EVALUATION OF AUDITING PROFESSION.

Running head: EVALUATION OF AUDITING PROFESSION
Evaluation of auditing profession
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EVALUATION OF AUDITING PROFESSION
Executive Summary
The aim of this report is to analyse the auditing profession in the contemporary world. The
report will provide a highlight on the issue of increase in the corporate fraud in the last two
decades. The report raises a major question on the credibility of the accounting firm
especially the big four firm, on their involvement in the major corporate scandal. Further, at
the end the report discusses about the steps that the government and professional accounting
bodies must take to mitigate the occurrence of such accounting fraud like judicious increase
in the use of technology in the auditing and many more.

EVALUATION OF AUDITING PROFESSION
Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Contemporary Auditing Practices..............................................................................................4
PwC vs. Tyco 2007................................................................................................................5
Royal bank of Scotland (RBS) vs. Bannerman......................................................................6
Ways through which frauds can be committed..........................................................................6
Professional Skepticism.............................................................................................................8
Audit planning............................................................................................................................9
Opportunity and challenges in the Australian accounting profession......................................10
Conclusion................................................................................................................................12
References................................................................................................................................13

EVALUATION OF AUDITING PROFESSION
Introduction
The purpose of this report is to bring in light the Role of auditing in assessing the true
financial health of the organization (Aghghaleh, Iskandar & Mohamed 2014). In the recent
times there has been increased in the number of cases of auditing which are under the
litigation. As per the statement of the report of ACCA “Over the former two decades the bill
for litigation settlements of Big Four audit firms alone has run into billions of dollars.
Examples include Deloitte’s 2005 settlement of $250m regarding its audit of insurance
company Fortress Re and PwC’s $229m settlement in the lawsuit brought by the shareholders
of audit client Tyco in 2007.” The increasing liability of the auditor has been a growing
concern in terms of the quality of audit and reputation.
Discussion
Auditing is the important tools to inspect the books of account of the company in
order to authenticate the accuracy and reliability of the company (Beasley, 2015). There are
various group of stakeholder such as the investor, creditor, financial institution, and lender,
who got benefitted from the auditing of the financial books. For instance
Lender
The lender examine the financial statement of the enterprise, in order to determine the
financial creditworthiness of the enterprise. This will help the lender the in assessing the
credibility of the firm in advancing the loan to the company.
Investor
Investor make their economic decision based on the financial statement which are
being audited by the company.