The subtle nature of corporate collapse ensures collapses are given wide attention in news media. Whilst some funds may be recovered from various parties that include the auditors under the regulatory system we adopt in Australia, investors are going to bear a significant share of losses suffered in corporate collapses.
Choose any 2 corporate collapse companies in the year 2011-13 from ASX 200(Public Listed Companies) and answer the following questions.
1. Locate the Annual Report of both the companies and their Unmodified Audit Report. Identify the major reasons of their collapse.
2. Identify any breach committed by the Auditors under the Corporations Act 2001 and APES 110- Code of Ethics for Professional Accountants.
3. Use analytical procedures to support your financial statement analysis and identify which were the major factors in collapse companies. For example- Liquidity issues or Long term debts.
4. Investigate the current situation of the auditors of your corporate collapse companies and what is the current civil/criminalpenalty status.
5. Compare and contrast major auditor duties outlined under Corporations Act 2001 in Australia and SarbanesOxley Act2002 in U.S.
6. Record all your group discussion on assessmentand attached evidence as part of your assessment submission.
7. Use academic journals to support your answer.