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The report aims at gathering relevant information about A2B Australia Ltd and prepares a report that can be referenced by the senior auditors of the firm. The report will identify the main areas of operations of the company. An analysis will be conducted to determine the ability of the company to continue as a going concern. The report will also analyze the acquisition of Gold Coast Cabs by A2B and its possible impacts on the audit plan.
Table of Contents
A2B Australia Ltd: Areas of operations.
Events or conditions that may cast significant doubt on the A2B’s ability to continue as a going concern
Accounts that could be at risk of material misstatements.
Appropriate base and set planning materiality.
Acquisition of Gold Coast Cabs.
A2B Australia Ltd (ASX: A2B) which was formerly known as Cabcharge Australia is an Australian listed company and a component of ASX 200. A2B was founded in 1976, the company developed Cabcharge system which is an account payment gateway that was aimed at providing non-cash taxi fares. In current period A2B is the sole provider of similar but sophisticated systems for the taxi services.
Basically A2B Australia Limited is involved in the development of specialized software solutions in the form of communication platforms and payment solutions for the transportation industry. A2B serves top transportation brands like 13cabs, EFT Solutions, Mobile Technologies International and Cabcharge. The company provides class leading technology to 96 percent of the fleet of 22,000 Taxis in Australia. It also serves to Taxis in more than fifty cities of North America, New Zealand and Europe. The 13cabs Taxi network of the company is considered to be the largest network in Australia that supports 40,000 drivers and 10,000 vehicles.
The company is engaged in the transport industry and Covid 19 pandemic is the most important and biggest factor as the overall transport sector and their operational activities of got stopped which directly impacted the business of the company. Apart from that, there are high possibilities that the overall Australian economy might go under recession.
The material accounts that have been selected from AA’s Balance Sheet and from the Income Statement are:-
Interest Bearing Liabilities
The materiality threshold is defined as a percentage of that base. The most commonly used base in auditing is net income (earnings / profits). Most commonly percentages are in the range of 5 – 10 percent
The audit plan requires additional due diligence as it may miss important issues, especially when it is conducted in a competitive environment in which the acquiring company has only a few days to access financial records and key personnel.
Thus, it is possible for the buyer to overlook fraudulent financial reporting and material weaknesses in internal control. An audit of the post-acquisition due diligence process can help compensate for such risks by providing early identification of unmet initial business plan goals which may allow the acquiring company to take corrective action before substantial losses are incurred.
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Dhaliwal, D., Michas, P.N., Naiker, V. and Sharma, D., 2020. Greater Reliance on Major Customers and Auditor Going‐Concern Opinions. Contemporary Accounting Research, 37(1), pp.160-188.
Feldstein, M.J., Low, S.L., Chen, A.F., Woodward, L.A. and Hozack, W.J., 2017. A comparison of two dosing regimens of ASA following total hip and knee arthroplasties. The Journal of arthroplasty, 32(9), pp.S157-S161.
Lu, M., Simnett, R. and Zhou, S., 2019. Using the Same Provider for Financial Statement Audit and Assurance of Extended External Reports: Choices and Consequences. Available at SSRN 3361616.
Saputra, I.G. and Yusuf, A., 2019. The Role of Internal Audit in Corporate Governance and Contribution to Determine Audit Fees for External Audits. Journal of Finance, 7(1), pp.1-5.
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