Reflective Statement

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Reflective Statement

This poster shows a clear link between lack of independence and the probability of accounting
scandals, and how FRC has improved its ethical standards to safeguard independence of the auditors. In
this case, Tesco, one of the leading retailers in the UK, was caught up in an accounting scandal where it
was accused of inflating its half-year performance. Inflation of financial performance is perhaps the
most common accounting scandal. Under pressure to post impressive financial performance most
executives results to manipulation of financial records posting inflated. This is mostly due to the fact
that their continued tenure in office is pegged on the financial performance of the organisation.

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Description

SUMMATIVE ASSIGNMENT

The summative assignment contributes to the initiative by Audit Futures into
the use of philosophy for accounting to develop the critical thinking of the
accounting professional and to explore the role of the accountant more
creatively. This sits within the Audit Futures aims which include the desire to
inspire collaborative innovation and constructive dialogue about the role of
audit and the accountancy profession in 21 st century society.

Dissatisfaction with audit continues with a number of high profile firms under
investigation initiated in 2017 by the Financial Reporting Council ( see Deloitte
LPP – Mittie Group Plc; PWC LLP – BT Group Plc; KPMG LLP – Rolls Royce
Group LLP) This would seem to indicate that the responses by the audit
profession and the audit regulators may not be resolving the auditor
expectation gap. These investigations focus on the performance of the audit
rather than the nature of audit itself but do show that there is a problem with
the role of audit in 21 st century society.

Required:

AUDIT FUTURES
What we believe in

Audit is a service designed to provide form and structure to trust-building in
business and society. It is an exemplary social dialogue and co-creative activity
that combines inquiry, integrity and professional commitment to serve the
interests of the public.
Serving Society
Audit, as a service, was designed to build trustworthy relationships between
investors and companies. Accountancy can be a supporting and enabling
framework to solve social challenges and the profession should reach out to
wider stakeholder groups to understand and match their needs and wants.
Fostering Trust
Trust in business and institutions is at its lowest ebb and the wealth and
prosperity of modern societies need trust for building new relationships and
social capital.[The profession] should determine its own fate, take responsibility
for fostering public trust in business and embark on a new journey towards a
more successful, fairer and trust-rich society.
Audit Futures (2015) Radical Thinking, Collaborative Action ICAEW
TECPLN1408307/15

Investigate and identify the cause of ONE recent auditing scandal and
critically evaluate the success of ONE initiative by either the accounting firms,
the accounting profession or the accounting regulators in resolving THIS
problem.
Submission Format:
Poster 75%
Summarise your conclusions on an A4 Poster (in electronic format) supported
by any relevant appendices and references in a separate document.

Reflective Statement 25%
500 words
Explore and reflect upon how your research into these issues, your formative
discussion and the discussions in the Accounting Forum have informed and
changed your view on the importance of ethics in safeguarding the public
interest.

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Reflective Statement

This poster shows a clear link between lack of independence and the probability of accounting
scandals, and how FRC has improved its ethical standards to safeguard independence of the auditors. In
this case, Tesco, one of the leading retailers in the UK, was caught up in an accounting scandal where it
was accused of inflating its half-year performance. Inflation of financial performance is perhaps the
most common accounting scandal. Under pressure to post impressive financial performance most
executives results to manipulation of financial records posting inflated. This is mostly due to the fact
that their continued tenure in office is pegged on the financial performance of the organisation……

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