As a starting point, students should download the following two financial reports:
Preliminary Financial Reports for 2010
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Statutory Half Yearly Report for 2010
Analytical procedures and risk identification
(a) Perform analytical procedures in order to identify and assess Wesfarmers’ business risks. You are expected to have carried out research and analysis to support your assessment, e.g., Wesfarmers’ web site, resources available through the library, and the media.
(10 Marks) (think what information can/cannot be used)
(b) Identify and describe briefly the mechanisms that Wesfarmers has in place to manage risks. (5)
(c) As the auditor of Wesfarmers, at the PLANNING stage (i.e., January - February 2010) for the year ended June 2010 you are required to make preliminary judgments about materiality.
What are your preliminary judgments about materiality? In other words, given your answers to (a) and (b) above, determine planning materiality at the financial statement level. Explain your choice of base and materiality threshold used to quantify your planning materiality.
Note: the majority of the marks awarded will be for the quality of your discussion and analysis. Also, for part (a) all sources should be referenced.