AUDITING ASSURANCE AND PRACTICE Auditing Assurance and Practice Name

Running head: AUDITING ASSURANCE AND PRACTICE
Auditing Assurance and Practice
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1AUDITING ASSURANCE AND PRACTICE
Executive Summary:
The report here will be performing a detailed analysis of the notions regarding the material
misstatement of the accounting information below the materiality level that changes the
company’s perception regarding the financial situations amid the stakeholders. The report
would be addressing the effect of material misstatement on the decision making ability of the
stakeholders. An analysis of Wesfarmers stakeholders would be performed to determine the
main risks that are faced by the stakeholders of company. Additionally, an analysis of Enron
scandal will be considered as well. Furthermore, the statement of Greg Medcraft would be
assessed to discuss the quality of audit that the professional accountants should be addressed.

2AUDITING ASSURANCE AND PRACTICE
Table of Contents
Introduction:...............................................................................................................................3
Key Stakeholder Analysis of Woolworths:................................................................................3
Concepts of Independence and Whistleblowing:.......................................................................5
Lessons auditors can learn from Enron scandal and behaviour of Arthur Andersen:................6
Behaviour of Arthur Andersen:..................................................................................................8
Audit Quality and explanation relating to auditors need in addressing the waring noted by
Greg Medcraft:...........................................................................................................................9
Conclusion:..............................................................................................................................12
References:...............................................................................................................................13

3AUDITING ASSURANCE AND PRACTICE
Introduction:
The report here will take into the account the concept of materiality misstatement in
the accounting information that changes the view of an organizations economic state of
affairs amid the stakeholders. In the process of auditing, the auditing evidences mainly
creates an influence on the degree and emphasises on the audit effort. Whereas the materiality
decision is related with the concept of tolerable degree of risks as well as the degree of
evidence that is necessary to create an opinion (Louwers et al. 2015). The concept of
materiality directly creates an impact on the conduct of audit with subsequent view that the
investing community are sceptical regarding its application.
The report would perform the key stakeholder analysis of the Wesfarmers and would
provide an explanation as how the vital stakeholders would be impacted if the material
misstatement is not identified adequately in the financial reports. The concepts of
independence and whistleblowing will be addressed with reference to APES 110 Code of
Ethics (Carson, Fargher and Zhang 2016). The instances of Enron scandal will be mentioned
and reference to APES 110 code of ethics for audit quality of professional accountants will be
discussed as well.
Key Stakeholder Analysis of Woolworths:
Wesfarmers have realised that it openly listens to its stakeholders as it is vital in
understanding their changing anticipations. Every division of Wesfarmers communicates with
its stakeholders in the most appropriate manner for its business by considering the needs of
its stakeholder groups (Sustainability.wesfarmers.com.au 2019). Based on the group level the
Wesfarmers takes into the account the interest of the wide range of stakeholders that is
ascertained by the actual or probable effect of its business on their interests.