Question 1. – Do only one part Since the demise of Arthur Andersen and the passage of the Sarbanes-Oxley Act of 2002 the profession has witnessed an almost unprecedented increase in the frequency of auditor switching. Explain the causes and consequences

Semester 2 2014

ASSIGNMENT

This assignment is to be completed in groups of three and comprises twenty per-cent of the marks for this course. There are 4 questions to discuss – each is worth 5 marks. 500 words each.

Assessment Criteria:

Student work will generally be assessed in terms of the following criteria:

1. Effectiveness of communication - ie readability, legibility, grammar, spelling, neatness, completeness and presentation will be a minimum threshold requirement for all written work submitted for assessment. Work that is illegible or incomprehensible and does not meet the minimum requirement will be awarded a fail grade.

2. Demonstrated understanding - This will be evidenced by the student's ability to be dialectical in the discussion of contentious issues.

3. Evidence of research - This will be evidenced by the references made to the statutes, auditing standards, books, journal articles and inclusion of a bibliography.

Note:

1. All written work must conform with the Federation University General Guide for the Presentation of Academic Work.

2. For all written work students must ensure that they submit their own original work. Any act of plagiarism will be severely penalised.

Plagiarism is presenting someone else work as your own and is a serious offence with serious consequences. As set out in the University Regulation 6.1.1, students who are caught plagiarising will, for a first offence, be given a zero mark for that task. A second offence will result in a failing grade for the course(s) involved and any subsequent offence will be referred to the Student Discipline Committee. Student must be aware of the University Regulation 6.1.1 Student Plagiarism.

Students must:

fully reference the source(s) of all material, even if you have re-expressed the ideas, facts or descriptions;

acknowledge all direct quotations; and

not submit work that has been researched and written by another person.

Question 1. – Do only one part

Since the demise of Arthur Andersen and the passage of the Sarbanes-Oxley Act of 2002 the profession has witnessed an almost unprecedented increase in the frequency of auditor switching.

Explain the causes and consequences of this shift.

Has there been a shift in the audit fee patterns of the big four and non-big four auditing firms over the last 10 years?

Question 2.

The audit report has transitioned over the years from a unique narrative for each engagement to a more standardised template.

Discuss

Question 3.

Since the demise of Arthur Andersen and the passage of the Sarbanes-Oxley Act of 2002 there has been ongoing debate as to mandatory audit firm rotation and partner signing.

Discuss the reasons for and against.

Question 4.

What is 2 + 2

Engineer – “It lies between 3.98 and 4.02.”

Mathematician – “In 2 hours I can demonstrate it equals 4 with the following proof.”

Physicist – “It’s in the magnitude of 1-10!”

Social Worker – “I don’t know the answer, but I am glad we discussed this important question.”

Attorney – “In the case Smith vs State, 2 + 2 was declared to be 4.”

Trader – “Are you buying or selling.”

Accountant – “What would you like it to be?”

Discuss accounting and auditing in terms of the seven perspectives.