ACCT613 Auditing And Assurance :Topic 1: The Expanding Role Of The Auditor


ACCT613 Auditing And Assurance :Topic 1: The Expanding Role Of The Auditor

Topic 1:  The Expanding Role Of The Auditor  

You have been approached by Alex Wilson, the president of your local CPA Australia branch, to prepare a report on the current state of Corporate Social Responsibility (CSR) and Sustainability reporting and assurance. The report is to focus on Australia, the European Union (EU) and the United States of America (US) in particular. The final report is to be disseminated to attendees at the upcoming regional conference on ‘New Directions in Accounting’. You have also been asked to present a five-minute summation of your findings and answer questions from the attendees.  


Prepare a report that incorporates the following:

1. A definition and explanation of Corporate Social Responsibility (CSR) and sustainability reporting.

2. An explanation of similarities and differences between CSR and sustainability reporting.

3. A brief history of sustainability reporting and assurance. 

4. Current details on which companies undertake such reporting and level reporting that is assured, and who is providing the assurance service.

5. Future developments in the area of sustainability reporting and assurance.

6. The frameworks, guidelines and/or standards used for the preparation of the reports, including the bodies responsible for these.

7. The assurance guidelines and procedures the auditor can use for structuring and completing assurance engagements. 

Topic 2:  Auditor Independence

You are an audit manager working for Chase and Fearnley, a mid-tier professional services firm.  The senior audit partner has asked you to review the independence requirements of up-coming engagements and assess the following potential independence issues:

Client: Baxter Aviation Limited (BAL)

BAL recently became the largest regional air freight business in the Eastern states, after acquiring the businesses of its main competitors in Victoria and Queensland. The audit committee chair of BAL recently approached Chase and Fearnley to take over the role of the company’s external auditor, as the audit committee do not believe their current auditor has the capabilities to continue auditing the company following its expansion. During the interview with audit partner, Craig Edge, the audit committee chair also asked Chase and Fearnley to take over some non-assurance services. BAL would become Chase and Fearnley’s single largest client by revenue and significantly enhance its profile in the professional services industry.

Client: Max Maxim Global Limited (MMG)

MMG is a global online clothing retailer that operates in over 90 countries. Emily Matthews, an audit senior at Chase and Fearnley with extensive experience in information technology (IT), was temporarily contracted to MMG to facilitate the implementation of their new e-commerce computer program. Emily has now been assigned to the annual audit of MMG because of her familiarity with their complex IT system.

Client: Granger Freight Services Pty Ltd (GFR)

The audit of GFR is due to commence in the next two weeks. However, Chase and Fearnley is owed money for audit and other assurance service provided to the company in 2017 and 2018. Chase and Fearnley have been in regular contact with GFR but $462,000, substantial for the firm, is still outstanding.  

Client: Wilcox System Solutions (WSS)

WSS, a long-term audit client, is being sued by another company for a patent breach. The court has ruled that the two parties are to attempt a mediation process before legal proceedings continue. WSS CEO, John Andrews, has approached David Whales, one of Chase and Fearnley’s audit managers, to attend the mediation meeting as a negotiator alongside their existing legal representative. John and David have been friends for many years, which is how Chase and Fearnley initially acquired WSS as a client. David is not involved in the annual audit of WSS.


Prepare an internal memo to the audit partner with an assessment of each position that covers:

  1. The potential independence threat(s).
  2. How the threat(s) can be eliminated.
  3. Recommend whether BAM Pty Ltd should continue with or decline the audit. That is, can the independence threat(s) be removed or reduced to an acceptable level.

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