Audit and Assurance.

Added on - 21 Sep 2019

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AUDIT AND ASSURANCEAudit and Assurance[DATE]HEWLETT-PACKARD[Company address]
EXECUTIVE SUMMARYWith the changes in economic condition, ramified corporate growth, each and everyorganization needs to implement the audit and assurance services to strengthen the corporatetransparency and true and fair view of assets and liabilities. Every key person that isinterested in any organisation’s information gets it through the help of the annual report.However, to set a trust on the truthfulness, an external body named as auditor provides anunbiased opinion on those annual reports. The way any substandard audit report affects thekey stakeholders of any entity are also mentioned. Several risks to the wealth and security ofthe key stakeholders are probed when the audit is not done at par. The report under study isbased on the research of the Enron scandal and has set out the lessons that the auditors wholeover the world could learn. The main learning stood to be the need of any auditor firm to beindependent from its client. Further, the report digs out the requirements of regular rotation ofthe auditor firms to make the quality of audit turn supreme.
Table of ContentsEXECUTIVE SUMMARY...................................................................................................................1INTRODUCTION.................................................................................................................................3Answer to question no-1........................................................................................................................3Answer to question no-2........................................................................................................................4Answer to question no-3........................................................................................................................5Answer to question no-4........................................................................................................................7Conclusion.............................................................................................................................................9REFERENCES....................................................................................................................................10
INTRODUCTIONThe key people who are highly interested in the performance of any publically listedcompany are altogether termed under the umbrella concept of key stakeholders. As theidentity of an organisation is different from the board, there is a difficulty faced by these keystakeholders in relying the performance and position presented through the organisation’sfinancial books. To ensure that whatever the books of accounts of any entity reflect is trueand fulfil the utmost requirements of fairness, there is a need of an unbiased and headstrongprofessional. Here, the name of Auditor pops in the picture.The act of whistleblowing hasbeen stated as ethical if the same done in interest of the public. Not only could the employeesof any organisation, but the auditors also act as whistle-blowers. Moreover, the warning thatSEC’s chairman Greg Medcraft had given to all the audit firms have also been analysed. Thesame has brought the different things that the auditors need to ensure to prevent the warningfrom shaping real news.The current report is based upon the idea of the consequences thatmay hit an organisation if the auditor isn’t diligent in his work and performs the auditfunction in a sub-standardised manner. The concepts of the auditor’s independence andwhistleblowing are also thrown a light upon. Later in the report the scenario that happened atthe time of Enron’s scandal is discussed. The main focus for the discussion had been tohighlight the things that auditor can grab to improve future performance. The term Auditquality is also made a point of thought while making the analysis of warning statementforwarded by Greg Medcraft on auditor’s function and Enron’s failure.Answer to question no-1.As already discussed in the introduction section, the key stakeholders rely upon thefinancial statements only because a headstrong professional, namely the auditor has reviewedthem. There is a tied expectation to the function. It is expected that the auditor has performedaudit completely in a manner that has identified all the misstatements material to everystakeholder. And any misstatements if identified have been completely resolved. But at timesthe audit performs audit ignorantly. This affects all the stakeholders including the auditor(Brasel, Doxey, Grenier, & Reffett, 2016). There are several stakeholders of the companywho directly and indirectly get affected and affects the business organization of company.The affects and risk that are attached to the key stakeholders are listed below and described ineffective manner.
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