Arab Open University

Tutor Marked Assignment (TMA) – PT3 Form

ACC302

Question No.1

PWC, the external Auditor of ARAMCO objectives are to obtain reasonable assurance about
whether the consolidated financial statements are free from material misstatement, whether due
to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance but is not a guarantee that an audit conducted in accordance with
International Standards on Auditing, that are endorsed in the Kingdom of Saudi Arabia, will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken based on these consolidated
financial statements. (Aramco, 2021)

Question No.2

The audit committee’s work focus on the comprehensive review of the first quarter report, the
first half year report and the report on the first nine months together with the CFO and the
auditor before the respective dates of publication, also the preliminary examination of the annual
financial statements and the consolidated financial statements for 2015, including the combined
Management Report of Adidas AG and the Group, as well as the Executive Board’s proposal
regarding the appropriation of retained earnings.
The Audit committee prepares the Supervisory Board’s proposal to the Annual General Meeting
concerning the selecting of the auditor of the annual financial statements and the consolidated
financial statements for financial year and for the quarterly financial statements and interim
management reports for the financial year and the first quarter of the next financial year.
Furthermore, the Audit committee dealt with the monitoring of the effectiveness of the risk
management system, the compliance management system, the internal control system and the
internal audit system. Moreover, the committee addressed the findings of internal Audit and the
audit plan. Every two years, the Supervisory Board and the Audit Committee examine the
efficiency of their work by means of questionnaires and individual interviews (Nicholas J Price,
2019) Audit Committee report which outcomes of internal control activities and periodic reports
on supervisory activities (Aramco, 2021)

Question No.3

PWC auditors are responsible for identifying and assessing the risk of material misstatement.
audit procedures are determined based on the auditors’ assessment of the risks of material
misstatement (inherent and control) of various assertions about account balances, transactions,
and disclosures. It is important for the auditors to design substantive procedure that are clearly
focused on and linked to the risks.
As part of designing their audit, they determined materiality and assessed the risks of material
misstatement in the consolidated financial statements. So, they considered where the Board of
Directors made subjective judgments; and addressed the risk of management override of internal
controls, including among other matters, consideration of whether there was evidence of bias that
represented a risk of material misstatement due to fraud. (Aramco, 2021)

Question No.4

2021: PWC agreed with those charged with governance that we would report to them
misstatements identified during our audit above SAR 1.9 billion. Their opinion on the
consolidated financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon. In connection with our audit of the consolidated financial
statements, our responsibility is to read the other information identified above and, in doing so,
consider whether the other information is materially inconsistent with the consolidated financial
statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated (Aramco, 2021)

2020: From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the consolidated financial statements of the
current period and are therefore the key audit matters. We describe these matters in our auditor’s
report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to outweigh
the public interest benefits of such communication, They agreed with those charged with
governance that we would report to them misstatements identified during our audit above SAR
1.1 billion (Aramco, 2020)

All in all, the consolidated financial statements for both fiscal years 2021 and 2020 were present
fairly, in all material respects, the consolidated financial position of Saudi Arabian Oil Company
(the “Company”) and its subsidiaries.