Antler Ltd is a media services company. It has radio, television and magazine divisions and operates in
Question:
Antler Ltd is a media services company. It has radio, television and magazine divisions and operates in all states. Each division manager has a remuneration package that includes a base salary and short-term and long-term incentive payments based on a range of indicators. The CEO and other senior management also have remuneration packages with base salary and incentive payments, but the formulae used for each incentive payment varies. The following performance measures are used in the company’s balance scorecard measure of performance and calculation of incentive payments at various levels of management:
i. Net profit after tax (NPAT) performance
ii. Leadership and executive development
iii. Ratings performance for the television business
iv. Share of advertising revenue performance
v. Development and execution of business strategy
vi. Cost management across the group
vii. Divisional earnings before interest and tax (EBIT) performance
viii. Performance for launch of new shows in the television business
ix. Circulation performance for the newspaper executives
x. Cost management and delivery of cost targets.
Required
(a) Why is an auditor interested in the details of senior management salary calculations?
(b) At which level of management would you expect to see the above performance measures? What would their implications be (if any) for the audit of the financial report?
Step by Step Answer:
Auditing A Practical Approach
ISBN: 9780730382645
4th Edition
Authors: Robyn Moroney, Fiona Campbell, Jane Hamilton