support each other to get complete their diploma assignment help Australia. They complete the assessments of the students in an appropriate manner and deliver them back to the students before the due date of the assignment so that the students could timely submit this, and can score higher marks. The experts of the assignment help services at www.assignmenthippo.com are so much skilled, capable, talented, and experienced in their field and use our best and free Citation Generator and cite your writing assignments, so, for this, they can effectively write the best economics assignment help services.

Get Online Support for Hi6026- Compliance Requirements Of A Assessment Answer Assignment Help Online

Want to order fresh copy of the Sample Hi6026- Compliance Requirements Of A Assessment Answers? online or do you need the old solutions for Sample Hi6026- Compliance Requirements Of A Assessment Answer, contact our customer support or talk to us to get the answers of it.

Assignment Help Australia
Want latest solution of this assignment

Want to order fresh copy of the Hi6026- Compliance Requirements Of A Assessment Answers? online or do you need the old solutions for Sample Hi6026- Compliance Requirements Of A Assessment Answer, contact our customer support or talk to us to get the answers of it.

Submit Your Assignment Here

AssignmentHippo Features

On Time Delivery

Our motto is deliver assignment on Time. Our Expert writers deliver quality assignments to the students.

Plagiarism Free Work

Get reliable and unique assignments by using our 100% plagiarism-free.

24 X 7 Live Help

Get connected 24*7 with our Live Chat support executives to receive instant solutions for your assignment.

Services For All Subjects

Get Help with all the subjects like: Programming, Accounting, Finance, Engineering, Law and Marketing.

Best Price Guarantee

Get premium service at a pocket-friendly rate at AssignmentHippo


  • Assignment Writing Guide
  • Essay Writing Guide
  • Dissertation Writing Guide
  • Research Paper Writing Guide


  • Accounts
  • Computer Science
  • Economics
  • Engineering

Client Review

I was struggling so hard to complete my marketing assignment on brand development when I decided to finally reach to the experts of this portal. They certainly deliver perfect consistency and the desired format. The content prepared by the experts of this platform was simply amazing. I definitely owe my grades to them.

Tap to Chat
Get instant assignment help