APM - TPH June 2015 -Final Draft
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Attachment 2 to Item 11.3.1
___________________________________________________________________
TOWN OF PORT HEDLAND
AUDIT PLANNING
MEMORANDUM
30 JUNE 2015
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___________________________________________________________________
Contents
1 KEY ENGAGEMENT INFORMATION 1
2 BACKGROUND AND GENERAL INFORMATION 1
3 REPORTING AND DELIVERABLES 2
4 TERMS OF ENGAGEMENT 4
5 STAKEOLDERS RELATIONSIP 5
! AREAS OF AUDIT EMPASIS AND AUDIT CONSIDERATIONS 5
" OVERALL AUDIT STRATEGY #
$ APPROAC SUMMARY 12
# IMPLICATIONS OF ACCOUNTING STANDARDS 13
1% TIMING 14
11 APPENDI& A' LO( RISK AREAS 1"
12 APPENDI& B' ADDITIONAL INFORMATION CONTACTS 1#
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1 Key engagement n!"#mat"n1$1 T"%n "! P"#t He&'an& '"g(t)(
Address Civic Centre, McGregor Street
Port Hedland WA !21
"ele#hone $%&' (1)& (3%%
1$2 Key T"%n "! P"#t He&'an& *e#("nne'
Pos)t)on N*+e
Chie* +ec-tive **icer Mal s/orne
0irector Cor#orate Services Sid ain
Manager inancial Services Peter ocian
1$3 Key R+M ,#& -ame#"n *e#("nne'
Pos)t)on N*+e
A-dit Partner 0avid Wall
Princi#al "ravis 4ate
2 ,a).g#"/n& an& gene#a' n!"#mat"n
2.1 ,a).g#"/n&
"he "o5n o* Port Hedland $the "o5n' is a Western A-stralian 6ocal Governmentlocated in the Pil/ara 7egion. "he "o5n is home to aro-nd 2%,%%% #eo#le *romdiverse c-lt-ral /ac8gro-nds and covers 11,&99 s:-are 8ilometers. Port Hedland isthe 5orld;s largest /-l8 e#ort *acilit< 5ith Pil/ara Ports A-thorit< recording a recordann-al tonnage thro-gh#-t o* 3!2.3 million tonnes in 2%13=19.
"he "o5n contri/-tes signi*icantl< to the Western A-stralian and national economies,5hile delivering high :-alit< *acilities and services to its comm-nit<. 7a#id gro5th has/ro-ght man< #ositive changes to the region and set the #ath to /ecoming a vi/rantand attractive regional cit<, <et this also carries the challenge o* /alancing economicand commercial develo#ment 5ith the needs o* the local comm-nit<.
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2.2 -"#*"#ate (t#/)t/#e
"he *ollo5ing diagram s-mmarises the "o5n;s cor#orate str-ct-re?
Council
Chief
Executive
Ocer
EngineeringPlanning &
CommunityCorporat
eDevelopment
Services Development ServicesServices
3 Re*"#tng an& &e'e#a'e(
3.1 +tat/t"#y a))"/nt(
"he stat-tor< acco-nts 5ill /e general #-r#ose *inancial statements *or the *inancial<ear ended 3% -ne 2%1), #re#ared in accordance 5ith the A-stralian Acco-ntingStandards $as the< a##l< to local governments and not@*or@#ro*it entities', other a-thoritative #rono-ncements o* the A-stralian Acco-nting Standards 4oard and the
*inancial re#orting #rovisions o* the Local Government Act 1995 and accom#an<ingreg-lations.
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3.2 L")a' G"e#nment A)t 15 t4e A)t
"he Act #rovides *or the *-nctions, o#eration and governance o* the "o5n andassociated matters.
"he A-ditor is re:-ired to *orm an o#inion as to 5hether the *inancial re#ort?
1. gives a tr-e and *air vie5 o* the "o5n o* Port Hedland;s *inancial #ositionas at 3% -ne 2%1) and o* its #er*ormance *or the *inancial <ear ended 3%-ne 2%1)
2. com#lies 5ith A-stralian Acco-nting Standards $incl-ding the A-stralian Acco-nting Inter#retations' and
3. is #re#ared in accordance 5ith the re:-irements o* the Local Government Act 1995 Part $as amended' and 7eg-lations -nder that Act.
Incl-de in o-r re#ort i* 5e /ecame a5are o* an< instance 5here the Co-ncil did notcom#l< 5ith the re:-irements o* the Local Government Act 1995 and Local Government (Financial Management) Regulations 1996 as the< relate to *inancialstatements.
3.3 G#ant(
Grants received /< the local government, de#ending on its nat-re, are re:-ired to /ea-dited and to #rovide a Grant Ac:-ittal re#ort demonstrating that the "o5n has metall o/ligations in res#ect o* discharging the grant in accordance 5ith the "erms andConditions o* its -nding=Grant Agreement.
"he A-ditor is re:-ired to *orm an o#inion that the recei#ts and #a<ments are tr-eand *air and that the "erms and Conditions o* the -nding=Grant Agreement have/een adhered to.
"he Grant Ac:-ittals have di**erent re#orting deadlines 5hich need to /e adhered toin order to receive *-nds on time and in the near *-t-re. We 5ill com#lete a-dits o* grants as and 5hen re:-ired to meet the "o5n;s re#orting o/ligations.
3.4 Management 'ette#(
Signi*icant *indings, emerging iss-es and their recommended resol-tion that arised-ring the a-dit 5ill /e #rogressivel< disc-ssed and comm-nicated to the relevantde#artments and the Manager o* inancial Services. An< 5ea8nesses in controls,5hich ma< /e identi*ied d-ring the c-rrent <ear a-dit, 5ill /e highlighted in the
management letter *ollo5ing the concl-sion o* the #reliminar< and *inal a-dits.Prior <ear management letter #oints, i* an<, 5ill /e *ollo5ed -# as #art o* the c-rrent<ear a-dit #roced-res.
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3.5 Ot4e# De'e#a'e(
Ent.*ne )nte.)e, ,)t AFC
"he entrance intervie5 5ill /e held 5ith the A-dit and inance Committee $AC' and5ill mainl< com#rise the #resentation and disc-ssion o* the A-dit PlanningMemorand-m $APM'.
C0os)n6 +eet)n6 ,)t CEO
Signi*icant acco-nting iss-es and *indings noted d-ring the *inal a-dit 5ill /e disc-ssed 5iththe Chie* +ec-tive **icer $C+'.
E7)t )nte.)e, ,)t A/)t Co++)ttee
"he eit intervie5 5ill com#rise disc-ssion o* an< signi*icant matters, stat-tor<acco-nts, management letters and an< im#rovements *or *-t-re a-dits 5ith the A-ditCommittee.
6 Te#m( "! Engagement
4.1 A##angement(
A-dits are not an a/sol-te g-arantee o* the acc-rac< or relia/ilit< o* "o5n;sin*ormation, and ma< not have identi*ied all matters o* signi*icance. "his is /eca-sethe 5or8 -nderta8en to *orm an o#inion is #ermeated /< B-dgement and most a-ditevidence is #ers-asive rather than concl-sive. In addition, there are inherentlimitations in an< a-dit, incl-ding the -se o* testing, the e**ectiveness o* internalcontrol str-ct-res and the #ossi/ilit< o* coll-sion.
Primar< res#onsi/ilit< *or the detection, investigation and #revention o* irreg-laritiesrests 5ith "o5n;s management. Conse:-entl< it is the "o5n;s management 5horemains res#onsi/le *or 8ee#ing #ro#er acco-nts and maintaining ade:-ate s<stemso* internal control, #re#aring and #resenting the *inancial statements, com#l<ing 5iththe Local Government Act 1995 and other relevant la5s.
4.2 Management Re*#e(entat"n Lette#
"he a-dit #lan ass-mes that "o5n re#resentatives 5ill /e in a #osition to sign amanagement re#resentation letter. We 5ill dra*t a management re#resentation letter and*or5ard to "o5n *or consideration and revie5. "he management re#resentation letter is
e#ected to /e signed at the same time as the ann-al *inancial re#ort is signed.
We 5ill rel< on the Chie* +ec-tive **icer signing the *inancial statements asevidence that the< con*irm?
1 "he< have *-l*illed their res#onsi/ilit< *or the #re#aration o* the *inancialstatements in accordance 5ith the a##lica/le *inancial re#orting *rame5or8,incl-ding their *air #resentation
2 "he< have #rovided -s 5ith access to all relevant in*ormation necessar< or re:-ested *or the #-r#ose o* the a-dit and
3 All transactions have /een recorded and are re*lected in the *inancial re#ort.
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5 +ta.e4"'&e#( #e'at"n(4*5.1 O/# #e'at"n(4* %t4 t4e T"%n
o- have re:-ested that 5e a-dit the *inancial re#ort o* the "o5n, 5hich com#risesthe statement o* *inancial #osition *or the *inancial <ears commencing 1 -l< 2%19thro-gh to 3% -ne 2%1( and the statement o* com#rehensive income, statement o* changes in e:-it<, statement o* cash *lo5s and rate setting statement *or the <earsthen ended, and notes com#rising a s-mmar< o* signi*icant acco-nting #olicies andother e#lanator< in*ormation, and the Statement /< Chie* +ec-tive **icer.
5.2 In&e*en&en)e
7SM International a-dit methodolog< re:-ires that 5e cond-ct an ann-al re@eval-ation o*
o-r inde#endence #rior to the commencement o* each assignment. We have *-ll<satis*ied o-rselves that 5e do not have an< act-al or #erceived con*lict o* interest.
7 A#ea( "! a/&t em*4a(( an& a/&t)"n(&e#at"n(
6.1 A#ea( "! a/&t em*4a((
As #art o* the ris8 assessment, 5e have determined 5hether an< o* the ris8sidenti*ied are, in o-r B-dgment, a signi*icant or high ris8. A signi*icant or high ris8 is anidenti*ied and assessed ris8 o* material misstatement that, in o-r B-dgment, re:-iress#ecial a-dit consideration.
"he assessment is /ased -#on?1 In:-iries o* 0irector Cor#orate Services and Manager inancial Services
2 "he com#leit< o* transactions 5ithin each area
3 "he degree o* s-/Bectivit< in the meas-rement o* *inancial in*ormation relatedto the ris8, es#eciall< those meas-rements involving a 5ide range o* -ncertaint<
4 7evie5ing #rior #eriod 5or8ing #a#ers and
5 Whether the area is e#osed to *ra-d ris8.
"he *ollo5ing ta/le lists those areas that are assessed as signi*icant or high ris8. "heareas assessed as lo5 ris8 are listed in A##endi 4.
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R)s8 A.e*
Dal-ation o* Eon@C-rrent Assets
A##ro#riate acco-ntingtreatment o* reven-erecognition or -nearnedincome
"imel< deliver< o* ca#ital#roBects and assetmaintenance
A/)t A99.o*
1 "he "o5n is re:-ired to im#lement air Dal-e Acco-nting *or Plant F +:-i#ment, 7oads, 6and and4-ildings and In*rastr-ct-re over the <ears ended 3% -ne2%13, 2%19 and 2%1). We 5ill need to #er*orm #roced-ress#eci*icall< to ens-re the carr<ing val-e o* these assets isnot materiall< overstated and that the< are acco-nted *or inaccordance 5ith the re:-irements o* AAS4 11 Pro#ert<,Plant and +:-i#ment, AAS4 1%1 Presentation o* inancialStatements and the 6ocal Government $inancialManagement' 7eg-lations 1((.
2 "he "o5n receives vario-s *-nding -nderCommon5ealth and State stim-l-s #ac8ages. S-chcontri/-tions 5ill have attached conditions related to timel<deliver< o* o-tcomes. "he terms and conditions o* the*-nding together 5ith the limited time *or deliver< co-lda**ect the recognition o* the *-nding as reven-e or lia/ilit< inthe <ear. A-dit 5ill need to eamine the conditions#ertaining to material *-nding advised=received in the <earas 5ell as the stat-s o* #roBect deliver< at <ear end againststated milestones to ens-re a##ro#riate recognition anddisclos-re has occ-rred.
3 7evie5 management re#orts on #rogress againstca#ital 5or8s /-dget
4 Com#are #rogress 5ith in*ormation and e#lanationsre#orted in the Standard statements
5 7evie5 e#lanations *or dela< and=or de*erralo* #roBects
6 7evie5 timing o* ca#italisation o* com#leted #roBects
7 +ns-re the 5ritten do5n val-e o* an< re#laced assetsare e#ensed #rior to <ear@end and
8 7evie5 the stat-s o* maBor #roBects, es#eciall< an<change in #roBect sco#e, *-nding and=or com#letion
details.
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R)s8 A.e*
Signi*icant B-dgementsand estimates
Eon@com#liance 5ith thetendering and :-otation#roced-res
Com#liance
7is8 o* *ra-d thro-ghmanagement override o*controls
$While the level o* ris8 o* management override o*controls 5ill var< *romentit< to entit<, the ris8 isnevertheless #resent in allentities'
A/)t A99.o*
1 "he #rices o* com#onents o* maBor non@c-rrent #h<sicalassets $s-ch as /it-men, as#halt, concrete etc.' ma< alterd-e to con*licting #rice #ress-res, /eing increased demandas a conse:-ence o* government stim-l-s activities, o**set/< disco-nts d-e to the glo/al economic crisis. 0ata held /<the "o5n /ased on #ast contracts ma< no longer re*lect
c-rrent mar8et conditions. Eeed to identi*< and eamineeternal #rice in*ormation #rior to <ear@end.
2 Assess e**ectiveness o* internal controls o#erating5ithin the #a<ment c<cle to ens-re that "o5n com#lies 5iththeir tendering and :-otation #roced-res *or decisionma8ing.
3 Consider the earl< 5or8 #er*ormed /< the "o5n onstrategies, agreed timeta/le 5ith client, earl<identi*ication and resol-tion o* iss-es,
4 7evie5 o* 6G Sol-tions ear +nd "em#late and /-dgetdoc-ments.
5 +ns-re com#liance 5ith 6ocal Government Act, A-stralian Acco-nting Standards, and other reg-lations.
6 7evie5 o* the monthl< *inancial statements and ann-al/-dget *or com#liance testing as 5ell as an anal<sis o* an<adverse trends or identi*ication o* *inancial ris8.
7 We 5ill assess the #rocesses in #lace to #reventand detect *ra-d.
8 ASA 29% "he a-ditors res#onsi/ilit< to consider *ra-din an a-dit o* a *inancial re#ort, im#oses s#eci*ic a-dit#roced-res, incl-ding?
9 "esting the a##ro#riateness o* Bo-rnal entries and other
adB-stments made in #re#aring the *inancial re#ort.
10 7evie5ing acco-nting estimates *or /iases.
11 7evie5ing signi*icant -n-s-al transactions.
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R)s8 A.e* A/)t A99.o*
7even-e C<cle • Assessment o* the e**ectiveness o* 8e< internal controlso#erating 5ithin the reven-e c<cle, incl-ding the
• 7ates reven-e a##lication controls.• Government grants • Per*orm a 5al8thro-gh on the 8e< management controls
• ser #a<s reven-e over the reven-e c<cle.
• Pro*it on sale o* non@ • Per*orm test o* control on 8e< management controlsc-rrent assets and over reven-e c<cle.
• ther income. • 7evie5 reconciliations and calc-lation o* rates reven-e
• "rade and other and com#are to historical res-lts.
receiva/les • 7evie5 *ees and charges on -ser #a<s reven-e andother income.
• Con*irmation *or grants received *rom local governmenta-thorities.
• 7evie5 monthl< reconciliations.
• 0etermine i* the disclos-res in the notes to the *inancial
statements related to client;s reven-e recognition #olic<are a##ro#riate.
• 7evie5 credit notes.
• Anal<tical revie5 techni:-es.
• 7evie5 o* receiva/les /alances and reconciliations
incl-ding con*irming a sam#le o* /alances 5ith
individ-al de/tors.
P-rchase and #a<ment • Assess e**ectiveness o* internal controls o#erating
5ithin the #a<ment c<cle.c<cle
• +#enses • Per*orm a 5al8thro-gh on the 8e< management controls
over the #-rchase and #a<ment c<cle.Ca#ital e#enses•
• Per*orm test o* control on 8e< management controls
over #-rchase and #a<ment c<cle.
1 Per*orm testing o* a sam#le on e#enses andca#ital e#enses.
6.2 Im*"#tant )4ange( n g"e#nan)e8 management "# nte#na')"nt#"' en#"nment(
"his is the *irst <ear 7SM has a-dited the "o5n. "his 5ill /e assessed as #art o* theinterim a-dit visit.
6.3 -/m/'ate .n"%'e&ge "! a))"/ntng an& )"m*/te# +y(tem(
"his is the *irst <ear 7SM has a-dited the "o5n. "his 5ill /e assessed as #art o* theinterim a-dit visit.
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6.4 Mate#a' #e'ate& *a#ty t#an(a)t"n(
"o5n is re:-ired to advise the a-ditors in 5riting o* details o* all related entities thatare in eistence at 3% -ne 2%1). "he advice sho-ld incl-de details o* the nat-re o* the arrangement, incl-ding the #eriod and val-e. A revie5 5ill /e cond-cted toens-re #ro#er acco-nting *or and disclos-re o* related #art< transactions andeec-tive rem-neration.
6.5 A**')a'e Leg('ate Re9/#ement(
In addition to the Local Government Act 1995 , the 8e< legislation im#actingo#erations and *inancial statements are?
1 State Records Act 2000 and
2or!ers" #om$ensation and %n&ur' Act 191
: Oe#a'' a/&t (t#ategy
7.1 P'annng mate#a'ty an& a&;/(te& mate#a'ty
"he #lanning materialit< level 5ill /e calc-lated and determined -sing o-r a-ditmethodolog<. "his amo-nt ma< /e adB-sted d-ring the co-rse o* the a-dit de#endingon the res-lts o* o-r a-dit #roced-res.
7.2 +/mma#y "! /(ne((8 !#a/& an& a))"/ntng #(. a((e((ment(
4-siness, *ra-d and acco-nting ris8s are assessed as lo5 /ased on the a-dit
*indings in #rior <ear, ece#t *or those s#eci*ic assertions classi*ied as high ris8 asdetailed in Section 1%.
7.3 F#a/& )"nt#"' (e'!<a((e((ment
We 5ill *or5ard "o5n a co#< o* the *ra-d control chec8list *or sel*@assessment #rior too-r *inal a-dit visit. "he *orm allo5s -s to ma8e in:-iries o* management, to o/taintheir -nderstanding on the ris8 o* *ra-d 5ithin their entit< and to determine 5hether management have 8no5ledge o* *ra-d that has /een #er#etrated on or 5ithin theentit<.
In addition to revie5ing the *ra-d control sel*@assessment /< "o5n management andthe A-dit and inance Committee, 5e 5ill #er*orm *ra-d testing as #art o* the a-dit#roced-res in areas o* man-al general Bo-rnal entries.
7.4 R(. mate#a'ty a((e((ment
Considering the /-siness, *ra-d and acco-nting ris8 assessments, the engagementteam 5ill assess 5hether each material acco-nt /alance or assertion 5ithin anacco-nt /alance #rovides signi*icant, high or lo5 ris8.
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7.5 A/&t a**#"a)4 !"# (gn=)ant an& 4g4 #(. mate#a'
a'an)e(
or all signi*icant and high ris8 material $H7M' acco-nt /alances, the engagementteam 5ill identi*< a-dit assertions that #ose high a-dit ris8 $i.e. eistence, rights ando/ligations, com#leteness, val-ation and c-t@o**'. It is li8el< that not all the assertions5ill /e deemed to /e high ris8. "hose assertions that are assessed as lo5 ris8 5ithina high ris8 acco-nt /alance 5ill /e tested in the same manner as lo5 ris8 material$67M' /alances and disclos-res.
7.5.1 Test o- Cont.o0s
Where 5e determine that an assessed ris8 o* material misstatement at the assertionlevel is a signi*icant ris8 and 5e intend on rel<ing on the o#erating e**ectiveness o* controls intended to mitigate that signi*icant ris8, 5e 5ill o/tain a-dit evidence a/o-tthe o#erating e**ectiveness o* those controls *rom tests o* controls #er*ormed in thec-rrent #eriod.
7.5.2 S:st*nt)e P.oe/.es
Where 5e have determined that an assessed ris8 o* material misstatement at theassertion level is a signi*icant ris8, 5e 5ill #er*orm s-/stantive #roced-res that ares#eci*icall< res#onsive to that ris8.
7.6 A/&t a**#"a)4 !"# '"% #(. mate#a' a'an)e(
67M /alances 5ill /e a-dited /< anal<tical #roced-res and tests o* details as
necessar<.7.7 T#an(a)t"n -y)'e Te(tng
-r a-dit a##roach involves the testing o* 8e< controls, #rimaril< d-ring the interima-dit visit, to determine the etent to 5hich 5e can rel< on those controls to #rod-cerelia/le *inancial and #er*ormance in*ormation.
4-siness c<cle control testing 5ill /e -nderta8en *or all /-siness c<cles in the *irst <ear o* o-r a-dit. In s-/se:-ent <ears, /-siness c<cle control testing 5ill /e -nderta8en on arotation /asis. +ach <ear, t5o /-siness c<cles 5ill /e selected *or in de#th testing.0e#ending on the res-lts o* o-r testing o* controls, 5e are #lanning to rel< on the controlsand red-ce s-/stantive testing on acco-nt /alances. "he remaining /-siness c<cles 5ill/e s-/Bected to 5al8thro-gh testing o* 8e< management controls.
or the c-rrent <ear, 5e 5ill /e cond-cting in de#th testing on the *ollo5ing /-sinessc<cles?
1 7even-e c<cle
2 Pa<roll c<cle.
3 Pa<ment c<cle and
4 ied asset c<cle.
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7.8 A/&t *#e*a#at"n )4e).'(t
"o assist "o5n in gathering and collating the necessar< in*ormation *or o-r #reliminar< and *inal a-dit visit?
1 P.e0)+)n*.; */)t )s)t @ We 5ill liaise 5ith the Manager inancial Services toarrange meetings 5ith relevant #ersonnel 5ith re*erence to the areas that 5e aregoing to cover, #rior to the commencement o* the #reliminar< a-dit visit.
2 F)n*0 */)t )s)t @ We 5ill *or5ard an A-dit Pre#aration Chec8list $APC' inadvance. As the re:-ested in*ormation 5ill *orm the /asis o* o-r a-dit 5or8ing#a#ers, the in*ormation m-st /e made availa/le to -s at the commencement o* o-r a-dit visit. "his assists -s in delivering an e**icient a-dit and minimisinginterr-#tions to "o5n sta**.
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> A**#"a)4 (/mma#y"he 7SM A-dit Methodolog< is an international a-dit methodolog<, -tilised /< all7SM International inde#endent net5or8 *irms 5orld5ide, that /lends technicalcom#etencies 5ith a detailed and ro/-st 8no5ledge o* the client, its mar8ets and theind-str< sector. sing these methodologies, the irm o**ers a tailored a-dit andass-rance a##roach, 5ith a strong em#hasis on earl< #lanning and ho5 the client;s/-siness *-nctions. "his ena/les -s to identi*< 8e< a-dit and ass-rance com#onentsand to tailor o-r #roced-res to the -ni:-e as#ects, siJe and nat-re o* a client;s/-siness and their service re:-irements. -r a##roach ens-res a-dit reso-rces aredirected at high ris8 /-siness c<cles and reso-rces are not 5asted on trivial /alancesor iss-es that 5ill not add val-e to <o- as a client. "he res-lt is an e**icient and coste**ective a-dit that adds val-e to <o-r o#erations
"he *ollo5ing model #resents a *lo5chart o* o-r a##roach?
P#e'mna#y ,/(ne(( #(. A/&t *'an
*'annng a((e((ment&ee'"*m
ent
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ana'y)a' #e'an)e*#")e&/#e(
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Im*')at"n( "! a))"/ntng (tan&a#&(9.1 Im*')at"n( "! a))"/ntng (tan&a#&(
We have assessed the im#lications o* acco-nting standards and inter#retations that5ill im#act "o5n;s *inancial statements in the coming *inancial <ears. "he diagram/elo5 ill-strates the standards and inter#retations, 5hich have /een iss-ed /-t arenot <et e**ective, that ma< im#act "o5n in the #eriod o* initial a##lication. "hediagram sho5s that there are no acco-nting standards or inter#retations that 5illhave signi*icant im#act on "o5n d-ring the c-rrent re#orting #eriod.
"here are *-rther acco-nting standard and inter#retation changes, 5hich ma< haveim#lications *or "o5n moving into 2%1@1! and /e<ond, as #er the diagram.
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10Tmng
T)+et*
:0e
Pr e KPlanning
Planning
Pr eliminar <
A-diti
eld5or 8
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T*s8 In/)*t)e Res9ons):0e
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T)+e F.*+e P*.t;<)es=
0oc-ment method and develo#=re*ine March=A#ril 2%1) 7SMtest #rogram.
+ntrance meeting 5ith "o5n and 22 A#ril 2%1) 7SM#resentation o* APM to the A-dit and
"o5ninance Committee.
As #er a-dit #lanning stage /ased on 21 A#ril 2%1) to 7SMris8 assessment, *oc-sing on controls 29 A#ril 2%1)
"o5ntesting *or transaction c<clesconsidered to /e o* high ris8,5al8thro-gh on all maBor /-sinessc<cles and revie5 o* the 8e<reconciliation ro-tines.
Pr eliminar <
A-dit
Management6etter and=or #r eliminar
< a-dit * indi
ngs
0r a* t * inanc
ialstat
ement
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7SM iss-e the dra*t Preliminar< A-dit 3% A#ril 2%1) 7SMManagement 6etter and Preliminar<
"o5n A-dit indings to "o5n management*or comment.
"o5n ret-rns the dra*t Preliminar< ! Ma< 2%1) "o5n A-dit Management 6etter andPreliminar< A-dit indings 5ithcomments to 7SM.
7SM to iss-e Preliminar< A-dit & Ma< 2%1) 7SMindings to "o5n.
7SM #resent the Preliminar< A-dit Ma< 2%1) 7SMindings at the A-dit Committee.
"o5n s-/mits dra*t *inancial statement 3% Se#tem/er "o5nas #er 6ocal Government Act 2%1)deadlines.
To
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AUDIT
P UM
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T)+et*
:0e
inal
A-dit
ield5or8
inal A-ditManagement
6etter $i* a##lica/le'
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Iss-e dra*t Closing 7e#ort and 3% Se#tem/er 7SMManagement 7e#resentation 6etter to 2%1)
"o5n management *or comment.
"o5n ret-rns the dra*t Closing 7e#ort ! cto/er 2%1) "o5n
and Management 7e#resentation6etter 5ith comments to 7SM.
7SM to con*irm the *inal Closing & cto/er 2%1) 7SM7e#ort and Management7e#resentation 6etter.
TA
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T)+et*:0e
+it Mee
ting
inal
7e#or t
A-d
it 7e#
ort
T*s8
Iss-eClosing7e#or t andinalManagement7e#re
sentation6etter to"o5nand AC.
+itmeeting5ith"o5nincl-ding#resentation tothe A-ditandinanceCommittee.
Signinal Acco-ntsandtheManagement7e#resentat
ion6etter.
7SM
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to sig
n and iss-e th
e A-dit 7e#or t
to "o5n.
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In/)*t)e Res9ons):0e
T)+e F.*+e P*.t;<)es=
( cto/er 2%1) 7SM
1& Se#tem/er 7SM2%1)
"o5n
( cto/er 2%1) "o5n
12 cto/er 2%1) 7SM
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11 A**en&? A@ L"% #(.a#ea(
Ke; A/)t*:0e
A.e*
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Ke; Asso)*te/ R)s8s Ke; A/)t A99.o*
P.*se*n/
9*;+ent;0e
1 "rade andother#a<a/les
2 Accr-als
Inte.estBe*.)n6L)*:)0)t)es
T*7*t)on
• GS"
Cont)n6ent0)*:)0)t)es
In
cor r ect calc-la
tion o* accr -als
.
nder statement o* #a<a/les.
3
Classi
*ication/et5eenc-rrent
and non@c-rrent
4 6ia/ilities arenot#ro#erl</ro-ght toacco-nt.
5 "he
s#lit/et5eenc-rrentlia/ilitiesandnonc-rrent lia/ilitiesisinacc-rate.
6 ail-re to
com#l<5ith de/tcovenants.
7 GS"has not/een#ro#erl<calc-lated in
accordance 5ithGS"legislation.
8 Allcontingent lia/ilitiesare not#ro#erl<identi*iedand
disclosedin the*inancialstatements.
1
Per*
or ms-/stantivean
al<ticalrevie5.
7evi
e5 the calc-lat
ion o* mater ial
accr -al
s.
3
7evie5 s-/se:-ent #a<ments a*
ter <ear end.
4
Anal<se <ear
end int
er e
st/earinglia/ilit</ala
nces.
50et
er mine t
he cor r ects#lit
/et5een c-r r en
tand non
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c-r rent#or tion.
6
Anal<ticalrevie5todeter m
inethat*inancecosts
have
/een #r o#er l< /r o-gh
t to acco-nt.
7ev
ie5de/tcovenantsandtest*or
com#liance5herenecessar<.
8 /taincon*irmation *romlender at<ear tocon*irmthe/alances.
9 7evie5<ear endGS"reconciledto4ASstatement.
10
7evie5 thecontingentlia/ilities
list.
11
An
al<sis o* <ear
end contingen
t li
a/ilities in com#ar i
son 5ith #r ior
#er
iod/alances.
12 7evie5min-teso*meetings
thro-gho-tthe<ear toidenti*<-ndisclosedcontingent
lia/ilities.
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MEMORANDUM
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Ke; A/)t*:0e Ke; Asso)*te/ R)s8sA.e*
F)n*n)*0 • inancial statementsare not in accordancest*te+ent5ith 6ocal/)s0os.esGovernment Act 1(()and A-stralian Acco-ntingStandards.
Ke; A/)t A99.o*
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• Cond-ct o* revie5 and test o* detailsover signi*icant *inancial statementdisclos-res, s-ch as?
• *inancial instr-ment disclos-res
• commitments and contingencies
• /asis o* #re#aration and signi*icantacco-nting #olicies
• *inancial ris8 management
P*;.o00;0e
1 Wagesandsalaries
2 +m#lo<eeentitlement#rovisions
C*s ;0e
1 Cashand cashe:-ivalents
2 7estr ictedcash andcashe:-ivalen
ts
1+ist
enceo* em#lo<ee
s.2 Inc
om#leteorinacc-r ateem#lo<eerecords.
3
ver#a<
mentor-na-thor ised#a<ments.
4
nderstatement o* #rovisions.
5 Inacc-ratecalc-lation o* #rovisions.
6 7
econciliations arenot#re#ared ona
timel</asi
s.
7
7econciliationsar enotr evie5ed/<a##r o#riateo** icer.
8Mis
management
o* cash.
• Assess
thee**ectiveness o*internal
controlso#erati
ng5ithin#a<rollc<cle.
•
Per*orma5al8thro-gh on the8e<
managementcontrols overthe#a<rollc<cle.
• Assess
theade:-ac<o* #a<roll
ece#tion
re#orting andcontrols.
•
Per*orms-/stantiveanal<ticalrevie5.
• "est
ade:-ac<o*#rovision*or
em#lo<ee
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entitlements.
• Assess
thee**ectivenesso* internal
controlso#erating5ithincash
c<cle.
• Per*orm
5al8thro-gh over cashc<cle.
• Per*ormtest o*control on8e<
managementcontrols
over ca
sh c<cle
.
•
7evie5the
reconciliation*oran<long
o-tstandingor-n-s-alitems.
• /tain
/an8con*irmation as at<ear
end.
To
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T PLANNINGMEMORANDUM
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12 A**en&? ,@ A&&t"na' n!"#mat"n )"nta)t(
David Wall
RSM Bird Cameron
5th
Floor, RSM Bird Cameron Building
8 St Georges Terrace
Perth Western ustralia !"""
Tel# $!% 8 &'!% &(8)
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