The Lehman Brothers Bankruptcy : The Global Contagion

Running head: AUDITING
Auditing
Name of the Student
Name of the University
Author’s Note

AUDITING1
Executive Summary
The introduction of ASA 701 that ensures the disclosure of KAMs in the audit report makes
audit more transparent while increasing the overall audit quality. After the collapse of
Lehman Brothers and the occurrence of financial crisis, investors and other users of financial
statements have been criticizing that audit reports contain very little information for them and
ASA 701 has been developed to cater to this demand of the investors. With ASA 701, the
accountability of the auditors is to disclose those matters in the audit report that are of key
significance to them for the audit of the company.

AUDITING2
Table of Contents
Introduction................................................................................................................................3
Auditing Standards of ASA 701 and ASA 570..........................................................................3
ASA 701.................................................................................................................................3
ASA 570.................................................................................................................................4
Reasons for the Development of these Standards..................................................................4
KAMs and Its importance......................................................................................................5
Analysis of KAM.......................................................................................................................5
ANZ Banking Group Limited................................................................................................5
Bank of Queensland...............................................................................................................5
Commonwealth Bank.............................................................................................................5
National Aust. Bank...............................................................................................................6
Westpac Banking Corp..........................................................................................................6
Similarities and Differences in Annual Reports.....................................................................6
Requirements of ASA 701.....................................................................................................6
Recommendations......................................................................................................................7
References..................................................................................................................................8