Audit Report And Assurance Services Assignment

Running head: AUDIT AND ASSURANCE SERVICES
Auditing and assurance services
Name of the Student
Name of the University
Author Note

AUDIT AND ASSURANCE SERVICES
Introduction:
The paper conducts a comprehensive analysis of the various issue over audit quality
that has been reported in some of the research papers and journal articles published in the
newspaper such as abc.net.au and forbes.com. In addition to this, the improvement in the
audit quality brought by the restructured code of ethics has also been analysed. Various
corporate bodies and government regularities have been placing importance on strong ethical
behaviour in the given spate of accounting and financial scandals. Concerns have been raised
at the international level and in Australia by the regulators regarding the quality of audit. The
emerging technologies in the audit profession are equally significant and exciting and the
development of cloud enablement and block chain and better integrated ERP system has
resulted in higher quality of audit.
Discussion:
The implementation of artificial intelligence technology is expected to play a
prominent role in the risk management of enterprise. Board of the organization is required to
take into account some issues for implementing the technology to the benefits of auditing.
Ethical issues concerning the technology adoption should be managed by developing an
appropriate infrastructure in organization. The auditing profession is expected to be
transformed by the artificial intelligence but the work of auditor would never be replaced
(Arnold, 2018).
In one of the reports published by the government of Australia conducted an analysis
into the audit quality perception by the professional investors, influences and value of audit
that is the perception of value and quality of audit is influenced by the professional investors.
Also, measurement and defining of the audit quality is regarded challenging. The perception
of audit value is significantly influenced by the information quality presented in the auditor’s

AUDIT AND ASSURANCE SERVICES
report. Report has presented the analysis of audit quality across some group of stakeholders
and found that the evaluation of audit quality is based on the process, output, contextual and
output factors. There exist a clear connection between the financial report quality and audit
quality and is demonstrative of the fact that the financial reporting quality is influenced by
the auditors. When assessing the value and utility of audit services, the professional investors
place importance on the transparency report of the audit firms. Such report intends to provide
the indicators of audit quality and transparency to the market about the firm. In addition to
this, the information presented in the auditor report is also influenced by the use of artificial
intelligence and data analytics. The contribution of technology in enhancing the quality of
audit is more than generating efficiencies in terms of costs. That is the investor considers that
the technology has the potential to enhance the audit quality rather lowering the audit cost
(Tidd & Bessant, 2018).
The article published in forbes.com titled” How advanced technologies may improve
audit quality” presents arguments on improvement of the audit quality due to use of various
advanced technologies. The fact that the audit quality improves with the help of technologies
has been found from the survey conducted on corporate finance executives. Audit
improvement are not incremental with the audit firms spending on technology by around $ 5
billion in a year. Improvement in audit quality is being done by the adoption of primary tools
by the auditors such as visualization, artificial intelligence and automation of robotic process.
These technologies are considered to be good until they are guided by the audit team and
analysing the results. It is inferred from the analysis of this paper the work of auditors are
augmented by technology and has the potential of improving the audit quality (Eileen
Hoggett, 2020).
The media news from abc.net.au on “the conflict of interest in the audit firm that
could spark Enron style collapse” has presented the global auditing profession facing the

AUDIT AND ASSURANCE SERVICES
issue of escalating conflict of interest. Unreported corruption and the widespread fraud due to
the poor auditing standard and conflict of interest has resulted in the collapse of Enron. The
quality of audit report was questioned by the regulators whether there was enough evidence
to make justification of opinions. The companies regulated by ASIC and ASIC itself have a
cosy relationship as the prosecution of any identified misconduct is not done promptly. The
audit firm’s professional conduct have become a matter of concern due to growing conflict of
interest between lucrative consulting firms and auditing. Article has presented an issue over
consulting and auditing firms and the inclination of the staffs towards consulting firms
because of lucrative offers. A policy solution has been recommended on the growing issue of
conflict of interest to have an audit commission actually appointing the large listed
organization’s auditors and determine the audit fee (Kokina & Davenport, 2017).
An article from afr.com over audit quality of big four firms presented regulation of audit
quality. It is reported in the article that the regulation of audit quality found that most of the
audits were accomplished with inadequate assurance (afr.com 2019).
In the press release by Pwc, the first balance scorecard on the audit quality on the
debate of audit quality to improve the audit process was presented. The increasing demand of
disclosing the results of audit inspection by audit firms and the regulation of such results is
supported by Pwc. Balance scorecard published by the company has assisted with the issue
over audit quality by disclosing the results of inspection on audit to public along with the
disclosure of the performance against other measures of quality. The measure of the audit
quality comprise of the global audit inspections, findings of audit inspection of ASIC,
adjustments, restatements, independence and non-audit services. On the findings of audit
inspection by Australian securities and investment commission, non-reasonable assurance
was obtained in 12% of key areas of audit that there is no material misstatement in the
financial report. In addition to this, in the global inspection by Pwc, it was found that the