Auditor’s Public Interest Responsibilities and Audit Quality

Running head: AUDITOR’S PUBLIC INTEREST RESPONSIBILITIES AND AUDIT QUALITY
Auditor’s Public Interest Responsibilities and Audit Quality
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1AUDITOR’S PUBLIC INTEREST RESPONSIBILITIES AND AUDIT QUALITY
Executive Summary:
The report analyses the various auditing aspects like the impact of material misstatements on
the major stakeholders of CSR Limited along with the whistleblowing and auditor independence
concepts. The report has covered lessons learnt from the Enron collapse and the actions to be
taken by the auditors for avoiding further financial crisis in future. From the outcomes of the
report, it could be stated that if material misstatements are not identified properly, the
decision-making process of the significant stakeholders would be affected considerably.
Moreover, with the help of auditor independence and whistleblowing practices, it is possible to
eliminate the unethical practices conducted by the organisations in preparing their financial
reports. Finally, the scandal of Enron denotes that the auditors are needed to perform their
obligations ethically and responsibly.

2AUDITOR’S PUBLIC INTEREST RESPONSIBILITIES AND AUDIT QUALITY
Table of Contents
Introduction:.................................................................................................................................. 3
1. Stakeholder analysis of CSR Limited:.........................................................................................4
2. Concepts of independence and whistleblowing in relation to auditors and APES 110:.............5
3. Lessons to be learnt from Enron scandal and behaviour of Arthur Andersen:..........................7
4. Audit quality and analysis of the statement of Greg Medcraft with reference to APES 110:...10
Conclusion:.................................................................................................................................. 13
References:.................................................................................................................................. 15

3AUDITOR’S PUBLIC INTEREST RESPONSIBILITIES AND AUDIT QUALITY
Introduction:
The audit processes need the engagement of the auditors for examining and assessing
the financial reports of the audit clients so that they do not contain material misstatements
(Andon, Free & O'Dwyer, 2015). With the help of audit report, assurance could be obtained
regarding whether material misstatements are evident in the financial reports, which form the
key to the organisational stakeholders. This is because they consider audit reports as a vital tool
for analysing the fairness and accuracy of financial reporting of the business organisations. In
this context, poor conduction of audit processes does not provide adequate assurance and
thus, it becomes difficult to identify material misstatements in financial reports (Aren et al.,
2015). This specific situation has direct impact on the significant stakeholders of the
organisations, since material misstatements might lead to incorrect investment decisions.
Due to this reason, the auditors require learning lessons from big corporate collapses
with the intent that such mistakes are not repeated again. The current report would involve
conduction of stakeholder analysis in the context of CSR Limited, which is a listed company in
“Australian Securities Exchange (ASX)”, in order to evaluate the impact of unidentified material
misstatements on them. It is a major Australian industrial organisation manufacturing building
products with 25% share in the aluminium shelter of Tomago situated near Newcastle in New
South Wales, Australia (Csr.com.au, 2019). Moreover, the report takes into account various
aspects such as whistleblowing, auditor independence, lessons learnt from the Enron scandal
for the auditors and others.