The auditing and assurance services

Running head: AUDITING AND ASSURANCE SERVICES
Auditing and assurance services
Name of the student
Name of the university
Student ID
Author note

1AUDITING AND ASSURANCE SERVICES
Introduction
Audit quality includes key elements those are used to generate the environment that
optimizes the possibility that the quality audits has been carried out on consistent basis.
Major regulation for Corporation Act is regulated by ASIC and the same is accountable for
surveillance, investigation and imposing requirements related to the financial reporting in
compliance with the Corporation Act as well as the regulation for the auditors applicable for
the registered firms (Baber et al., 2015). In addition, it takes into consideration the
management of auditor’s independence along with maintaining the audit quality. Main
objective of ASIC’s inspection program is to promote the external audits of high quality in
context of financial reports of listed firms and the firms those are interested publically. Large
numbers of leaders from finance sectors feel that external audit is beneficial only when the
advanced technologies such as data analytics, cloud and artificial intelligence is used (Abid &
Ahmed, 2014).
Discussion
As per the recent report of Forbes in context of KPMG survey that included 250
executives from the corporate finance sector, greater than 94 percent are in support of these
technologies for enhancing their audit quality. As per Steven B. Harris of PCAOB
enhancement to audit are not automatic process (Pcaobus.org, 2019). Various tools are
utilised by them to enhance the quality of audit includes (i) Robotic process automation – this
can be utilised for the software to interpret and capture transaction, to manipulate and send
the same in form of standardised response and automating statement with number of other
procedures (Forbes.com, 2019). In addition, it is executed in tax and advisory services widely
and it is used on enhancing basis in audit sector as the same is capable to streamline entity’s
operations and directing the workforce to add additional value. Robotic process automation in

2AUDITING AND ASSURANCE SERVICES
addition is well suited to reconcile transaction on the basis of revenues or other routine tasks
which in turn enable auditors in taking better decisions as well as judgements that will result
into higher quality work as depicted by West region manager partner of KPMG US, Bill
Tomazin (Forbes.com, 2019) (ii) Artificial intelligence - here large number of unstructured
data are there which are growing in leaps and bounds. It has been recognised by the
information researcher technology that in most of the firms’ storage capacity is managed for
50 where most of them are of unstructured nature and they are increasing at 40% to 50% per
year. AI mines the unstructured internal source system automatically and can recognise if any
red flag is there. Further, it can monitor external sources for data that includes social media,
audio-video sources and television for additional information for developing the
comprehensiveness of audit (Forbes.com, 2019).
As stated by former ASIC chairman, Greg Medcraft, interest conflict in global audit
professional may lead to corporate collapse for instance, Enron. In his first broadcast
interview after his retirement it is highlighted that the poor auditing standards as well as
interest conflict resulted into spectacular implosion in context of energy giant Enron from US
which was father allied by the widespread fraud as well as corruption those were not taken
into consideration. Major fact here is that for big corporations collapse is also big and is not
detected by the auditors. Enron can be considered as an example and hence quality of audit is
subject matter for concern since last few decades (ABC News, 2019). In addition it is stated
by Medcraft that the auditors are not sceptical sufficiently and are not willing to take
sufficient challenges. Major issues experienced by auditing firms are that they generally enter
the auditing firm and later prefer to shift into the consulting firm where money can be earned
rapidity. Therefore, considering the attractiveness, audit profession is not there where it shall
be and instead of higher level of regulation, increasing level of competition are needed to
ensure that the audit firms are delivering accurate as well as transparent advises to the clients

3AUDITING AND ASSURANCE SERVICES
as well as to investors (ABC News, 2019). Probable solution for this issue is establishing
audit commission to be held the same accountable for hiring the auditors from the big firms
listed and thereby set fees for audit for those big firms that will in turn minimize the race at
the bottom level. However, irrespective of several warning regarding quality of audit
Medcraft was not willing to comment regarding the Royal Commission criticisms that ASIC
was too comfortable with the firms those are regulated by it and thereby slow in accusing
misconduct (ABC News, 2019).
Though the audit firms are taking adequate efforts to enhance the audit quality and
executing the audit consistently, in conformity with the ASIC report there is still requirement
for additional enhancement and to contemplate new initiatives to enhance the audit quality.
Corporate regulators will publish the results regarding individual form for their inspection
regime in context of audit inspection while it will present its report for next year closing with
making the move to name and shame big 4 farms to consult regarding audit quality
(Australian Financial Review, 2019). Senior ASIC executive leader Douglas Niven stated in
context of financial reporting and Audit that big 4 firms for audit require additional efforts to
enhance the quality of work. Further, ASIC will enhance the audit inspection frequency to
make it a publication on each year basis. In context of audit inspection for the period closing
on 30th June 2019 that is due to release in December ASIC is expecting to publish finding in
context of individual percentage regarding each big firm. Further it is expecting to publish
wide range of the measures for audit quality that will supplement key measures in context of
inspection outcomes. Numbers of partners from various audit firms have combined reaction
regarding the regime of name and shame (Australian Financial Review, 2019). Voluntarily
PWC headed to disclose the outcomes whereas Deloitte raised issues regarding inspection
regime of ASIC stating that the same is not appropriate for the purpose and is highly volatile
along with defending the results voluntarily disclosed. ASIC made the move to strengthen the