Abstract
‘Australia's current financial reporting framework is recognised as amongst the world's best, but this obviously did not and cannot offer immunity from corporate failure’. There are numerous individual factors that can have and are having an impact on the reporting framework and should be addressed. Specifically, the auditor's role is to add credibility to the financial reports prepared and signed off by the company's directors and to provide a high level of assurance that the financial reports are free from material misstatement. Auditors may be unfairly or harshly judged for not foreseeing the collapse and warning the market and shareholders. In some instances there are clear cases of complacency on the auditors' part or outright negligence on the part of the auditor. The HIH Insurance collapse in 2001 has significantly influenced the audit profession, especially in the area of audit independence, audit committee and the legal liabilities of auditors and this case leads to a number of lessons that need to be learnt regarding the audit profession and the responsibilities of auditors.
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3holds an accounting degree from Central Queensland University and has research interests in ethics and independence in the Australian auditing profession and Australian taxation system.
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Mirshekary, S., Yaftian, A. & Cross, D. Australian corporate collapse: The case of HIH Insurance. J Financ Serv Mark 9, 249–258 (2005). https://doi.org/10.1057/palgrave.fsm.4770157
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DOI: https://doi.org/10.1057/palgrave.fsm.4770157
Keywords
- banking
- customer relations
- e-business
- e-commerce
- financial brokers
- financial engineering
- financial institutions
- financial marketing
- financial models
- financial planning
- financial training
- insurance
- intermediation
- knowledge management
- management
- marketing
- marketing strategy
- pensions
- services quality
- virtual organisations
- corporate collapse
- audit independence
- auditor negligence
- legal liability
- audit committee
- reputational effects on accountants