(b) Taylor Co
Report to those charged with governance
Generally up to 1 mark for each matter identified and explained.

Revaluation of property portfolio
– Significant findings from audit should be reported to TCWG
– These include significant changes in accounting policy and material misstatements
– Revaluation of PPE should be consistent across a class of assets (IAS 16), four properties still carried at depreciated historic cost
– Four properties are material to SOFP (2·1% assets)
– Significant findings from audit also include significant difficulties encountered during audit such as information delays
– Delay makes audit less efficient and may result in increase in audit fee

Renovation of car parking facilities
– Taylor Co has derived economic benefits from expenditure, should be capitalised
– Material to SOFP (2·5% of assets)
– Incorrect application of IAS 16 and potential material misstatement should be included in report to TCWG as significant finding from audit
– Lack of authorisation indicates lack of management oversight and serious weakness in control which could allow fraud to occur
– Lack of integrity shown by management going ahead with renovation works without the necessary permission is an example of management override and could be the tone set throughout organisation
– Therefore this is a high risk matter and they may wish to implement controls and procedures to prevent further breaches
– Report to TCWG should include recommendations to management to reduce business risk

Long association of audit partner
– Matters to be communicated to TCWG include ethical issues in relation to auditor independence
– Long association creates familiarity and self-interest threats
– Audit partner in listed entity should be rotated at least every seven years per IESBA Code
– IESBA Code does, however, allow for an additional year if required rotation not possible due to unforeseen circumstances such as illness of intended engagement partner
– After current year, may still be possible for Bryony Robertson to continue as audit partner if engagement is subject to regular review by independent, external expert
– Safeguards should be applied including independent internal or external review of engagement (as per scenario)

Maximum marks 15