|Group Assessment Details and Submission Guidelines|
|Unit Title||Audit, Assurance and Compliance|
|Assessment Type||Group Assignment and Group Video Presentation|
|Assessment Title||Auditors and Legal Liability|
|Purpose of the assessment (with ULO Mapping)|
Students are required to research a recent legal case where an Audit firm was sued for professional negligence. Students are required to analyse the root causes and the pertinent issues from their selected case and then specify what measures can be taken by auditors in the audit approach and in other ways, to minimise the risk of litigation and ensure professional integrity and reputation.
|Weight||30% of the total assessments|
|Word limit||Maximum 3,000 words|
This assignment aims to enhance students’ critical thinking skills and higher order application abilities by researching and analysing a legal case involving the litigation of an auditor/audit firm. Students will need to propose and document mitigating measures to address the risk of litigation and make appropriate recommendations to the audit approach, in terms of the audit strategy adopted, the audit procedures required in the audit program and other appropriate ways for the auditor to mitigate against both professional reputational damage and financial losses.
The assignment structure must be as follows:
Assignment Topic – Auditors and Legal Liability
Read the following extract from the ACCA (the Association of Chartered Certified Accountants) website, which is the global body for professional accountants, as stated:
“Over the past two decades the bill for litigation settlements of Big Four audit firms alone has run into billions of dollars. Examples include Deloitte’s 2005 settlement of $250m regarding its audit of insurance company Fortress Re and PwC’s $229m settlement in the lawsuit brought by the shareholders of audit client Tyco in 2007.”
“Auditor liability is increasingly concerning, both in terms of audit quality and the reputation of the profession but also in terms of the cost to the industry and the barriers this creates to competition within the audit market.”(Source: www.accaglobal.com )
Given the importance of professional liability to auditors and the negative publicity this creates for the profession as a whole, research a recent case (Post 2000) where an auditor/audit firm was sued for professional negligence. Students may research cases from the UK, USA, NZ or Canada in addition to Australian cases.
With reference to the facts of the selected case, the significant Auditing and Accounting issues and the final judgement handed down in your selected case:
which would prevent the recurrence of the same litigation in the future and maintain the professional reputation of auditors.
Resources and Reference Links:
Students are required to work on the assignment in groups of 4 - 6, produce a group report and a short video presentation of approximately 10mins. Group membership will need to be communicated to the local campus lecturer in writing to the session lecturer by week 6.
Both assessment items must be submitted on Blackboard. The written assignment must be in a report format and submitted through safe-assign prior to final submission. The originality percentage should be as low as possible. The written submission must be double-checked, edited and rephrased if the originality percentage and plagiarism risk is noted as high, as per safe-assign.
Students must use power-points slides with clear dot-points, noting the key information. The video presentation should be considered a professional business presentation, which would be viewed by colleagues in the Auditing profession. All students in the group must participate in the video or marks will be deducted. Video presentations should not exceed the 10mins time limit or marks will be deducted. Impressive video presentations may be played in class provided that consent is given.
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