Initial versus repeat audits

 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.