Our audit approach An audit is designed to provide reasonable assurance about whether the financial report is free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report. We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial report as a whole, taking into account the geographic and management structure of the Group, its accounting processes and controls and the industry in which it operates. Materiality Audit scope Key audit matters For the purpose of our audit we used Our audit focused on Amongst other relevant overall Group materiality of $2.3 where the Group made topics, we communicated million, which represents subjective judgements; the following key audit approximately 5% of the Group’s profit for example, significant matters to the Audit, before tax, adjusted for individually accounting estimates Finance and Risk material items separately disclosed as involving assumptions Committee: restructuring and store exit costs, and inherently Impairment of onerous lease expense and impairment uncertain future events. of assets. intangible assets The Group is principally Accounting We applied this threshold, together involved in retailing estimates and with qualitative considerations, to through Department disclosures determine the scope of our audit and Stores across Australia relating to the nature, timing and extent of our and online. The strategic decisions audit procedures and to evaluate the accounting processes Inventory valuation effect of misstatements on the financial are structured around a and provisions report as a whole. Group corporate We chose Group profit before tax and finance function at the Supplier rebates individually material items separately Group’s support office Refinancing and debt in Melbourne. disclosed because, in our view, it is the covenants metric against which the performance Our audit procedures They are further described of the Group is most commonly were mostly performed in the Key audit matters measured by users. at the Group support section of our report. We adjusted for individually material office, along with visits items as they are unusual or to the Melbourne Distribution Centre and infrequently occurring items impacting three Department profit and loss. Stores across Australia We utilised a 5% threshold based on to perform audit procedures over our professional judgement, noting it is within the range of commonly inventory. acceptable thresholds. 88 Myer Annual Report 2018