Audit, Assurance and Compliance

Running head: AUDIT, ASSURANCE AND COMPLIANCE
Audit, Assurance and Compliance
Name of the Student
Name of the University
Author’s Note

1AUDIT, ASSURANCE AND COMPLIANCE
Executive Summary
The findings of the report shows that the key stakeholders of Telstra Corporation will be
affected in case material misstatements are not identified, disclosed and adjusted. In
addition, the principles of auditor independence put the obligation on the auditors to
provide the audit opinion in the absence of any conflict of interest and biasness. After that,
the outcome of the report also shows the major lessons obtained from the collapse of Enron
scandal like the compliance with the global auditing standards, internal auditing and others.
The last part shows the responsibility of the auditors to comply with the regulations and
standards of auditing.

2AUDIT, ASSURANCE AND COMPLIANCE
Table of Contents
Introduction............................................................................................................................. 3
Impact of Material Misstatements on the Key Stakeholders of Telstra...................................3
Auditor Independence and Whistleblowing.............................................................................5
Lessons from Enron Scandal and Arthur Andersons’s Behaviours...........................................6
Audit Quality and Required Steps by the Auditors...................................................................9
Conclusion.............................................................................................................................. 12
References..............................................................................................................................14

3AUDIT, ASSURANCE AND COMPLIANCE
Introduction
Auditing can be considered as a systematic as well as independent inspection and
examination of the accounting books, accounts, statutory records, financial documents and
vouchers of the companies with the aim to find any kind of material misstatements in those
accounting books (Louwers et al. 2015). At the same time, it is the responsibility of the
auditors to ensure the fact that the financial statements of the companies have been
prepared and presented in the true and fair manner. Improper identification, disclosure and
adjustment of the material misstatements in the financial statements can lead to the loose
of faith of the company’s key stakeholders due to the fact that they consider the data and
information of the financial statements at the time of different investment decision-making
(Knechel and Salterio 2016). Hence, the auditors are needed to comply with the standards
of audit independence and others. The objectives of this report is to analyse certain aspects
like the effects of material misstatements on the key stakeholders of Telstra Corporation,
audit independence, lessons from Enron collapse and others.
Impact of Material Misstatements on the Key Stakeholders of Telstra
Improper identification, disclosure and adjustment of the material misstatements
affects the key stakeholders of the companies in major way and the following discussion
shows the effects of the same on the key stakeholders of Telstra:
Shareholders: Shareholders are considered as the key stakeholders of Telstra as they
analyses the financial statements to make the share investment decision in the company
(telstra.com.au 2019). Hence, they will not be able to judge the true financial position and
performance of Telstra in case there is material msisstatents in them.