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 report states that Origin Energy has various stakeholders like investors, business
partners and others who can be affected by the inappropriate identification of material
misstatements in the financial statements. As per this report, whistle-blowers help in
reporting the unethical actions within the organizations. After that, the auditors can learn
many lessons from the collapse of Enron like the restriction on the manipulation of the
financial statements, use of the proper auditing standards and others. The report states that
the auditors are needed to comply with all auditing standards and regulations for the
minimization of audit threats.

2AUDIT, ASSURANCE AND COMPLIANCE
Table of Contents
1. Introduction......................................................................................................................... 3
2. Origin Energy’s Stakeholder Analysis....................................................................................3
3. Independence of Auditors and Whistleblowing in Auditing.................................................5
3.1 Auditor Independence....................................................................................................5
3.2 Whistleblowing...............................................................................................................5
3.3 Public Interest Requirements.........................................................................................6
4. Lessons from the Collapse of Enron and the Behaviour of Arthur Anderson’s.....................6
4.1 Auditing Lessons.............................................................................................................6
4.2 Lesson from Behaviour of Arthur Anderson...................................................................9
5. Quality of Audit and Needed Steps to be taken by the Auditors........................................10
6. Conclusion.......................................................................................................................... 12
7. References..........................................................................................................................14
8. Appendices......................................................................................................................... 17

3AUDIT, ASSURANCE AND COMPLIANCE
1. Introduction
The auditing procedures demand the involvement of the auditors for the inspection
and analysis of the financial reports of the audit clines in order to ensure that they are free
from material misstatements (Louwers et al. 2015). The audit report provides the assurance
whether there is any material misstatements in the financial statements and the key
organizational stakeholders consider audit reports as an essential tool to judge the
truthfulness and fairness of the financial reporting of the companies. In this situation,
inferior conduct of audit procedures fails to provide sufficient audit assurance and the
material misstatements in the financial statements remain undetected (Knechel and Salterio
2016). This particular situation affect the key stakeholders of the companies majorly as the
presence of material misstatements contribute to wrong investment decisions by the key
stakeholders. For this reason, the auditors are needed to take lessons from the large
corporate collapses with the aim to avoid the same mistakes again. This report aim at
performing key stakeholder analysis on Origin Energy, an ASX listed company, for analysing
the effects of undetected material misstatements on them. This report also considers
analysing the aspects like auditor independence, whistleblowing, auditors’ lessons from
Enron scandal and others.
2. Origin Energy’s Stakeholder Analysis
Origin Energy has certain stakeholders who are closely connected to the business
operations of the company; and the presence of material misstatements in the financial
statements would majorly affect them from different dimensions. These are discussed
below: