Auditors Independence

This essay explores the corporate collapse of Harris-Scarfe on April 3 2001, which before their collapse was Australia’s third largest retail group (Buchanan 2004, p. 55). It will explore the collapse in the context of the auditing framework. In particular, how the financial indiscretions were not discovered by the auditors, which were going on as early as six years prior to the collapse (Buchanan 2004, p. 62). To start with, we define what the auditing objective is in order to work out where it failed in this case. ASA 200.11/ISA 200.11 defines the auditing objective as one that needs to ascertain reasonable assurance that the financial report as a whole is free from misstatement, whether due to error or fraud. In doing so the auditor can give an opinion of whether the financial report was prepared in accordance with the financial reporting framework (Gay & Simnett 2012, p. 12).

Professional behavior: A professional accountant should comply with relevant laws and regulations and should avoid any action that discredits the profession.

Perform all professional duties in accordance with applicable protocols and laws with high standards of ethical principles.

The audit will become a strong tool for feeding a continual improvement method and providing recognition for excellence in any organization. Eminent implementation of AN audit method needs managers to line positive expectations concerning however audits are going to be conducted, choose vital areas for audits, give positive communication concerning the aim of the audit findings, and involve individuals in following informed the audit findings. The audit ought to be seen as a way for distinctive each opportunities for improvement and areas of excellence that merit reward and recognition.

Auditor rotation has long been a subject of debate as a measure to prevent audit failures, especially after the financial crisis. Two types of rotation suggested are firm rotation and audit partner rotation. Mandatory auditor rotation limits the number of consecutive years that a registered public accounting firm or audit partner can serve as the auditor of a company, and is claimed to be able to enhance audit quality and reduce market concentration. The purpose of this paper is to identify, consider and evaluate the impacts of mandatory auditor rotation on audit quality and market competition and, accordingly, conclude whether mandatory

Auditing standards in UK and Ireland, including Ethical Standards, International Standards on Auditing and International Standard on Quality Control, are enacted for audits of financial statements. The content of these standards includes objectives for the auditor, requirements and application and other explanatory material.

S150 Professional Behaviour 150.1 Members comply with relevant laws & regulations and avoid any action or omission that they know or should know may discredit the profession. (APESB, 2013)

This report asks the author of this paper to answer to several questions pertaining to the demise of One.Tel in 2001. The author if asked to explain the role of external auditors in the collapse and how the expectations of shareholders and stakeholders likely figured into that collapse and the auditor malfeasance that led to the same. The author is asked to give two recommendations regarding the changing of the existing requirements for auditing standards as a means to close the audit expectation gap.

much information about auditing part. It is very critical to have a completely independent (from the

Abstract. The article reviewed was Role of Independence in Ethics for SMP Accountants. The key of the abstract is to emphasize the strength of ethics and moral behavior while conducting the audit (pp. 305-306).

The first section of this chapter provides an overview of auditing and the steps in the auditing process. The second section descdbes a methodology and set of techniques for evaluating

Since traditional agency conflicts are characteristic in large management operated corporations, the necessity of a statutory rotation is solely related to this group of companies. Shareholders in small and medium-size companies are to exert greater influence on the management than an average private shareholder in a public company. This dichotomy in auditing standards has recently been contemplated by the Ministry of Corporate Affairs in their regulation draft. Burton and Roberts (1967) present a fundamental approach to the economic impact of auditor changes. Although, considering the assistant role of an auditor in a stock corporation, a long-term contract between board and auditor seems sensible, the independence in appearance might be limited due to a special trust relationship between management and auditor in a long-term assignment. They suggest that personal relationships between auditor and management, the combination of auditing and consulting, as well as the auditor’s goal of maintaining the assignment are determining factors towards reducing audit quality.

An audit report is an opinion written by an auditor regarding the financial statements of an organization. The report is prepared using a format that is standard and generally accepted. However, there can be variations in the report; it only depends on the circumstances of the work and the engagement of the auditor (Asare & Wright pg. 198). An auditor 's opinion can either be a clean opinion, qualified opinion, adverse opinion or a disclaimer opinion. An honest opinion is given if the financial statements show a fair representation of an organization 's financial position. A qualified opinion is offered if there were any limiting factors imposed on the work of the auditor. An adverse opinion is delivered if there was a

In an effort to transform MSEL into a listed company, we should be able to ensure that the shareholders’ interests are protected. In the past, 85% of shares were owned by the directors, and they were highly motivated to work for the profitability of MSEL as the share was directly correlated with their remuneration. However, after joining the London Stock Exchange, the directors’ proportion of shares will inevitably decrease as a result of issuing new shares.

The lack of independence for external auditors will lead to the neglect of auditing risks (William R.K., 2003), which are the main reasons for the failure of certified accountants and professional accounting organizations. The consequence of the external auditors deprived of independence would be very serious. And there are many cases, which aroused by the failure of external auditors and most are related to the lack of independence. One famous example is the bankruptcy of Enron and the role played by its external auditor, Arthur Andersen (Todd, S., 2003). Arthur Andersen was once one of the biggest accounting companies in the world, and was canceled for the involvement in the Enron bankruptcy scandal.