Harris Scarfe Fraud Essay
ACCT20040—Auditing and Ethical Practice
Assignment 1
The collapse of Harris Scarfe----Auditing failure
Submitted by:
Due date: 16/08/2007
Word count: 3020 Table of content
Introduction 1
History of retailer Harris Scarfe 2
Audit committee of Harris Scarfe 3
Audit independence 5
Legal liability of auditors 6
Implications for the future of the Australian auditing profession 7
Conclusion 9
Reference 11 The collapse of Harris Scarfe----Auditing failure
Introduction
Recently, there are a number of corporations collapsing in Australia, including the big corporations, such as HIH insurance, One.Tel, retailer Harris Scarfe and Ansett Australia, which is a great shock to the society. The corporate governance failure causes the collapse of these corporations, which effects the current Australian corporation management including accounting …show more content…
In this case, Harris Scarfe did not effect on the independence and the audit committee is just nominally independent. The members of Harris Scarfe audit committee from 1998 to 2000 are as follows: Patten is the independent director. Trescowthick, executive Chairman, is no-independent. Hodgson, Chief Financial Officer, is non-independent.(Psaros&Seamer, 2001). Obviously, most of the members of its audit committee are non-independent, and Hodgson was from the senior management. The two auditors did not get accurate information from this audit committee, which also resulted from the poor corporate governance. Some of the directors of audit committee are also from the management, which is easier for them to conceal their illegal or unethical behavior, with the result that the internal and external auditors were restrained by the management. Under this situation, the independent guideline is not available, so that Harris Scarfe’s auditing process can not proceed
Assignment 1
The collapse of Harris Scarfe----Auditing failure
Submitted by:
Due date: 16/08/2007
Word count: 3020 Table of content
Introduction 1
History of retailer Harris Scarfe 2
Audit committee of Harris Scarfe 3
Audit independence 5
Legal liability of auditors 6
Implications for the future of the Australian auditing profession 7
Conclusion 9
Reference 11 The collapse of Harris Scarfe----Auditing failure
Introduction
Recently, there are a number of corporations collapsing in Australia, including the big corporations, such as HIH insurance, One.Tel, retailer Harris Scarfe and Ansett Australia, which is a great shock to the society. The corporate governance failure causes the collapse of these corporations, which effects the current Australian corporation management including accounting …show more content…
In this case, Harris Scarfe did not effect on the independence and the audit committee is just nominally independent. The members of Harris Scarfe audit committee from 1998 to 2000 are as follows: Patten is the independent director. Trescowthick, executive Chairman, is no-independent. Hodgson, Chief Financial Officer, is non-independent.(Psaros&Seamer, 2001). Obviously, most of the members of its audit committee are non-independent, and Hodgson was from the senior management. The two auditors did not get accurate information from this audit committee, which also resulted from the poor corporate governance. Some of the directors of audit committee are also from the management, which is easier for them to conceal their illegal or unethical behavior, with the result that the internal and external auditors were restrained by the management. Under this situation, the independent guideline is not available, so that Harris Scarfe’s auditing process can not proceed