Auditor gains knowledge and experience about the probability
of misstatement after auditing a company for several years. Therefore, most auditors set a high inherent risk in the first year of an audit and reduce it in the later years. Based on the annual report of the company it is noted that the audit is performed in end of the year which was for end of the year 2018. The audit has been performed based on the standards which has been set by AASB and IFRS, the auditor has described in detail the key audit aspects which are related to the goodwill & intangibles and inventory valuation. Hence, the risk associated with the initial vs repeat audits is moderate as the company has complied with the necessary laws and regulations. Because of audit quality the auditor rotation is to promote auditor independence. Auditor rotation played a significant role in the audit of listed companies or listed registered schemes. Quantity of non-routine transactions When recording transactions that occur infrequently, the client may not have sufficient and adequate experience to record them correctly. The client is more likely to make mistake(s) due to a lack of relevant experience. It is logical for the auditor to estimate a high inherent risk in this situation. The annual report of the company has clearly stated that all the transactions are being made in adherence to the accounting standards. The management has stated the individual risk limits which is mainly based on the internal risk and external ratings which is accordance to the limit stated by the board, the management also stated that the compliance is made in accordance with the credit limits by the customers, According to this accounting standards Non-routine transactions inherently risky. Quantity of non-routine transactions One-off items in FY2018 The Group completed the purchase of Bega Foods business on 4 July 2017, which incurred a number of one-off transaction costs (including stamp duty and other costs) totalling $12.9 million before tax in FY2018. On 17 August the Group acquired the Koroit dairy manufacturing facility from Saputo for $250.0 million, which incurred a number of one-off transaction costs totalling $0.8 million before tax prior to the end of FY2018, with further transaction costs to be incurred inFY2019, including transitional costs, stamp duty, legal and advisory fees and other costs. One-off items in FY2017 The Group incurred legal, financial and corporate advice and transaction costs relating to the acquisition of the Mondelēz Grocery Business totalling $11.5 million before tax. On 24 April 2017 the Group completed the sale of infant nutritional assets to Mead Johnson and formed the MJN Alliance, which resulted in a material capital gain of $177.8 million after transaction costs and before tax.