Auditing and Assurance in Australia

Running Head: Auditing and Assurance in Australia 1
Auditing and Assurance in Australia
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Auditing and Assurance in Australia 2
Accounting can be considered to be a language of an economy, sector, or an entity in that
it involves identifying, recording, analyzing, summarizing as well as making reports about
financial information. It is on the basing of the above processes that deductions can be made
about the financial status of an economy or an entity. Accountancy firms are responsible for
providing auditing services that can help owners of entities to maintain appropriate means of
financial resource organization and compliance with taxes as a way of preparing for the growth
of their businesses. As such, owners of entities should always consider accountancy firms as
integral partners to their undertaking rather outsourcing costs for their record keeping. Because
accountancy firms do not offer all services that may be desired by an entity, there is a need for
entity owners to interview a multiple of these firms to establish the one which suits their needs
and interests. Australia’s “big four” accountancy firms include; Steve Cannane was considering
Delloite, Price water Cooper, KPMG and Earnst and Young in his article. Cannane, as a British
investigative journalist on activities overseas, assessed the practices that are being exercised by
Australia's accountancy firms (Cannane, 2018).
From his assessment, Cannane asserts that there is a need to put Australia's “big four”
accountancy firms under the spotlight of the royal banking commission as a way of shaping the
nation's accounting proficiency. Banking royal commission is an element which is concerned
with the making of investigations to find out whether financial services among Australia's firms
have been involved in any misconduct in their operations. In case, there is evidence of
wrongdoing, then all the legal proceedings are forwarded to the commonwealth so that culprits
can face justice as a way of protecting interests of Australia’s economy (Cannane, 2018). From
this point of view, Cannane wishes to have investigations conducted into the operations of the
“big four” accountancy firms in Australia as a way of eliminating the existing forms of

Auditing and Assurance in Australia 3
misconduct in their operations. The discussion in the paper will involve identifying the various
forms of misconduct associated with the “big four” an accountancy firm, identifying
opportunities and challenges in Australia’s auditing profession. Besides, the paper will also
evaluate the various policies that have been put in place by Australia to monitor operations of its
“big four” accountancy firms. The conclusion section will involve making a recap of the points
that support the proposition that Australia's “big four” accountancy firms should be put under the
spotlight of the royal banking commission. I agree that Australia's "big four" accountancy firms
should be put under the spotlight of the royal banking commission as a way of shaping the
accounting and auditing practices for the financial institutions. The above proposition is
supported by the following arguments.
Massive conflicts of interest has resulted into bribery incidences among Australia’s “big
four” accountancy firms due to the fact that they sell consultancy services to the same companies
which they are meant to independently audit. Bribery is simply an act that involves offering and
receiving of a valuable item as a way of influencing an action or decision by an individual who
has authority in a legal entity. Bribery incidences among these firms are attributed to absence of
zero tolerance policies against unethical practices like bribery which has created greedy
characters by employees at these accountancy firms. Another element which is making
Australia’s “big four” accountancy firms to engage in bribery to meet their interests is
ineffectiveness of the government’s anti-corruption agencies. These agencies have not
effectively monitoring and evaluated actions of Delloite, Price water Cooper, KPMG and Earnst
and Young whilst selling consultancy services to the various companies. Moreover, bribery
practices negatively contribute to the reputation of an entity or an economy due to the waste of
resources for meeting self-interests. In most cases, staffs at Delloite, Price water Cooper, KPMG

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and Earnst and Young have faked pay slips as well as Medicare cards due to conflicts of interest
arising from the ability to sell consultancy services to audit same companies. As such, it can be
seen that Delloite, Price water Cooper, KPMG and Earnst and Young are greatly exploiting the
companies due to desire to meet their interests at the expense of client firms. It is from this point
of view that the accountancy firms should be put under the spotlight of royal banking
commission so that the culprits who have been engaging in bribery can be brought to face justice
(Mattha 2018). In due course, legal proceedings may help to retrieve some of the financial
resources that had been lost due to the selfish interests of various professional in Australia’s
accountancy firms. Moreover, the retrieved financial resources can be used to facilitate multiple
development projects in infrastructure to meet the interests of the Australian community.
Therefore, the “big four” accountancy firms should be put under the spotlight of royal banking
commission to ensure that bribery practices are eliminated to protect Australia's financial
resources.
Massive interest among these “big four” accountancy firms has also give rise to an issue
of continuous failure to verify the costs of operation among client firms before consultancy
services are advanced unto them. The above claim is derived from the fact that Delloite, Price
water Cooper, KPMG and Earnst and Young are not always considering all the necessary
prerequisites needed before selling their consultancy services to companies. Such a factor has
rather increased the operation costs of the audit client firms because the accountancy firms do
not consider elements like financial strength of their clients. As such, consultancy services that
are sold to audit clients are not able to yield desirable outcomes due to lack of consideration of
the financial strengths of clients. Moreover, these big four accountancy firms are basically
focused on meeting their sales interests without prior need to make use of auditing principle to