ACCT2004 - Auditing & Internal Controls - Professional, Legal and Ethical Requirements - Accounting & Finance Assignment Help

Assignment Task

Learning Outcomes

1. Explain the professional, legal and ethical requirements and responsibilities of auditors and explore the significance of audit quality.
2. Illustrate an understanding of the audit process including risk assessment, response to assessed risks and audit reporting requirements.
3. Demonstrate an understanding of assurance engagements other than historical financial information and investigate the relevance of such engagements in the contemporary business environment.

Context:
This assessment helps in understanding following key areas of auditing and internal control:
• Understanding the professional, legal and ethical requirements and responsibilities of auditors in the current business environment.
• Application of the fundamentals for audit planning, audit risk and materiality.
• Understanding of assurance engagements other than historical financial information and investigate the relevance of such engagements in the contemporary business environment.

Essay Topic:
ABC Learning Centre, a childcare centre operator located in Queensland which owned and operated several childcare centres in Australian and around the world. The company filed for insolvency in 2008. The auditor was suspended for 5 years after signing off on ABC Learning 2007 Annual Report.

Please review the following articles.

https://www.abc.net.au/news/2012-08-08/auditor-suspended-over-abc-learning- report/4185408 and

https://www.smh.com.au/business/five-year-suspension-for-former-abc-learning-auditor- 20120808-23uj8.html

Answer the following questions -

Question 1
In 2008, Ernst & Young (EY) re-audited ABC Learnings 2007 Annual Report, what were the main findings and how did these findings relate to risk assessment and audit planning?

Question 2
What losses were suffered by the shareholders of ABC Learning after its collapse? Were the shareholders able to pursue any legal action against the auditors because of the collapse?

Question 3
Please review the 2007 audit report, did the ABC Learning and the auditors produce an appropriate auditors’ report for the year ending June 2007 considering the above
allegation? If you answered no, the auditors of ABC Learning did not produce an appropriate auditor’s report, discuss what further information should have been disclosed to stakeholders.

Question 4
Present an argument into the outcome of the ABC Learning case and any action taken by the regulators, including ASIC. How might these changes or recommendations stop other corporations experiencing a similar outcome to ABC Learning?

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