ACCT704 Auditing (Semester 2, 2019): Student Learning Reflection

This assignment is a student's reflection on the Enron audit scandal, written for an ACCT704 Auditing course. The student, a finance major, chose to study accounting and auditing due to its importance in the finance sector. The reflection discusses the Enron scandal, highlighting the company's fraudulent practices, including the use of special purpose vehicles to hide debt and misrepresentation by auditors. The student explores the significance of the scandal, emphasizing the impact of auditor misrepresentation on the company's downfall. The reflection connects the scandal to various auditing concepts such as auditor misrepresentation, true and fair view of audit reports, and the importance of maintaining ethical standards. The student concludes by acknowledging the value of this study in understanding auditing misconceptions and the need for proper regulations. The assignment includes references to relevant academic sources.

Running head: ACCOUNTING AUDIT
Accounting audit
Name of the student
Name of the university
Authors note

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ACCOUNTING AUDIT
Table of Contents
Introduction....................................................................................................................2
Discussion......................................................................................................................2
Audit incident.............................................................................................................2
Significance of the incidence.....................................................................................3
Relevance of this scandal through auditing concept..................................................3
Conclusion......................................................................................................................4
References......................................................................................................................5

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Introduction
I am a student of management in finance specialization. Threfore for a finance
student, accounting and auditing is considerd as the key subject. Apart from the other subjects
of management, I have most preferred to go for accounting and auditing because it is the core
area of the finance sector and auditing is the main part of the finance. Every company does
auditing of their financial statement in the end of every financial year. Therefore the true
auditing reflects actual business performance of the company. furthermore I have choosen
this paper to study on because this particular paper provides effective learning and knowledge
gathering about how an auditing conducts. On the other hand my study is based on the recent
audit scandals that had happened in the big organsations of Australia.
Discussion
Since auditing reflects the overall picture of the company financial report, therefore it
is important that the auditor must maintain the truithfullness of the auditing from beginning.
Howwever man scandals happened in the areas of company auditing had let many companies
to stop their business. Some of these companies are enron, Thomas cook , satyam computer
who had to stop their operation due to auditor misrepresentation of the audit report. Therefore
I have choosen this paper in order to highlight the one such experience of audit scandal which
had enforced me to study this paper deeply.
Audit incident
Out of many audit scandals one such incident which had shook the world and let the
government to implement new lawsuits to maintain the true and fair view of auditing is the
enron scandal. This company used to manufacture and supply electronic appliennces. The
company had been operating quite well and the share price was at the peak. The company had
been indulged in a series of events which had indulged them in getting bankrupt and

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eventually loose their market. It had forced to stop their business, the share price fallen
drastically and the CEO commited suicide .
Significance of the incidence
After I have studied about this incident, I have found certain issues that had caused the
company to close down the business. These are as follows-
 The company leadership had fooled the regulators withf fake holdings and off the
book accounting practises.
 The company had used special purposed vehicles and entities to hide the debt and
toxic assets from the investors and creditors.
 The company share price had fallen from peak to bankruptancy.
Therefore the significance of this study to myself is that I have been able to know about
the true aspacts which had happened with this company. hence I feel that I have been able to
learn about the auditor misrepresentation through this study.
Relevance of this scandal through auditing concept
From this scandal I have been able to learn about various auditing concepts. These are as
follows-
 The audit firms placed increased emphasis on performing consuting services for audit
clients.
 The downward pressure of the audit fees.
 The firms increased reliance on cost effective auditing.
This auditing scandal had helped me to gain knowledge about the key audit process
which I would like to highlight. These are as follows-
 The auditor must maintain true and fair view of the audit report.

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 Auditor misrepresentation is what had caused enron to slip out of the business. It
needs to be taken care of.
After going through this topic I feel that the concepts like auditor misrepresentaaion
and true and fair view of the audit report will help me to grow as a future auditor and make
sure that I do justice with my work.
Conclusion
Overall this topic had helped me excel my knowledge in multiple ways. Since the
company auditing is an important area, therefore I feel that the auditing scandal of enron will
help me to fulfil my queries related to the auditing misconception, fairness of the audit report
and implemention of proper rules and regulations while performing the audit process
effectively.

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References
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