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
Name of the Student
Name of the University
Author’s Note

1AUDITOR’S PUBLIC INTEREST RESPONSIBILITIES AND AUDIT QUALITY
Executive Summary
The finding of the research have helped in showing the fact that the presence of material
misstatements in the financial statements can lead to the risk of improper decisions by the
company’s key stakeholders. After that, APES 110 provides the necessary safeguards to the
internal whistleblowers of the company with the help of its standards. The findings also
state that the Australian auditors are needed to consider the lessons from Enron scandal to
increase the audit quality.

2AUDITOR’S PUBLIC INTEREST RESPONSIBILITIES AND AUDIT QUALITY
Table of Contents
1. Introduction......................................................................................................................... 3
2. Key Stakeholders Analysis of Woodside Petroleum Limited................................................3
3. Public Interest Requirements...............................................................................................5
3.1 Auditor Independence....................................................................................................5
3.2 Whistleblowing...............................................................................................................5
3.3 Public Interest Requirements of APES 110.....................................................................6
4. Auditors Lesson from Enron Scandal and Behaviour of Arthur Anderson............................7
4.1 Lessons from Enron Collapse..........................................................................................7
4.2 Arthur Andersen.............................................................................................................9
5. Audit Quality and Required Steps to Address the Warning Note.........................................9
6. Conclusion.......................................................................................................................... 12
7. References..........................................................................................................................14
8. Appendices......................................................................................................................... 17

3AUDITOR’S PUBLIC INTEREST RESPONSIBILITIES AND AUDIT QUALITY
1. Introduction
At the time to take the investment decisions, key stakeholders of the business
organizations consider the report of the auditors to judge the truthfulness and fairness of
the companies’ financial statements (Bentley, Omer and Sharp 2013). In the process of
auditing, the responsibility on the auditors is to carry out the systematic as well as
methodical inspection and examination of the companies’ financial statements so that any
kind of material misstatements can be identified as materiality free financial statements
provide the key stakeholders with the true information about the financial performance and
position of the organizations (Abernathy et al. 2013). For this reason, it is needed for the
auditors to maintain the audit quality by complying with the regulations and standards of
auditor independence and professional scepticism. Moreover, the famous Enron collapse
has provided the auditors with certain major lessons that the auditors can use to increase
the audit quality (Lennox, Wu and Zhang 2014). This report discusses about the public
interest requirements of auditors by focusing on the standards and principles of APES 110.
After that, this report also sheds light on the major auditing lessons that can be obtained
from the collapse of Enron.
2. Key Stakeholders Analysis of Woodside Petroleum Limited
Investors and Finance Providers: It can be seen from the appendix that Woodside
Petroleum considers their investors and finance providers as a key group of stakeholder and
the company ensures effective engagement with them for maintaining a cordial relationship
(files.woodside 2019). This stakeholder group collects the necessary financial information
about the company from their financial statements and other sources with the aim to make
effective investment decision about the company’s resources. In this position, improper