Analysis of Audit, Assurance and Compliance

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

1AUDIT, ASSURANCE AND COMPLIANCE
Executive Summary
The aim of this report is the analysis of different aspects of auditing like the effects of
material misstatements on the key stakeholders of Coca-Cola Amatil; concepts of auditor
independence and whistleblowing; lessons from Enron Collapse; and the steps that the
auditors are needed to take due to the warning of Greg Medcraft. The result of the report
shows that improper identification of material misstatements in the financial statements
affect various decision-making process of the key stakeholders. After that, unethical
behaviours within the organizations can be eradicated in the presence of auditor
independence and whistleblowing process. In addition, the Enron Scandal shows that
auditors must conduct their works in the ethical and responsible manner.

2AUDIT, ASSURANCE AND COMPLIANCE
Table of Contents
Introduction............................................................................................................................. 3
Effects of Material Missstaments on the Key Stakeholders of Coca-Cola Amatil.....................3
Auditor Independence and Whistleblowing.............................................................................5
Lessons from Enron Scandal and Arthur Andersons’s Behaviours...........................................6
Audit Quality and Needed Steps by the Auditors.....................................................................9
Conclusion.............................................................................................................................. 12
References..............................................................................................................................14

3AUDIT, ASSURANCE AND COMPLIANCE
Introduction
Auditing can be considered as a special process where the auditors apply different
kinds of analytical procedures for the analysis and inspection of their clients’ financial
statements and the aim is to find out whether there is any material misstatements in them
or not (Chan & Vasarhelyi, 2018). The key stakeholders of the business organizations
consider the report of the auditors as a proof of the presence or absence of material
misstatements in them. It puts the obligation on the auditors to conduct the audit
procedures as per the required standards and principles. For the same purpose, the auditors
can take essential lessons from the large corporate collapses all over the world like Enron
and others (Reding et al., 2013). This particular report has certain aims. The first aim of this
report is the analysis of the presence of material misstatements on the key stakeholders of
Coca-Cola Amatil, an ASX listed company. The next part of the report puts focus on the
concepts of auditor independence and whistleblowing in auditing. The next parts sheds light
on the auditing lessons learned from the collapse of Enron. The focus of the last part is to
suggest the needed steps to be taken for improving the audit quality.
Effects of Material Missstaments on the Key Stakeholders of Coca-Cola Amatil
It affects the key stakeholders of the companies in major way when the auditor fails
in properly identify the material misstatements in the financial statements and it is also
applicable for the key stakeholders of Coca-Cola Amatil. The effects are shows in below
discussion:
Shareholders: Shareholders in Coca-Cola Amatil include the persons and companies that
invest in the company for getting higher return (coca-colacompany.com, 2019). On the
other hand, Coca-Cola Amatil fulfil their capital need from their invested money. This