Question

How has JB HI FI handled Covid-19?

The impacts may be caused by Covid-19 at JB HI FI which can be negative or positive?

Any additional procedures that should be implemented in our audit planning ?

What additional disclosures should include in an auditor opinion?

- what is it necessary to have these additional disclosures

Answer 1

COVID-19 impacts

How we're taking care of customers and team members

Providing a safe environment for our customers and store team members will always be our highest priority at JB Hi-Fi. We also want to do our best during this challenging period to allow our customers to access service, advice and product when they need it. Below you’ll find some information about how we’re managing things in a rapidly and frequently changing environment. We’ll share new information on this page as it comes to hand.

Store trading hours

JB stores are open and our teams are ready to help, however, our trading hours are a little bit different than usual, and few of our CBD stores are temporarily closed.

Temporary store closures

Our CBD stores aren’t as busy as they usually are, so we have temporarily closed a few stores. To get up to date information on open and closed stores see our Store finder.

Store cleaning and hygiene

We have expanded our cleaning routines across our stores, including increased cleaning throughout the day.

Our teams have had additional training on maintaining good hygiene practices. To support this, stores may be operating a little differently than usual.

Store capacity management

We are restricting the number of people (staff and customers) allowed in each store at any given time. All stores will allow a maximum of 100 people at any time, dependant on size. This means larger stores will fall well within and smaller stores will meet the Government recommendations on social distancing.

Queue management at registers

We ask our customers to observe Government recommendations on social distancing whilst waiting in the checkout queues. Please observe a minimum distance of 1.5 metres between customers. We have placed guides within store checkout lanes to help you with this.

Payment options

Payment via debit, credit or approved finance cards, as well as JB Hi-Fi Gift Cards through our payment terminals is the preferred way to make payment in our stores. However, we will still be accepting cash if that is the only way you can make payment.

Click & Collect

We have implemented social distancing practices for Click & Collect orders to allow you to sign for your order safely. You can choose to:

• Bring your own pen to sign for your order in-store, or
• Use the store pen followed by the supplied hand sanitiser, or
• Have our team member sign on your behalf.

Valid ID will still need to be supplied by all customers.

Team readiness and support

We have requested any team member feeling unwell to remain at home. We also encourage our customers who are feeling unwell to also remain at home. We have our teams prepared to respond to any health and safety issues should they arise.

Safe delivery practices

There is currently no impact to our delivery services, however, the safety of our customers and team members, including delivery drivers, is our number one priority.

We have implemented the following so we can continue safely delivering your products:

• Delivery drivers are practising social distancing when goods are loaded.
• Additional hygiene practices have been implemented with emphasis on hand hygiene. All crews carry sanitiser and wipes with their vehicles.
• Delivery crews practice social distancing when performing delivery services, ensuring a minimum 1.5 metre separation from customers.
• We can also arrange no-touch deliveries which will involve delivery of goods to a secure location on your premises – with no unboxing or removal of old product.

Shop online

You may prefer to shop online and use the convenience of our various delivery and Click & Collect options.

We’d like to thank our customers and teams for their patience and understanding as we work through this challenging period.

2.additional procedures that should be implemented in our audit planning

1. Research the Audit Area

It is essential to understand the business process or function to be audited. If not familiar with it, thoroughly research the process or function to fully understand the subject matter. Review internal procedures, search the internet for resources, and seek help from subject matter experts.

2. Maintain Open Communications Throughout the Planning Process

The sooner the audit team reaches out to the auditee, the better. There is a certain amount of trepidation involved in any audit. Working with an auditee prior to the audit helps ease concerns the auditee may have. Communicating in person is always preferable. If this is not possible, telephone calls are the next best thing. Avoid communicating by email if possible.

3. Conduct Process Walk-Throughs

Armed with a working understanding of the process or function, conduct a face-to-face walk through with the auditee. Identify key business objectives, methods employed to meet objectives, and applicable rules or regulations. A walkthrough may include a tour of facilities. You may gather background information relative to the nature, purpose, volume, size, or complexity of automated systems, processes, or organizational structure. You might scan documents or records for general condition. All these activities provide opportunities to interface with the auditee and build rapport before the formal entrance conference.

4. Map Risks to the Organization, Process, or Function

Ask the auditee what his concerns are, what "keeps him up at night." Through research and interviews, identify risks to meeting business objectives and controls employed to mitigate those risks. Rate risks with the auditee based on probability of occurrence and potential impact. Consider control design, gaps, or mitigating factors to determine if the control system effectively mitigates risks.

5. Obtain Data Prior to Fieldwork

This has become a principal focus for us recently. We emphasize data in our initial requests for information. We perform data analytics before we begin field work. Identifying anomalies to confirm a condition or weakness early helps us target testing and optimize sample selections.

Results of Improved Audit Planning

Our emphasis on audit planning has yielded worthwhile results. And I will say improving audit planning has been an investment. :

• Improved credibility and relationships with our stakeholders
• More in-depth and significant issues
• An increased number of process improvements
• Reduced field work time

Audit planning is the audit phase in which we can best influence audit results. It is a key but too easily overlooked component of the audit process. It is something that needs to be emphasized and institutionalized into a habit. This habit ultimately leads to audit success.

3.additional disclosures should include in an auditor opinion

Disclosures in financial statements

Auditors are required to express an opinion on the financial statements as a whole. This includes the notes to the financial statements which are an integral part of the accounts, providing additional information on balances and transactions and other relevant information. Therefore, it is important that during all stages of the audit the auditor gives appropriate consideration to, and plans to obtain sufficient and appropriate audit evidence in relation to the disclosures made in the notes to the financial statements.

ISA 200, Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with International Standards on Auditing specifies that the financial statements include related notes which ‘comprise a summary of the significant accounting policies and other explanatory information’.

The notes to financial statements contain different types of information, some quantitative and some qualitative, as required by IFRS. Some examples are given below:

Quantitative disclosures:

• Disaggregation and analysis of balances and transactions included in the financial statements, for example of property, plant and equipment, intangible assets, provisions, lease obligations, financial instruments.
• Segmental analysis of revenue, profit and certain other items, and information about major customers (for listed companies).
• Summarised financial information in relation to associates and joint ventures.

Qualitative disclosures:

• Descriptions of significant accounting policies and areas where critical accounting judgement has been exercised, and rationale for any changes in accounting policies.
• Confirmation that the going concern assumption is appropriate, or discussion of significant doubt over going concern.
• Information on related parties, and related party transactions.
• Explanation of impairment losses recognised in the year.
• Discussion of areas of risk, for example those relating to financial instruments.

4 )Disclosures are Importatnt

Purpose of Disclosures

While a company’s financial statements contain all the relevant financial data about the company, that data is often in need of further explanation. That is where the disclosures on the financial statement come into play.

A financial statement disclosure will communicate relevant information not captured in the statement itself to a company’s stakeholders. The disclosures can be required by generally accepted accounting principles or voluntary per management decisions.

What Is Disclosed: Materiality and Impact

All relevant information must be disclosed. “Relevant” means any context that may impact a financial statement’s reliability. This may include information about accounting methods, dependencies, or changes in amounts or estimates.

Types of Financial Disclosures

Accounting Changes

If a company makes a significant change to their accounting policies, such as a change in inventory valuation, depreciation methods, or application of GAAP, they must disclose it. Such disclosures alert the financial statement’s users as to why the company’s financial information may suddenly look different.

Accounting Errors

Accounting errors can result for a variety of reasons including transposition, mathematical computation, and incorrect application of GAAP or failing to revalue assets using fair market value. When an error is discovered, it must be corrected. This often means correcting prior period financial statements. This information must be noted in the disclosure. Keep in mind, significant accounting errors can result in financial audits and possible bankruptcy by the company.

Asset Retirement

Companies retire assets once the asset provides no future benefits to the company. The procedure for retiring an asset requires the company to obtain both a fair market value and salvage value for the asset. Usually, the difference between the sale price and the asset’s salvage value results in a net loss. The net loss is then included on the company’s income statement, which is then explained via a disclosure.

Insurance Contract Modifications

Insurance contract modifications affect a company’s balance sheet. Since companies use the balance sheet to determine the total economic value added by their company’s operations. A financial disclosure is necessary to explain why the insurance contract was modified and what current or future implications may occur. Examples of insurance contracts include the business owner’s life insurance policy or the general liability insurance for business operations.

Other items

Other items requiring disclosure are noteworthy events and transactions. These events are infrequent but made a significant impact on the current financial period.

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