Question

The individual assignment aims to give you an understanding of real-life auditing issues and an appreciation of the link between theory and practice. It further aims to foster your research, critical analysis and communication skills. Your essay should cover the following: The WorldCom collapse in the USA raised several issues with regard to Auditor Independence. a) discuss three audit issues (such as independence, due diligence and valuation) that arose during the WorldCom collapse b) critically discuss the relevance (if any) of the developments following WorldCom (for example the Sarbanes-Oxley Act) to Australian Auditors.Students must reference at least 8 academic journals (and 2 or more newspaper or professional accounting magazine articles), applicable audit standard(s). Students should also identify any other standards or references to the Code of Ethics for Professional Accountants, which should have enabled the auditor(s) to identify and address the problems in the WorldCom Audit. Less than 10 references will be considered insufficient.

Answer 1

as we all know that auditing plays a vital role in making sure the financila stability and keeping faith of the stakeholders of an organization.it helps to improve the company's internal controls and systems.with the help of audit even any small details missed by the system can be found with the audit.it is highly preferable to hire an external audit expert so their report would be more authentic and major adnavtages of conducting regular audits reflects that you are accoutable and gives confidence to your clients.you also get to know where the business are going smoothly and also you can find where it requires a bit tightening.condutcing regular audits is indirectly related to the trustworthiness of your company or business.whilw coming to worldcom, it was a major telecommunications company based in USA,it happened to be not just the biggest accounting scandal in history of united states but also biggest bankruptcies of all time,As days gobe , it became synonym for accounting fraud and warning to all the investors.gven the events took place, the importance of independent audit has risen it stock and more and more business opted for independence audit as it is more impartial, unbiased free frm any influence and audit opinion will not be influenced by any relationship between them.as years gone by, due diligence started to become more and more relvant as it includes the process of verification, investigation or audit of a potential deal or investment oppurtunity.people may think that both audit and due dligence are of sae but no, bcoz audit is just focused on company's finances where as due diligence is primarily focused on finances in addition to that it involves comprehensive examination of a company's legal, tax. operational and property matters as well which were not exercised in the case of world com.anothe thing that helps to have a proper audit is the valuation.it is nothing but the estimation of various assets and liabilites the auditor should make sure that assets and liabilities appearing in the balance hseet exhibiting hheir proper and correct value, if not they will exhibit either overvalued or under valued.also can be used to find out the ownership and the title of the assets.

The Sarbanes-oxley act is a US federal law formed as a result of major accouting scandals and the a ount of money lost due to various financial disaters.its main aim is to protect investors by making corporate disclosures more reliable and accurate.it applies to all publicly traded companies in the united states and foreign companies that are publicly traed and do business in the united states.with this act the audit fees in australia has been gradully incresed and the auditors need to comply all the rules set by that one,below are the various academic auditing journals

journal of accounting and economics

accounting horizons

contemporary accounting research

review of accouting studies

journal of accoutning and public policy

critical perspectives an acccouting

journal of business ethics

european accounting review

here you can see five codes of ethics

integrity

objetcivity

professional competence

confidentiality

professional behaviour