Auditing Assurance and Practice

Running head: AUDITING ASSURANCE AND PRACTICE
Auditing assurance and practice
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1AUDITING ASSURANCE AND PRACTICE
Executive summary
The purpose of the report is to analyse the famous corporate collapse of Enron and finding
out the responsibility of the persons involved with the company. It will perform the analysis
for key stakeholder for the ASX listed company Rio Tinto. It will consider the concept of
whistle blowing and independence with regard to the auditors in context of APES 110 code
of Ethics for the professional accountants. The report will further highlight the lessons learnt
by the auditor from the behaviour of the Enron’s audit firm. It will further focus on the
requirement of maintaining audit quality as stated by Mr Greg Medcraft.

2AUDITING ASSURANCE AND PRACTICE
Table of Contents
Introduction................................................................................................................................3
Key stakeholder analysis............................................................................................................3
Concepts of independence and whistle blowing........................................................................5
Lesson learned from Enron scandal...........................................................................................7
Audit quality.............................................................................................................................10
Conclusion................................................................................................................................13
Reference..................................................................................................................................14

3AUDITING ASSURANCE AND PRACTICE
Introduction
APES 110 Code of Ethics for Professional Accountants released by IESBA
(International Ethics Standard Board for accountants) of IFAC (International Federation of
Accountants. As per the code the members practicing in abroad or in Australia shall comply
with APES 110 code unless they are prevented to comply so by any applicable regulations or
laws. While applying requirements provided under the code, the members shall be guided by
the words, spirit and code. APES 110 Code of ethics includes 3 parts where part A
established fundamental principles for the professional ethics for the members and delivers
the conceptual framework that the members shall apply for – (i) recognising the threats for
complying with fundamental principles (ii) assessing importance of the recognised threats
and (iii) implementing safeguards for removing the threats or reduce the threats to the
acceptable level, wherever required. Further, the members in practice shall use the
professional judgements while applying the conceptual framework mentioned in the code.
The term ‘shall’ under this code imposes the requirement on members or the company to
comply with particular provision where ‘shall’ is used (Apesb.org.au 2019).
Key stakeholder analysis
Stakeholder analysis is the important technique for the stakeholder recognition and
analysis of their requirements. It is used for identifying the key stakeholders including the
primary as well as the secondary who vested the interest in issues with which project is
concerned. Main objective of the stakeholder’s analysis is the procedures for developing
strategic view of institutional and human landscape and relationship among the different
stakeholders and issues they are concerned about (Riotinto.com 2019).