• Internal Code :
  • Subject Code : ACC3AUD
  • University : La Trobe University
  • Subject Name : Auditing and Assurance

Auditing Measures of Argent Minerals Limited

Executive Summary

The report on the auditing measures of Argent Minerals Limited (ASX code - ARD) has disclosed the major areas of risks and the factors that can affect the going concern concept of the company. The report also analyzes the impact of existence of ex-audit firm partners in the company at higher positions and how does it impact the quality of the financial report.

Table of Contents

Audit risk and Planning.

Key inherent risks.

Events or conditions that can affect the concept of going concern.

Accounts that could be at risk of material misstatements.

Corporate Governance Arrangements.

Ex-audit firm partners.



Audit Risk and Planning

Key inherent risks

Environment: Mining industry is one of the major industries that negatively affect the environment. The Australian regulators have made the policies stricter and increased the pressure through increasing mining royalties, carbon prices, taxes, license fees, etc. This has increased the risk to the overall industry substantially

Macroeconomic Disturbances: The Australian economy especially mineral industry is widely relied on the China and Chinese economy is going through slowdowns due to US-China trade war and other national reasons. Also considering the Corona Pandemic, the global economy is facing issues and so of Australia (Groomer and Murthy 2018).

Operating Cost and Balancing Productivity: when operating costs of a company increases, and then it is required to increase the efficiency and implementing cost cutting measures. Therefore, it is very important to maintain a balance between the increasing operating cost, efficiency in production and maintenance of quality.

Events or conditions that can affect the concept of going concern

The company has prepared its financial report on the basis of going concern for the financial year 2019 which contemplates the realization of settlement of liabilities in normal business course.

However, the company has recorded a loss of $ 3.5 million for FY 2019 and has and the company has a cash (and cash equivalents) pool of $ 725 thousand after using $ 2.0 million of cash in operations during the year for payments of evaluation and exploration. On September 9, 2019, ARD issued 58.95 million shares through which it accumulated funds of $ 1.289 million (before costs).

The company is debt free company and the major portion of its short term liabilities including trade payables and R&D claims are payable using the cash pools only (Adler et al. 2018). It is shown in the following table:


for the year ending




Trade & other payables


R&D claims repayable


Cash & cash equivalents


Therefore, it can be said that the company has no insolvency issues nor having major short term liquidity issues that can substantially affect the going concern of the company.

Accounts that could be at risk of material misstatements

The three accounts that appear to be doubtful and could be at risk of material misstatements are as follows:




Cash & cash equivalents



R&D claims repayable



Capital Account



  1. Cash account: the company is continuously issuing ordinary shares for cash and the cash pool is depleting, it has reduced by 56% YOY (Argent Minerals Ltd 2020).
  1. R&D claims repayable: This account constitutes around 87% of the overall liabilities of the company which was zero in 2018.
  1. Capital Account: The Company is issuing shares for a same amount of approx $ 1268000. Also, the Company is not having any authorized capital nor it is having any par value for the shares issued

Corporate Governance Arrangements

Control environment in a company includes the organizational structure, policies, standards and processes that can be for maintaining control in the entity. At ARD, the Board has shown commitment towards maintenance of highest Corporate Governance standards. Corporate Governance is a set of core behaviors and values that underpin the activities of the ARD organization and ensure high levels of transparency, protection of stakeholders’ interests and fair dealing. ARD continuously review the practices of corporate governance within the company against the Recommendations and Principles of Corporate Governance published by the Corporate Governance Council of ASX (Baldacchino et al. 2016).

Ex-Audit Firm Partners

There have been substantial reasons that the Corporation Act 2001, restricts a retired audit partner must not take on a senior role in an audit client for two years from retiring under sec 324 CI. The reason is that when a retired partner becomes a member of company’s audit committee, and then there are large independence issues with the audit committee itself.

These type of experts can substantially impact the quality of reports and disclosures made by the company because the current external auditors will possibly have larger trust on their former auditing partners due to prior engagement with their audit firms and with such trust, the Ex-audit firm partners can lead the current auditors to adjust audit procedures as per requirements (Senan and Sharma 2017).


The report on the auditing measures of Argent Minerals Limited has disclosed the 3 major areas of risks and the disclosed whether company’s the going concern concept is under some threat, it was found that company will continue to operate in future. The report also analyzes the impact of existence of ex-audit firm partners in the company at higher positions and how does it impact the quality of the financial report and it was found that such experts effects the independence of the external auditors and manipulates the true position of the company.


Adler, P., Falk, C., Friedler, S.A., Nix, T., Rybeck, G., Scheidegger, C., Smith, B. and Venkatasubramanian, S., 2018. Auditing black-box models for indirect influence. Knowledge and Information Systems54(1), pp.95-122.

Argent Minerals Ltd. 2020. Annual Report 2019. https://argentminerals.com.au/wp-content/uploads/2019/09/2019_Annual_Report.pdf

Baldacchino, P.J., Tabone, N., Agius, J. and Bezzina, F., 2016. Organizational culture, personnel characteristics and dysfunctional audit behavior. IUP Journal of Accounting Research & Audit Practices15(3), p.34.

Groomer, S.M. and Murthy, U.S., 2018. Continuous auditing of database applications: An embedded audit module approach. Continuous Auditing, pp.105-124.

Senan, N.A.M. and Sharma, R.B., 2017. Factors Affecting the Independence of External Auditors: A Study of Local Audit Firms in Saudi Arabia. International Journal of Economic Perspectives11(2).

Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Auditing and Assurance Assignment Help

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