AUDIT TRANSPARENCY REPORT
CONNECT NATIONAL AUDIT PTY LTD
30 JUNE 2021
Connect National Audit Pty Ltd (‘Connect National Audit’) is dedicated to delivering high-quality audits to a range of public, private and not-for-profits organizations. This Transparency Report for the year to 30 June 2021 is a public statement to management, directors, audit committees, regulators, and investors of our commitment to provide quality assurance services. It is prepared in accordance with the requirements set out in Section 332 of the Corporations Act 2001. It explains how Connect National Audit is run and how we ensure that we perform audits of the highest quality.
Legal structure and ownership
Connect National Audit is responsible for the issue of this report.Our authorised audit company
is Connect National Audit Pty Ltd, which is owned by its shareholders. Audit services are conducted by the designated audit director and audit principals, all of whom have the required qualifications and registrations. All staff are employed by Connect National Audit. Connect National Audit is a CA ANZ firm, a Practice Entity Member of CA ANZ.
Governance
Connect National Audit is governed by a Board, which is made up of the director and audit principals of Connect National Audit. The Board meets regularly and its responsibilities include:
- Strategic planning and implementation
- Marketing
- Protecting and enhancing the brand
- Overseeing risk management and quality control
- Development and implementation of policies
- Management.
Audit quality
Setting the right tone at the top is a key responsibility of the directors of Connect National Audit, who are committed to maintaining a culture of honesty, integrity and quality. On every audit the assigned engagement director or audit principal is responsible for the achievement of quality outcomes. However, every individual on the audit team makes a difference with their professional judgement, skepticism and technical expertise.
Our audits are undertaken using the cloud-based, specialized audit software application, MyWorkpapers. Including a suite of electronic software programs, checklists, and audit work papers, and a document management system; the use of MyWorkpapers helps ensure our audits adopt a risk based approach tailored to meet the specific needs of the engagement, and are completed in accordance with Australian Auditing Standards.
For audits and reviews of public interest entities (including listed companies) an engagement quality control reviewer (EQCR) is appointed upon commencement of the engagement. The EQCR is independent of the engagement team and is required to complete and document their review of the audit file prior to issuance of the auditor’s report.
It is Connect National Audit’s policy to regularly engage an external commercial organisation that provides quality control services to perform a review of a sample of audit files for compliance with auditing standards and other professional and technical requirements. Any identified areas for improvement are communicated to all assurance professionals and incorporated into in-house training programs.
The Australian Securities and Investments Commission (“ASIC”) has the responsibility for oversight of auditors in Australia. ASIC monitors compliance with the requirements of the Corporations Act 2001 as it relates to auditor independence and audit quality. The Chartered Accountants Australia & New Zealand (“CA ANZ”) has a Quality Review Program to monitor whether its members have quality control policies and procedures in place to comply with professional standards and legal requirements.
CA ANZ last performed a review of Connect National Audit’s audit clients for the year ended 30 June 2021. We are not permitted to disclose detailed findings from external reviews and readers are advised that no assumptions regarding the scope of, or findings from, any of the inspections be made.
Independence
All personnel, including administrative staff, are required to sign a representation letter when hired (and annually thereafter) as to whether they have any conflicts of interests under APES 110: Code of Ethics for Professional Accountants and Part 2M.4 – Div 3 – ‘Auditor Independence’ of the Corporations Act 2001 with the audit clients of Connect National Audit (any relationships that may create a potential threat to independence are required to be documented on the confirmation). The most recent internal review and confirmation of our independence compliance was conducted in February 2021.
On each audit engagement, the engagement partner or audit principal considers relevant information about the client and evaluates the overall impact, if any, on independence requirements as part of the engagement acceptance and continuance decision.
On each audit engagement, all assurance professionals who are assigned to provide services as part of the engagement are required to confirm and document their independence of the audit client.
Our engagement director, audit principal and EQCR rotation procedures comply with the requirements of the Corporations Act 2001 and APES 110 Code of Ethics for Professional Accountants. For audits of listed companies, the engagement director and EQCR are rotated after five consecutive years of service. Following rotation these audit directors are not permitted to have any involvement in the audit engagement for a period of three years for periods beginning on or after 1 January 2019 and prior to 31 December 2023. Subsequent to the end of the transition period, the Engagement Partner will be subject to a five-year cooling-off period. To monitor compliance with these rotation procedures, a database is maintained that tracks audit director involvement on each listed company. The database is reviewed an ongoing basis.
Periodically, director and management review the adequacy and operation of the Connect National Audit’s independence policies and procedures for compliance with legal and professional standards. The Board confirms that the internal quality control system was functioning and effective during the year ended 30 June 2021.
Continuing professional education (CPE)
All partners, audit principles and qualified staff are required to keep up to date with the latest professional standards, including ethical and independence requirements. On an ongoing basis, the directors and management assess the audit team’s CPE needs and plan the team training after considering, among other things; CPE activities that interest each professional’s level of experience, client responsibilities, prior CPE training, new or emerging professional standards, and applicable legal and regulatory requirements. CPE includes presentations and webinars organised by external specialists, CA ANZ training courses, and in-house training sessions.
Graduates are provided with a range of learning opportunities, including on-the-job coaching from senior staff and experience-based learning. All assurance professionals are encouraged to complete the CA ANZ Chartered Accountants Program. We require all our assurance professionals to obtain a minimum of 20 hours of comprehensive audit and financial reporting learning and development per annum. Chartered Accountants are required to comply with the CPE requirements of Chartered Accountants Australia and New Zealand. Detailed CPE records are maintained for each professional staff member.
Financial information
Our authorised audit company is Connect National Audit. Revenue of this company is outlined below:
Year ended 30 June 2021 ($)
Audits of financial statements 1,624,727
Non-audit services nil
Director remuneration
The Connect National Audit director’s remuneration reflects the market value of the position and is assessed periodically, based on both earnings growth of Connect National Audit, as well as the director’s personal performance in such areas as quality of work, leadership and management of staff, organisation of client work flow and compliance with company policy and procedures.
Public interest entities
The following is a list of audits conducted by the authorised audit company, Connect National Audit for the year ended 30 June 2021. The list only includes audits of listed companies, listed registered schemes, authorised deposit- taking institutions within the meaning of the Banking Act 1959, and certain businesses regulated by APRA:
ASX
- Authorised Investment Fund Limited
- Boadicea Resources Ltd
- Broo Limited
- ECP Emerging Growth Limited
- Flagship Investments Limited
- Freehill Mining Limited
- Global Masters Fund Limited
- Reedy Lagoon Corporation Ltd
- TTA Holdings Limited
NSX
- Endless Solar Corporation Limited
- Consolidated Africa Ltd
- I-Global Holdings Ltd