Audit Assurance and Compliance Impulse Pyt Ltd

Question: Discuss about the Audit Assurance and Compliance for Impulse Pyt Ltd. Answer: Introduction: King Queen being the auditor of Impulse Pyt Ltd is only liable for comment provided on the audit report. In addition, the auditor mainly provided unqualified comment on the audit report prepared by the company. The auditors are mainly responsible for checking the overall liability and assets valuation conducted by the company in their financial report. Christensen, Glover and Wood (2012) argued that after the 2008 auditor were presented with liability limitation agreements (LLAs), which helped in reducing the overall threat of litigation from clients. In addition, the LLAs mighty help in protecting the King Queen from the legal suit charged by EFL. Sandberg et al. (2016) stated that relative liability disclosure mainly saves auditors from claims and increases the probability of manipulation, which might be present in companies financial report. Relative case like Enron, Lehman, WorldCom, and Dick Smith has not attracted any kind of legal suit against the auditing companies. The auditors are mainly fined significant amount, which are received by appropriate regulatory and wounded investors. Anderson et al. (2012) argued that loopholes provided to the auditors mainly increase the chance of unethical measures, which might be conducted by the company to inflate their financial condition. The current scandal that was conducted by Dick Smith was portraying wrong valuation of their inventory, which was authorised by the auditors (NewsComAu 2016). However, the auditors are not liable and the third party nerds to confirm the financial position of the company. Determining if EFL is relying on the 2012-audited financial report to assist them in making their decision: The whole scenario will be changed if EFL contacted King Queen before, relying on the overall 2012 audited report. The auditing company in that scenario will be liable for the suit, which might be presented to them, as EFL needed advice and wrong advice was provided. This might attract high-end lawsuit and the auditing company has to pay the damages, which are incurred by the company. Lad and Dahl (2014) mentioned that Goldman sacks were liable to pay back the money lost by their investors based on wrong advice. On the other hand, Brawley et al. (2015) criticises that due to increasing regulation in favour of auditors reliability of the auditor financial report loses its overall friction. Moreover, if EFL have consulted with King Queen before providing Impulse with relative loan might help the company in strengthen its law suit. Furthermore, the manipulations, which were conducted by Impulse Company, might be identified by King Queen as EFL was seeking consultation advice. In addition, this might also had helped the EFL in identifying the accurate value of inventories and ability of the company to pay its obligations. Melidis et al. (2014) argued that with the help of identified loopholes in the accounting system like prudence are mainly used by company for valuing the companies inventories based on market price. Thus, the whole scenario would be changed if the company had conducted the auditors or used any third party valuation company to detect the accurate financial condition of Impulse Company. Defining and explaining importance of each, actual and perceived independence: Actual and perceived independence is mainly a nature of behaviour, which is used by the auditors in conducting the auditing report. Shah and Nair (2013) argued that companies with the help of lucrative offers are able to change the perspective of auditors in conducting the auditing report. Moreover, relative definition and significance of independence are depicted as follows. Actual independence: Actual independence is mainly depicted as the full control and access is provided to the auditors in detecting the financial position of the company. The main significance of the actual independence is to increase trust of the company with its shareholders. In addition, auditors with actual independence is able to take viable decisions regarding audit procedure and report, which help in improving authenticity of the auditors report. Knechel (2016) mentioned that full access of auditors to the overall financial records mainly help investors to make adequate investment decisions. Perceived independence: Perceived independence is mainly viewed as the behaviour of external auditors, who evaluate the financial position of the company. In addition, the perceived independence is mainly helpful for the auditors to detect the overall financial condition of the company. Graham (2015) stated that perceived independence of auditors mainly help in detecting the unethical measure taken by the company. On the other hand, Melidis et al. (2014) criticises that perceived independence sometimes hamper the overall auditing procedure and misdirects the auditors. Listing professional standards and regulatory requirements breached for each independent situations: Auditing regulation have different requirement for certain scenarios, which might help in depicting the relative breach. In addition, these guidelines mainly help in authenticating the audit procedures, which is been used by the auditors and individuals. The first situation mainly states the overall disclosure conducted by Bob on the financial condition of Club Casino. This situation mainly states the auditing breach, which has been conducted by Bob in publish the financial potion of the company, without its prior consent. Shah and Jarzabkowski (2013) cited that disclosure rule of auditing mainly prevents the auditors from cooking or analysing the books of companies without the approval. The second situation mainly provides the companys involvement of rotational auditor, which is mainly allowed by Australian Securities and Investments Commission (ASIC). Thus, the guidelines provided by ASIC mainly states that auditors rotation is allowed, which is mainly used in the auditing report. Knechel (2016) stated that rotational auditing system mainly help in reducing the unethical measures, which might be conducted by the company. The third situation mainly depicts the involvement of Leo in the auditing procedure conducted by the company. In addition, the nature of the appointment is mainly conducted to increase the overall efficiency, quality and disciplinary of the auditing body. The fourth situation mainly depicts the non-payment of auditing fees by Classic reproduction pty to Chan Associates. In addition, Chan Associates could withdraw their consent regarding financial position of the company. Reference: Anderson, U.L., Christ, M.H., Johnstone, K.M. and Rittenberg, L.E., 2012. A post-SOX examination of factors associated with the size of internal audit functions.Accounting Horizons,26(2), pp.167-191. Brawley, S., Clark, J., Dixon, C., Ford, L., Nielsen, E., Ross, S. and Upton, S., 2015. History on trial: Evaluating learning outcomes through audit and accreditation in a national standards environment.Teaching and Learning Inquiry: The ISSOTL Journal,3(2), pp.89-105. Christensen, B.E., Glover, S.M. and Wood, D.A., 2012. Extreme estimation uncertainty in fair value estimates: Implications for audit assurance.Auditing: A Journal of Practice Theory,31(1), pp.127-146. Graham, L., 2015.Internal Control Audit and Compliance: Documentation and Testing Under the New COSO Framework. John Wiley Sons. Knechel, W.R., 2016. 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