AUDITORS PUBLIC INTEREST RESPONSIBILITY.
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Added on 2019-09-21
AUDITORS PUBLIC INTEREST RESPONSIBILITY.
Added on 2019-09-21
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AUDITORS PUBLIC INTEREST RESPONSIBILITY
Executive SummaryIn this report, the learning and analysis of auditing practices and loopholes in auditing have beenhighlighted with a centralized case evolution of Enron Bankrupts. In the year of 2001, the UnitedStates leading energy producing company has gone bankrupt, after that it has been reported thatauditing practices have been carried out by the firm Author Anderson has been made misevaluationand avoided misstatements presented by Enron in the financial statement of the firm. The case hasraised issues regarding the auditing issues and problems throughout the globe. The company mightnot be able to meet the employees' requirement and demands due to lack of such amount of moneyin the company. This results to either increase of doubtful case over the financial statement orreason for employees switching to other jobs in the market. In the report, it has been evaluated thatthe share prices downfall of Enron has also might be ,made negative impact on the stock market,thus the fake valuation in the way can provide benefit with the organisation as it might able to forman enhanced image in the marketplace. Thus, there are different strategies and steps are highlightedand evaluated in the report, which ensures the auditing roles and responsibilities required to bereviewed, revisited and reanalysed to avoid such kind of human errors and build another case likeEnron. In the following to scandal, while it has raised questions about accounting practices, thereport has highlighted that the accounting professional and ethical standard board (APESB) hasengaged 110 code of ethics for engagement of principles to be followed by Accountants undersection 100. This has lead to a set of different policies to redefine roles and responsibilities ofauditing individuals. The report has also highlighted that engagement of central power and approvalsystem can reduce any form of human error., which is an advisory in returns to the warning that hasbeen issued after the scandal of Enron. In addition to it, the auditing practices that has beenattempted by an auditing individual can produce evidence for approval from its superiors.
Table of ContentsIntroduction...........................................................................................................................................41.0 Key Stakeholder analysis of Bank of Queensland............................................................................42.0 Conception of independence and Whistle lowing in the context of auditors and how it relates topublic interest requirement...................................................................................................................53.0 Lessons to the auditor from Enron Scandal.....................................................................................64.0 Research on audit quality and requirement to address “warning”..................................................8Conclusion...........................................................................................................................................10References...........................................................................................................................................11
Introduction The Enron was an energy commodity and Service Company, which was formed in the year 1985, thecompany, has employed about 30000 employees as of the year of 2000. The company has reportedthat it has earned and profit or revenue value of US $101 billion in the year of 2000. From therevised and brief analysis of the financial statement of the company, it has been revealed that thecompany has been manipulating its revenue figures from past many years in relation to create a fakeprofitable image in the marketplace. The Enron became one of their centre point scandal that hasbought out the loopholes and auditing and practices. There are different oldies and legislation havebeen introduced by the government of almost every nations in relation to the practice of auditingpractices. The particular report is based on critical analysis of auditing, its significance, andloopholes, which have been observed in the context of ASX, listed Australian banking company Bankof Queensland. In the report, with the context of BOQ ( Bank of Queensland), it has enhancedlearning over the changes made in auditing practices and lessons least by auditing individuals fromthe Enron scandal that has been hit in the year of 2001. 1.0 Key Stakeholder analysis of Bank of Queensland It has been evaluated that almost 23% of the cases, which has been seen that the auditingindividuals do not provide proper analysis and dictation of the financial values presented by them.The Bank of Queensland includes several stakeholders in the market, within which the customers,employees, managers and financial institutions of the firm. It has been evaluated that misstatementof financial values are not identified, analysed, disclosed and adjusted; it significantly provides falseand fake information of the company that later on lead to issues of the business entity and itscustomers (Alleyne, Hudaib & Haniffa, 2018). In respective of consumers, the fake values increasecustomer loyalty and brand image, thus might increase the risk of low-quality products to bepurchased by consumers’ with highball higher costs in the market. The shareholders are anotherstakeholder of Bank of Queensland; the individuals invest in the shares might not get the return oninvestment as expected as the valuation of revenues are manipulated, which means the companymight not have such income to provide share prices as income values are manipulated as fake valuesin front of the public. In addition to it, the share prices might be increased in the stock market. Thusthe fake valuation in the way can provide benefit with the organisation as it might able to form anenhanced image in the marketplace (Simon, Smith & Zimbelman, 2018). However, the financialinstitutions, which are other stakeholders of the business makes critical analysis and evaluation ofthe financial statement of the firm. The manipulated values might be in the doubtful case of the
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