The applicability of new process of auditor reporting can augment the qualitative characteristics of financial information and provide assistance at the when choices have to be made between reporting policies (Eilifsen et al. 2013). In addition to this, this enhancement of qualitative characteristics can help in indicating different qualities that different users essentially expect of accurate financial information that is provided to them. As per Statement of Accounting Concepts (SAC 3), the particular qualitative characteristic of “comparability” can be enhanced by delivering high quality financial information and the users of this information need to be able to determine and at the same time analyse similarities and variances, different nature as well as effects of business transactions and specific events at a point and over a specific period of time (Furnham and Gunter 2015). This can be done at the time of assessment of different aspects of single reporting entity that is Telstra Corporation Limited.
In addition to this, another qualitative characteristic as per SAC 3 is the materiality test. This is a test that refers to a particular test that is utilised for assessment of certain extent to which pertinent as well as reliable information might possibly be omitted or else improperly stated or else not divulged distinctively without having the potential to impact specific decisions regarding allocation of limited resources (Junior et al. 2014). Other than this, the use of new methods also need to enhance the qualitative characteristic of relevance that refers to quality of a particular financial information that exists at the time when the specific information impacts decisions by different users regarding resource allocation. As such, as per paragraph 5 of SAC 3, the relevance of financial information can be augmented by forming specific predictions as regards the outcomes during different periods such as the past, present or else future events (Auasb.gov.au 2017). Again, confirming or else correcting the foregoing analysis can also help in enhancement of qualitative nature of relevance. In addition to this, the preparers of financial reports of Telstra in order to enhance the qualitative characteristic of “relevance” need to have present value for assisting users in making as well as analysing decisions regarding allocation of limited resources (Knapp 2016). In case if the information is to help users in arriving at decisions regarding allocation of limited resources, then it needs to aid in making diverse predictions as regards future business circumstances of Telstra (Telstra.com.au 2017). Again, in a bid to obtain a predictive value, financial information has to be presented in a system of an explicit forecast.
In addition to this, SAC 3 also mentions about the qualitative characteristic of “reliability” that refers to the quality of financial information that exists at the time when information can be relied upon to reflect transactions or else events without the presence of bias or else preferences (Auasb.gov.au 2017). In addition to this, it can order to enhance qualitative characteristics, it is also important to improve understandability. The enhancement of this qualitative nature requires maintenance of quality of financial information that fundamentally exists at the when users of information are capable of comprehending the meaning (Knechel and Salterio 2016). For instance, as per Auditing Standard ASA 570, application of this standard ASA 570 can help in maintaining conformity with international standards and refers to principal accountabilities of the auditor in the process of an audit of different financial reports related to the going concern (Auasb.gov.au 2017). As a result of this, proper execution of the duties of the assessor can in turn help in enhancement of different qualitative characteristics of financial information. In addition to this, the regulations stipulated under ASA 700 helps in the formation of opinion as well as reporting on a financial report. As per this regulation requires placement of auditor opinion as to the first segment of the auditor’s report, a distinct paragraph on “basis of opinion”, improved description of accountabilities of the auditor, improved description of responsibilities of the management. Thus, the applicability of this section can result in enhancement of qualitative characteristics by augmentation of relevance and reliability of information. This ASA 700 also needs to maintain conformity with international standards and follow the guidelines of International Accounting Standard ISA 700 (Aasb.gov.au 2017). As per paragraph Aus 28.1, there is a necessity to detect different relevant ethical needs applicable within specifically Australia. According to Aus 46.1 of ISA 700, there is a necessity to name the engagement partner and identify relevant ethical requirements among many others (Aasb.gov.au 2017). Thus, the presentation of the clear presentation of important information, an opinion can thus help in the process of enhancing the understandability of financial reporting, reliability, the relevance that can assist in forming decisions based on corrected past analysis and established predictions (Prakash and Sivakumar 2014).
Aasb.gov.au, 2017. [online] Available at: https://www.aasb.gov.au/admin/file/content102/c3/SAC3_8-90_2001V.pdf [Accessed 5 May 2017].
Auasb.gov.au/, 2017. [online] Available at: https://www.auasb.gov.au/admin/file/content102/c3/ASA_570_2015.pdf [Accessed 5 May 2017].
Eilifsen, A., Messier, W.F., Glover, S.M. and Prawitt, D.F., 2013. Auditing and assurance services. McGraw-Hill.
Furnham, A. and Gunter, B., 2015. Corporate Assessment (Routledge Revivals): Auditing a Company's Personality. Routledge.
Junior, R.M., Best, P.J. and Cotter, J., 2014. Sustainability reporting and assurance: a historical analysis on a world-wide phenomenon. Journal of Business Ethics, 120(1), pp.1-11.
Knapp, M.C., 2016. Contemporary auditing. Nelson Education.
Knechel, W.R. and Salterio, S.E., 2016. Auditing: assurance and risk. Routledge.
Prakash, M. and Sivakumar, D., 2014. Information systems auditing and electronic commerce. International Journal of Advanced Research in Management and Social Sciences, 3(2), pp.106-119.
Telstra.com.au, 2017. [online] Available at: https://www.telstra.com.au/content/dam/tcom/about-us/investors/pdf-e/2016-Annual-Report.pdf [Accessed 5 May 2017]
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