In Australia one of the biggest collapse has been Harris Scarfe Limited with debts of $265

million . In the beginning of 2000s the collapse of OneTel, HIH Insurance and Ansett
Australia also happened within that same timeframe (Kavrar and Yılmaz, 2017). The
consequences of these collapse had a negatively affected the accounting profession in
Australia as such there has been implementation and improvements in the accounting bodies
and accounting regulations. This essay will be evaluating the pronouncements of the
Australia professional accounting bodies and regulation that were implemented after the
collapses of the business in the early 2000s. Thereafter, the essay will discuss if the auditors
role and duties has improves through the implementation in the accounting standards and
regulation. In addition to this, the essay will also elaborate to what extent the auditors should
be liable for the accounting to misstatements. Lastly the essay will focus on the strengthens
and weaknesses in the current regulation together with the recommendation to strengthen to
maintain and improve the auditors role and duties in safeguarding the integrity of the
financial statements.

A number of regulations were implemented by the Australian professional accounting body

following the corporate collapse in the early 2000. The Corporate Law Economic Reform
Program Act 2004 (CLERP 9) was implemented by the accounting bodies to restructure the
integrity in audit by stressing on the role of auditor independence and audit function. The
corporate scandals in the early 2000 were mostly due to the lack of auditor independence. For
example, in the Enron scandal, the auditors failed to notice the financial fraud and allowed
Enron Ltd to cover up its fraud.

A major reform of the Australian government to strengthen independence was rotation

requirements, auditor requirements, and non-audit services for clients. Auditors who remain
for a long period of time with the client could become a threat to independence as auditors
could develop an unsuitable relationship with the client. Thus, according to CLERP 9
auditors cannot audit a listed company for a period of five successive years and must be
rotated.