Audit Assurance and Compliance Case Study

As per the specific roles and responsibilities of independent auditors, it can be said that the independent auditors have the accountability to prepare as well as present financial declarations based on the accurate historical data of the organization and by considering the company’s financial as well as trading standpoints (Glover et al. 2014). However, the financial announcements of the company need to replicate the actual financial condition of the firm during a particular period of time founded on the flows of cash, functional results, incomes as well as gains along with income and profits (Kend et al. 2014). Nevertheless, in certain cases, particular events or else circumstances might crop up after the specific date of authorizing and declaring the pecuniary reports of the firm. Therefore, it becomes important to adjust and incorporate the effects of these events in the financial declarations in the upcoming financial reports that is to be declared by the corporation. In addition to this, the independent auditors also have the need to attach significance to the events that take place prior to the process of preparation as well presentation of the financial declarations and take into account the material impacts of the events on the preparation of the financial statements related to the organization (Schmidt et al. 2016). Thus, there is pressing need for conducting obligatory adjustments for the purpose of disclosing several critical facts regarding the financial soundness of the organization during the specific period of time. As per the effective adjustments in the financial statements made during the period September 2002, the incidences triggered by the disclosures or else non disclosures can be indicated to the consequent events that involved several parties. As per the case study, it can be hereby ascertained that EFL had to bear huge amount of losses owing to the bankruptcy of the corporation Impulse. It can further inferred that this specific loss is mostly caused due to the non-disclosure of proper financial information of Impulse by the auditing and accounting firm King & Queen of Impulse Pty Ltd. Based on the norms and principles of auditing, it can be hereby inferred that the actions steered by the auditing firm King & Queen was immensely unethical. Consequently the auditing firm is accountable to the financing company EFL for the losses it has suffered by disbursing huge amount of loans to the company Impulse based on the financial reports of the firm (Messier Jr 2016). B.The analysis of the case study reveals the fact that King & Queen might not face legal charges based on certain condition. The independent auditing company would not face any legal charges in case if it delivered the right information concerning the financial condition of the firm Impulse to the EFL at the time when EFL asked about written explanation in quest of advice from King & Queen related to the financial condition of the firm. King & Queen had the need to provide credible financial information regarding the firm Impulse to the financing firm EFL if it had clearly written regarding their decision for disbursement of loan based on the financial announcements presented by the King & Queen. However, if EFL agreed to disburse loans to Impulse even after receiving and knowing the actual financial information regarding the company Impulse, then EFL cannot hold King & Queen responsible for the bitter consequences. However, as per the conditions stipulated under the â€Å"paragraph s (93 to 97) of â€Å"PCAOB Auditing Standard No 5†, the auditing corporation King & Queen had the need to undertake an assimilated audit of the financial announcement of the company Impulse in a bid to generate an appropriate financial statement of the firm and to declare about the real health and financial soundness of the company (Moroney et al. 2014). In addition to this, there was also need for maintenance of internal control related to the particular approach of the firm regarding auditing. The maintenance of internal control can help in delivering the direction associated to the consequent events as mentioned in the in the case study. The internal control in organization can also help in proper audit of financial reports and provide proper advice to the auditors. The right guidance to the auditing firm King & Queen can help in averting different liabilities that are associated to the different consequences of events as stated above. The auditing therefor, also needs to abide by the guidelines related to the associated to auditing standards for undertaking the practices of audit as well as their approaches of audit (Stuart 2012). The auditing firm such as King & Queen can adhere to the stipulations conditioned under the Australian Auditing Standards mentioned under the Section 336 of the Corporation Act (William Jr et al. 2016). In this case, King & Queen, the firm performing audit needs to review and audit of financial reports in addition to other financial information as per the conditions laid under the ASQC 1. In addition to this, they also need to maintain compliance with the ASA 102 that mentions the ethical obligations that need to be satisfied at the time of performance of audit, reviews as well as other types of assurance engagement of the firm (Eilifsen et al. 2013). Furthermore, the King & Queen also had the need to comply with the stipulations provided as per the section ASA 220 for maintenance of quality control of a particular audit of a financial statement together with other historical information (financial information) (Auasb.gov.au 2016). In addition to this, the auditors also need to maintain compliance with the directives mentioned under ASA240 for understanding the responsibilities of the auditors associated to fraudulent actions in a specific audit of financial declaration and take into consideration the regulations of ASA 250 for understanding the laws of auditing a financial report (Auasb.gov.au 2016). C.As rightly indicated by Glover et al. (2014), auditing independence deals with two wide aspects that can be discussed for comprehending the nature as well as characteristics of auditors. As such, there remains difference between the actual independence and perceived independence of auditing when considered in terms of appearance. Therefore, in a bid to attain goals as well as objectives of auditing, both the actual as well as the perceived independence is imperative from the viewpoint of the contributions of auditing. Louwers et al.   (2013) asserts that actual independence refers to the operations of the auditors that get impacted by the thinking potential. To put it simply, the actual independence of auditing is primarily reliant on the in dependent state of mind of the particular auditors. The state of the mind of the auditors exert considerable impact on the functioning as well as approaches of different auditors. This in turn affects the way auditors deal with particular sit uations associated to their auditing practices (Arens et al. 2012). Thus, freedom in the decision making can be observed during the time when directors of firms tries to negotiate positions of the auditors. The actual independence of auditing that depends on mental state of individuals is very difficult to enumerate. Therefore, this can be very challenging to gauge the objectivity of particular auditors. However, perceived independence of auditing can be considered as the grey area between the normal black and white aspects of the auditing and is based mainly on perceptions (Duncan and Whittington 2014). D.As rightly mentioned by Carson et al.   (2013), there are several important regulatory requirements along with auditing standards associated to the process of auditing as developed by Australian Securities and Investment Commission (ASIC). There are several directives as well as regulations stated in the regulations of ASIC that the independent auditors take into consideration for undertaking their actions (O’Donnell K. et al.   2015).    As mentioned in the first scenario, Bob has duplicated and at the same time used the financial information provided in the books of the company â€Å"Club Casino† in a bid to prepare university assignment task. Bob essentially removed the probable references that are related to the Club Casino that has the probabilities of breach of audit as Bob did not notify Clun Casino for any such kind of practices. Thus, it can be said that Bob is an independent auditor who needs to get approval from Club casino regarding the utilization and employment of financial information for satisfying the primary educational requirements. Bob also need to comply with the ethical requirement as stipulated under the ASA 102 (Auasb.gov.au 2016). Bob needs to adhere to the regulations in order to comply with ethical obligations during the performance of audit of firms. The second scenario explicates in detail the involvement of Wendy to the company Ace Limited. The company have the need for the auditor rotation as per the stipulations of ASIC. In addition, it is also imperative for the auditor to maintain adherence to the stipulations mentioned under ASA 220 Quality Control Aus A6.1 that specifies about the requirement of the auditor rotation (Auasb.gov.au 2016). The Corporation 2001 also mentions about the requirements of the rotation requirements necessary for meeting the ethical obligations of auditors (Auasb.gov.au 2016). Again, as per the guidelines of ASIC, there are several enforceable regulations for the auditors responsible for preparation as well as presentation of reports for main areas of different business actions and if the corporation is operating for more than 5 years. The third scenario refers to the assignment of Leo in the auditing procedure of organization Precision Machinery Limited. The scenario can help in comprehending the features of appointment that need to meet the capability and effectiveness levels. This is related to the quality assessment programs together with different disciplinary procedures of the professional accounting bodies. Therefore, it is important to adhere to the directives stipulated under ASA 220 for quality control of audit and assessment of quality of the particular audit evidence and ASA 510 Audit Engagement rules and regulations (Auasb.gov.au 2016). The fourth scenario indicates towards the occurrence particularly between Chan & Associates and the Classic Reproduction Pty Ltd. The present scenario refers to the application of registration requirements in the most suitable manner (Stuart 2012). Thus, it calls for the need of arrangement of full settlement actions for the particular claims related to the fees of auditing firm Chan & Associates. In addition to this, the present scenario also talks about the relation with Classic Reproductions for not fulfilling specific auditing requirements. Arens, A.A., Elder, R.J. and Beasley, M.S., 2012. Auditing and assurance services: an integrated approach. Prentice Hall. Auasb.gov.au. 2016. Auditing and Assurance Standards Board (AUASB) - Home. [online] Available at: https://www.auasb.gov.au/ [Accessed 15 Dec. 2016]. Carson, E., Simnett, R. and Vanstraelen, A., 2013, September. Auditing the auditors: An international analysis of the effectiveness of national inspection regimes on audit quality. In The University of Auckland Business School Seminar. Duncan, B. and Whittington, M., 2014, September. Compliance with standards, assurance and audit: does this equal security?. In Proceedings of the 7th International Conference on Security of Information and Networks (p. 77). ACM. Eilifsen, A., Messier, W.F., Glover, S.M. and Prawitt, D.F., 2013. Auditing and assurance services. McGraw-Hill. Glover, S.M., Prawitt, D.F. and Messier, W.F., 2014. Auditing & assurance services: a systematic approach. McGraw-Hill Education. Glover, S.M., Prawitt, D.F. and Messier, W.F., 2014. Auditing & assurance services: a systematic approach. McGraw-Hill Education. Kend, M., Houghton, K. and Jubb, C., 2014. Competition issues in the market for audit and assurance services: are the concerns justified?. Australian Accounting Review, 24(4), pp.313-320. Louwers, T.J., Ramsay, R.J., Sinason, D.H., Strawser, J.R. and Thibodeau, J.C., 2013. Auditing and assurance services. New York, NY: McGraw-Hill/Irwin. Messier Jr, W., 2016. Auditing & assurance services: A systematic approach. McGraw-Hill Higher Education. Moroney, R., Campbell, F., Hamilton, J. and Warren, V., 2014. Auditing: A Practical Approach. Wiley Global Education. O’Donnell, K., Hicks, B., Streeter, J. and Shantapriyan, P., 2015. Getting it right: directors’ assessment of information. Managerial Auditing Journal, 30(2), pp.117-131. Schmidt, P.J., Wood, J.T. and Grabski, S.V., 2016. Business in the Cloud: Research Questions on Governance, Audit and Assurance. Journal of Information Systems. Stuart, I., 2012. Auditing and assurance services: an applied approach. McGraw-Hill/Irwin. William Jr, M., Glover, S. and Prawitt, D., 2016. Auditing and Assurance Services: A Systematic Approach. Auditing and Assurance Services: A Systematic Approach. Looking for an answer 'who will do my essay for cheap',