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 current report has conducted key stakeholder analysis of an organisation listed in ASX, for
which Orica Limited is considered. Certain other auditing aspects like independence and
whistleblowing, scandal of Enron and warning statement of Greg Medcraft, the former
chairman of ASIC, have been evaluated as well. It has been found that Orica Limited has
different stakeholder groups and it has been analysed that any material misstatements in
financial information would have adverse impact on their decision making process. Moreover,
audit independence and whistleblowing are identified as two concepts that act as impediments
to the unethical practices adopted by the global organisations. Furthermore, the collapse of
Enron contains significant lessons from the auditors and thus, they are expected to provide
reasonable assurance of their obligations. This necessitates the need of implementing
considerable safeguards and complying with the necessary auditing principles and ethics
mentioned in APES 110.

2AUDITOR’S PUBLIC INTEREST RESPONSIBILITIES AND AUDIT QUALITY
Table of Contents
1. Introduction:.............................................................................................................................. 3
2. Stakeholder analysis of Orica Limited:.......................................................................................3
3. Concepts of independence and whistleblowing in relation to auditors:....................................5
4. Lessons for the auditors from Enron scandal:............................................................................7
5. Audit quality and steps to be undertaken for addressing the warning provided by Greg
Medcraft:..................................................................................................................................... 10
6. Conclusion:.............................................................................................................................. 14
References:.................................................................................................................................. 15

3AUDITOR’S PUBLIC INTEREST RESPONSIBILITIES AND AUDIT QUALITY
1. Introduction:
At the time substandard audits are conducted and there is no reliable determination of
assurance, the significant stakeholders are vulnerable to a number of risks and the situation is
similar in case of the auditors as well. The current report would carry out key stakeholder
analysis of an organisation listed in ASX, for which Orica Limited is considered. It manufactures
and sells blasting systems and commercial explosives to the mining firms operating in Australia
(Orica.com 2019). After the completion of stakeholder analysis, the effect of material
misstatements on each identified group would be analysed; in case, they are not disclosed
appropriately. The second portion would concentrate on the concepts of whistleblowing and
independence for the auditors and the linkage could be observed between these concepts and
the requirements of public interest in accordance with APES 110. The focus of the next section
would be on the lessons for the auditors from the scandal of Enron and especially, the
behaviour of Arthur Andersen. Finally, the report would lay stress on audit quality and the steps
that the auditors have to adopt from the statement of Greg Medcraft.
2. Stakeholder analysis of Orica Limited:
Orica Limited is observed to have the following stakeholder groups and if material
misstatements are found in the financial information of the organisation, they would be
affected in a number of ways, which are enumerated as follows:
Suppliers:
Orica Limited is focused on assuring long-term results to be beneficial for the suppliers
by recognising that effective negotiations would ensure sustainability of both parties. In case,