Auditing Case Study Of Afterpay (The Giant Future Of Technology)
Auditing case study: Research based on critical analysis and evaluate the key audit matters in an independent Auditor’s report.
There is a need to understand the existence of the model and its importance in globalization. The basic purpose of the Auditing Standard ASA 701 contains the Communicating Key –Audit Matters in the Independent Auditor’s report. According to the current researches, the basic objective of this report is to represent the auditing standards related to the Australian ISA 701. This report illustrates an AUASB commitment that has a background based on auditor reporting placed by International Auditing and Assurance-Standards.
Due to the observatory factor of strategic direction given to the AUASB by the FRC(Finacial Reporting Council. The target is to cover up all the major issues related to the clear public interest focus and having the peak of quality.
Main Features of ASA701 (Board, 2015) (Board, 2015)
Audit standards are different from the ISA 701. The new report provides evidence based on the communication of key audit matters(KAM) in the independent auditor’s report. The main features of these reports are explained here.
- The standard is created so that other auditors of the other entities should take the KAM in their auditor’s reports.
- To make KAM, a mandatory standard for the audits of the listed entities.
- A determining factor of KAM:
Matters associated with those having been charged with the governance, also those matters that are specified in the analysis of the auditor’s attention.
Matters related should be included in the auditor’s report.
Matters regarding the higher risks, significant auditor judgments, having management judgments and specific events or transactions that are part of the audit section.
- Need to describe the individual KAM.
- Situations that are the determining factor regarding KAM, should not be part of in the auditor’s report and
- The details should be related to the audit documentation regarding KAM.
This report consists of various aspects of auditing standards, investors’ demands, and interests in audit reporting.
Industry selection and analyzing all the key audit matter’s in the independent auditor’s reports.
The report based on industry(AfterPay)
AfterPay (The giant future of technology) (AfterPay, 2019)
AfterPay is a huge company that opens the payment gateway for customers. Customers can easily pay for their purchases.AfterPay offers the best conversion rates, increases the average order value and decreases cart abandonment. It also reduces the factors like fraud or risk related to credit cards and other payment methods.
They have a tag of business such as “trust on AfterPay regarding payment security, fraud, and compliances”. This is a company based on technology-driven payments having goals to make purchases more reliable globally.
AfterPay get success in achieving 4.3 million active customers and near to 30,600 retail merchants on board.AfterPay Touch deals with the innovations of technologies as digital payments businesses having major exposure in telecommunications, health and retail sections in “Australia” and also overseas.
The company is named as AfterPay Touch Group Limited famous as APT.APT is the beginning of a payment company from Australia leading its gateway services are in the United States, United Kingdom, and New Zealand.
In 2017, AfterPay and Touchcorp take an initiative to merge as the global brand name to be AfterPay Touch Group. It then takes the shape of BNPL(buy now pay later).
Analysis of the AfterPay based on statics data
Here are some reflections on the analysis of AfterPay Limited.
Independent Auditor’s Report by AfterPay(Digital)
Here are some details of the Independent Auditor’s report of the AfterPay.
The Finacial report of the AfterPay Touch limited and its subsidiaries include all the major aspects of the statements of financial position, comprehensive income statement, changes in equity and cash flows are summarised. Assets, liabilities, equity, Income Statement, cash flows statement and statements of the changes in the equity of any company provides an overall audit version.
The report is following the Australian Auditing Standards. The report fulfils the auditor independence requirements of the corporation’s Act 2001. The great part of the report is based on Accounting Professional and ethical standards APES110 code.
Key Audit Matters is a company’s professional opinions and judgments related to the financial report of the current year. The requirements are fulfilled by the AfterPay.
In this report, deeply examine check out the assets and liabilities. The deep analysis of intangible assets is based on the knowledge of the industry and go through the procedure of acquisition agreements.
Complete access to the competence matters of the company and goals that a company needs to accomplish. Experts complete the analysis and give their opinion.
Analyze and assess the key parameters related to the assumptions and evaluation methodology used by the company to find out the external market trends that required the knowledge input of our specialists.
Financial Reports are generated in respect of the merger. All the factors like cash flow assumptions in the forecast period, discount rates, fund receivable by the customers and terminal growth rate and assumption factors.
The board of directors also takes part in the analysis of the reports keeping different aspects. The financial report is taken under the observations of them.. In the account of the directors, the audit team took the initiative to play with the core key factors of the company.
They access the risks that are the counterpart of the financial report, check out all fraud matters, audit the process regarding the risk matters and provide strong evidence for the appropriate tool to use. Our team of audit performs the analysis related to the accounting policies. They also concluded the countermeasures for the financial growth of the company, challenging aspects of the opinions and all the matters that are the concern of the company’s major progress. Directors generate the remuneration report based on the audit performed in accordance with the Australian Auditing Standards.
The key factors of the Report by AfterPay
Critical Analysis of AfterPay(“Audit Risk & Business Risk | Audit Planning | Examples | Differences”)
ASIC presents the complete analysis of the company.
The income generated by AfterPay through late fees is estimated to be 24.4% AfterPay is Whereas 75.6% generated from merchant fees. This situation is an alarming signal, as the condition of the financial stress and debt will gain. Another factor associated with AfterPay is that 95% of payments are not received.
While another factor that makes the terrible condition for the senior managers and board of directories to deal with is money laundering cases taken in June 2019. The company is in dialogue with the regulators and still the results are unknown.
AfterPay is encountered under the anti-money laundering and counter-terrorism financing law, but plays a good part in the inventor’s view.AfterPay shares closed at $36.According to the analysis of the Goldman AfterPayplay a game of substantial runaway growth.AfterPay get success in gaining $1 trillion opportunities across Australia, the US, and the UK and achieving the merchandise volume. The sales generated by the retailer customers reached to be $29.2 billion till the year 2020 having just a profit margin under 2.2 %. The three co-founders of the companies sold more than $100 million of shares and take the growth of the company raised to $300 million in equity. (Chau)
Challenges Faced by AfterPay
The problem or the challenges that make the AfterPay in fighting mode is to meet up the market rends and double its return on capital.
The company is trying its best to attract global market brands.10 % of AfterPay’s US and the UK earnings flows from the shareholder Matrix group and business Clearpay.In the US and UK, the competitors of the landscape are more challenging for the AfterPay.AfterPay needs to beat the two visa entering companies in the US. Local “ Group Affirm” and “Swedish Challenger Klarna” are the two massive threats for AfterPay.
Identifying problems in modern organizations
Major problems that most of modern organizations faced are discussed.
- Fail to go through the follow-up
- Reportable issues regarding the major terms of financial and audit statements also called watering down factors.
- Fail to report the internal Audit.
- Scope Limitations.
- Having no proper management planning regarding to risk areas.
- Not aware of market trends and technology aspects.
- Business risk factors like loss of customers, cash flow problems, political and economic instability and overtrading.
Some of the key factors based on the customer’s view of the AfterPay
Some Highlights of AfterPay 2019
- Run-rate increases to be $7.2 billion. Global sales increased to be 140% to $5.2 billion.
- 12,500 new customers per day are on the board of AfterPay.
- Major US and UK brands are on the platform of AfterPay.
- In US-based sales, the run rate is estimated to be $1.7 billion.
- In the first 15 weeks, over 200,000 UK customers on-boarded on the platform of AfterPay.
The companies should apply financial innovations to improve the productivity and growth of the company. Innovation is the key ingredient to boost your audit.
Applying techniques to improve the financial rate of the company
(“Five Ways Smart Companies Maintain Growth and Profitability | Explore Our Thinking | Plante Moran”)
- Alian Sales and Marketing
- Expand the services
- Focus on the relationship-building factor regarding customers.
- Elevate the name of your brand
- Know well to deal with the severe conditions
- Manage customer acquisition costs.
- Encourage innovations in your business.
- Conduct a financial test.
- The balance sheet needs to be maintained.
Audit trends that need to workout
The organizations should learn to deliver the risk anticipation, have assurance and advice that can help the stakeholders need technological aspects. This is the best approach to get the goals of an internal audit.
Internal audit groups must find a strategy to implement the concepts of innovations. To bring innovation in the present structure of the organization is not easy.
Playing FACTOR innovation
Innovation is the key to make your business approach the rising star of the market. Many audit innovations can do the job easy. The internal audit can be improved by integrating the organization’s reports.By following the iterative, incremental and independent approach in the internal audit,the business growth will take it’s lead. By introducing new services, through the audit process will help the organization to meetup the customers or purchasers demands. Appy a framework that will help to increase the productivity of your business.
Some Key Features
- Improve productivity in your services.
- Less charges are more good to play.
- Go for new relationship-building like new partnerships and relationships.
- Work on the enhancement of profitability.
Businesses that fail to innovate run the risk of:
- The market place is the need of every business,losing marketplace share to competitors
- Less attraction in productivity.
- Lack of skills in the workforce.
- Planning strategies are not working.
All the risk factors in the business growth can easily be managed by the risk audit.By creating supportive surroundings and working together under the shade of the audit team and directors,an excellent scheme can be generated that counts as a great success measure.The team should be creted that can bring innovation in the present system of the audit and makes new planning.New ideas should be taken by the individual employee,this can also help to find new but more magical working play.
- There are some of the approaches you can fund your boom through innovation, either by means of using your very own funds or tapping into external investment inclusive of loans or equity finance.
- But, any direction to external investment will need a remarkable marketing strategy that describes your commercial enterprise and sets out specific forecasts of where it is going.
- Groups regularly flip to their banks for a line of credit score or loans for extra finance, depending on their borrowing needs.
- In case you’re inclined to relinquish a few manage of your business to outside buyers, you may consider using fairness finance. the 2 major routes for this are investment from enterprise angels and assignment capital corporations:
- All the companies in business should try to put the money into non-public organizations. organizations, generally from $30,000 to $500,000.
Go for those companies that can help you to bring the capital with better fundings.
Basic Methods of Audit that can help to improve the business
- Follow the inquiry process.
- Deeply observe the system.
- Do an inspection of evidence.
- Follow the CAAT method.
More innovative audit techniques
- To work with the strength of the future follow the Agile Internal Audit technique.
- By following the analysis of the continuous risk apply Integrated Assurance.
- Following the best way of automating assurance Evaluating Culture
- Robotic process dealing use GDPR assurance and advice.
- Security issues need Cyber Audit.
Tools the best play to Audit
- Policies based standards are usually called Compliance Audit.
- Financial statements make work easy to perform Financial audits.
- To make sure about the security, the Investigative Audit tool is used.
- Software development is the part that needs to follow the Information System Audit.
- The detailed analysis of the goals are the major contributor factor in the success, so Operational Audit tools are used.