Instruction to students: This is an individual assignment.
Marks: 30 marks
Word Limit: 3,000 words
Task: HI6026 Audit, Assurance, And Compliance Assignment
Background and Context:
In a recent interview with ABC news, the now former Chairman of the Australian Securities and Investment Commission (ASIC) Greg Medcraft warned that: “We don’t want to have another Enron. And the key to not having another Enron is making sure auditors do their job and to get an assurance that financials are free of
material misstatement” Enron was an energy, commodities, and services company based in Texas, USA. It
was founded in 1985. Prior to its bankruptcy on 3 rd December 2001, Enron employed close to 30,000 staff and was significant electricity, natural gas and communications company, which had reported revenue of nearly US$101 billion during the year 2000.
By the end of 2001, it was revealed that Enron’s reported financial position was manipulated by a systematic and preconceived accounting fraud, known since as the “Enron Scandal”. Enron has since become known as an infamous case of audacious corporate fraud and corruption. The scandal also brought into question the accounting practices and activities of many corporations in the USA and was a factor in the creation of the Sarbanes–Oxley Act of
2002. The scandal also led to the demise of the accounting firm, Arthur Andersen, which was Enron’s auditor.
Pre –Assessment Task:
Download the latest APES 110 Code of Ethics for Professional Accountants document. Review all the sections within this document which relate to the Auditor’s role in providing reasonable assurance and performing auditing services. Refer to the section in the textbook on “Whistleblowing” on pp 268 – 270, focussing on the paragraphs which mention Enron.
When sub-standard audits are performed and reasonable assurance cannot be reliably ascertained, there are consequential risks for key stakeholders, including auditors. In light of this, perform the following key assignment tasks:
1. Perform a key stakeholder analysis for an ASX listed company. Explain how the key stakeholders would be affected if material misstatements are not properly identified, disclosed or adjusted for in the finalized financial statements. What are the key risks posed to each key stakeholder you have identified? (300 – 400 words)
2. Consider the concepts of independence and “whistleblowing” in relation to auditors. How do these concepts relate to the public interest requirements mentioned in the APES 110 Code of Ethics for Professional Accountants document? (300 – 400 words)
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Report Structure: HI6026 Audit, Assurance And Compliance Assignment-HOLMES Institute Australia
1. Executive Summary
• The Executive summary should be concise and not involve too much detail.
• It should make commentary on the main points only and follow the sequence of the report.
• Write the Executive Summary after the report is completed, and once you have an overview of the whole text.
• The Executive Summary appears on the first page of the report.
2. Contents Page – This needs to show a logical listing of all the sub-headings of the report’s contents.
3. Introduction – A short paragraph which includes background, scope and the main points raised in order of importance. There should be a brief conclusion statement at the end of the Introduction. (100 – 200 words)
4. Main Body Paragraphs with numbered sub-headings – Detailed information which elaborates on the main points raised in the Introduction. Each paragraph should begin with a clear topic sentence, then supporting sentences with facts and evidence obtained from research and finish with a concluding sentence at the end.
5. Conclusion – A logical and coherent evaluation based on a thorough and objective assessment of the research performed. (100 – 200 words)
6. Appendices – Include any additional explanatory information which is supplementary and/ or graphical to help communicate the main ideas made in the report. Refer to the appendices in the main body paragraphs, as and where
HI6026 – Individual Assignment Marking Rubric