Roles and responsibilities of auditors, CEO, directors

1697 WordsJan 31, 20157 Pages
Auditing and Assurance – Assignment 1 Ashley Erasmus With reference to Caltex Australia 2012 Annual Report discuss the following: The role and responsibilities of Auditors and Company Board of Directors and the CEO and Senior Management with respect to the Accounting information reported on in the Annual report. The roles and responsibilities of a Board of Directors vary according to the nature of the company. They are usually responsible for determining the strategic direction of the business as well as handling the important operational and governance matters such as setting company policy and recruiting and monitoring the Chief Executive Officer. According to the 2012 annual report for Caltex Australia, the Board appoints the…show more content…
Since it is essential that auditors remain unbiased and independent, companies often minimize their non-audit dealings with the external auditors as it may impair auditor independence (DeFond, Raghunandan, & Subramanyam, 2002). In 2012, KPMG performed other non-audit services for the company in addition to its auditing role. These services included transaction, taxation and other assurance services with a total charge of $389,600 (Caltex, 2012). This is a significant figure that could lead users and regulators to question the complete independence of KPMG in respect to Caltex. As a result, Caltex’s audit committee made an effort to review the dealings between the companies and justify why they were satisfied that KPMG was still an independent service, free from any self-interest in accordance with the auditor independence requirements of the Corporations Act (Caltex, 2012). The Committee advised the Board that the provision of these non-audit services was consistent with both the Board’s established policy as well as statutory law and that the provision of the services did not impair the impartial and objective judgement of KPMG as external auditor (Caltex, 2012). - The Audit reports provided in the Annual report and what information do they convey. The external auditors of Caltex
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