Legal Regulation of Corporate Governance in the Role of Auditors Essay

Legal Regulation of Corporate Governance in the Role of Auditors Essay

Length: 1966 words (5.6 double-spaced pages)

Rating: Term Papers

Open Document

Essay Preview

In recent years, general public start to raise questions about the level of audit independence and the quality of audit information, especially after corporate collapses such as HIH, Enron and One.Tel where independent audit reports showed that the companies were making a profit, when in fact they were heavily in debt. This essay is to provide a brief overview of the current regulation of corporate governance in Australia in the role of auditors, and illustrate some gaps in the regulation with examples. In addition, a few recommendations are given accordingly for changes.

1. Legal Regulation of Corporate Governance in the Role of Auditors
1.1 CLERP 9 reforms
CLERP 9 reforms largely employed the law reform recommendations in the Ramsay report to address the audit independence controversy. CLERP 9 has significantly changed the way that audit work is carried out in Australia. The most significant changes were:
 Improving the standards of auditor regulation through changes to the powers of the Financial Reporting Council and the reconstitution of the Auditing and Assurance Standards board;
 Imposing statutory requirements for auditor independence and audit partner rotation; and
 Providing proportionate liability in respect of claims made against auditors.

1.2 Performing the audit
There is a distinction between the lead auditor and the review auditor. The lead auditor is primarily responsible for conducting the audit, while the role of review auditor is to review the overall conduct of the audit. It is auditor’s statutory right to access the books of the entity. Company officers must provide information and explanations that the auditors required to assist with the audit and to help auditors form more accurate a...

... middle of paper ...

...04) ‘Auditing Handbook’, Prentice Hall, Sydney.

"Audit Independence - Independence of Australian Company Auditors." Insert Name of Site in Italics. N.p., n.d. Web. 23 Apr. 2014 .

[29] section B of the Joint Code of Professional Conduct

[30] Buffini, F. (2003) ‘Andersen’s independence tested’, Australian Financial Review, 14th January, pp. 11, 12.

[31] (HIH Report, Vol III, pp 89-90)

[32] (HIH Report Vol III, pp91-92).

[33] (O’Malley 2000, p.91)

"CHAPTER 3 – EARNINGS MANAGEMENT AND FRAUD." Insert Name of Site in Italics. N.p., n.d. Web. 23 Apr. 2014 .

[34] O’Malley 2000, p.94

[35] CHAPTER 3 – EARNINGS MANAGEMENT AND FRAUD, (accessed April 24, 2014).

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Business Regulation Simulation: Alumina Inc. Essay

- Business Regulation Simulation: Alumina Inc. Alumina is a 4 billion dollar aluminum manufacturer based in the US. Although the company operates out of 8 different countries, 70% of Alumina's sales derive from the US market. Five years ago, during a regular compliance inspection, Alumina was found to be in violation of environmental discharge norms due to high levels of PAH (Polycyclic Aromatic Hydrocarbon). Following this discovery, the EPA ordered a clean up and Alumina was found to be in compliance during subsequent inspections....   [tags: Business Regulation Simulation Analysis]

Free Essays
1026 words (2.9 pages)

Convergence And International Corporate Governance Essay

- Find and summarise (in no more than 1000 words) some of the work that has been done by Katherine Pistor and others on Convergence, Divergence and ‘Path Dependency' of legal systems as it relates to International Corporate Governance. In recent years the issue of corporate governance has become a keenly debated topic in international finance. In developed countries, some of the biggest corporate collapses in history have brought about a change in focus. No longer are governments and lawmakers trying to deregulate and reduce the controls and disclosure requirements of corporations....   [tags: Corporate Governance]

Free Essays
1057 words (3 pages)

Business Regulation Simulation Essay

- Business Regulation Simulation Situation Analysis Issue and Opportunity Identification Alumina Inc. is $4 billion manufacturing company operating in eight different countries around the world with the United States accounting for nearly 70% of their sales. Based in Erehwon near Lake Dira they manufacture packaging materials for the automotive industry, bauxite mining, alumina refining and aluminum smelting. The key players of the organization are Roger Lloyd Chairman, Chris Blake COO, Diane Richards Head of Public Relations and Arthur Todd Legal Council....   [tags: Business Management Finance Analysis Strategy]

Term Papers
1947 words (5.6 pages)

Essay about Corporate Social Responsibilty

- Corporate social responsibility (CSR) involves going beyond the interests of the firm and requirements of law to involve itself social acts (McWilliams and Siegel, 2001), yet Vogel (2005) claims that regulation is required to ensure that companies comply with a standard of CSR. Unethical practices create negative images of organisations, however through adopting CSR; profitability may be increased through the positive image that society creates (Pava and Kraus, 1997). While Friedman (1970) argues that corporations are responsible for obtaining shareholder’s funds in a profitable and legal way and therefore should not engage in corporate philanthropy....   [tags: ethics, business, strategies]

Term Papers
714 words (2 pages)

Corporate Goverance: How to Help with Fraud Essays

- Agency theory, stakeholder theory, stewardship theory and transaction cost economics are the main theories that influence the development of corporate governance. The corporate governance can be drawn from a variety of disciplines and areas such as finance, economics, management, accounting rules, legal and regulatory, organization behaviours, etc. It express concerns in both internal aspects of the company (monitoring internal control & board structure) and the external aspects (eg. relationship of labour policies, role of multi shareholders and other stakeholders) besides protections of minority shareholder’s right (Claessens and Yurtoglu; 2012; Mallin, 2013)....   [tags: design, implementation, maintenance]

Term Papers
1995 words (5.7 pages)

Essay about Legal Influences on the State Board of Education

- Describe the powers and authority of the state board of education and local school boards and what responsibilities they have for the administration and operation of schools. The state board of education governs the way that education is directed within the state. They create policies covering a variety of legal issues such as health and safety, minimum requirements for teacher licensure, graduation requirements, rights of students with disabilities, and student disciplinary practices. The state school boards has six legal powers including, certification standards for teachers and administrators, high school graduation requirements, state testing programs, accreditation standards for school...   [tags: regulations, administration, legislation]

Term Papers
1137 words (3.2 pages)

Essay about What´s Corporate Social Responsibility?

- Corporate Social Responsibility Description The most widely heard question about corporate social responsibility is what it is. There have been many different definitions of CSR for the last 60 years (Madrakhimova, 2013). To some extent, from Jamali’s (2008) and Hopkins’s (2007) point of view, CSR is defined as the corporate commitments to sustainable development, ethic and responsible treatment to stakeholders, and society welfare improvement. From the 50s until present, CSR has been applied widely as the world becomes one due to the globalization....   [tags: companies, definitions, globalization]

Term Papers
1501 words (4.3 pages)

Development Comparison of Corporate Governance in Malaysia and Singapore

- The Asian Financial Crisis which exposed the corporate governance weaknesses was a wake-up call for all the policymakers, standard setters as well as the companies (OECD, 2014). The parties that involved and affected from the crisis started to realize the importance of having strong corporate governance practices in their countries. Consequently, the Asian economies along with the OECD established the Asian Roundtable on Corporate Governance in 1999, in order to support the enhancement of corporate governance rules and practices (OECD, 2014)....   [tags: asian financial crisis, hong kong,asian economy]

Term Papers
1114 words (3.2 pages)

The Concept of Corporate Social Responsibility Essay

- The Concept of Corporate Social Responsibility With the interest in Corporate Social Responsibility growing, increasing numbers of organisations are incorporating CSR into their business operations in an effort to be seen acting as good corporate citizens, so what is CSR & what is it's role in today's organizations. The term CSR refers to a company?s obligation to maximize its positive impact on society, accommodating changing social, market & stakeholder pressures in an effort to achieve sustainable economic, social & environmental development throughout its operations and activities....   [tags: Social Responsibility Essays]

Term Papers
1688 words (4.8 pages)

Essay about The Role Of Law

- The Role of Law Law is a system or collection of “principles and regulations established in a community by some authority and applicable to its people.” ( In the past, people viewed law as an unchanging factor that was a part of the natural order of life. Today, most lawmakers view law as a flexible instrument that can be used to accomplish a chosen purpose. “One strength of this instrumentalist attitude is its willingness to adapt the law to further the social good. A weakness, however, is the legal instability and uncertainty those adaptations often produce.” (Mallor, 2007) A few of the most important functions and roles of laws are to peaceably settle disputes, check gover...   [tags: Justice Crime Law Police Criminal System]

Term Papers
1039 words (3 pages)