Auditing Litigation and Claims: Conflicts and the Compromise of Privilege
Auditing standards require an auditor to make various enquiries about liabilities in general this may entail consideration of potential litigations and claims that the audited entity may be facing. To perform this part of audit, the auditors will generally seek representation letters from lawyers...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
University of Wollongong
2013-12-01
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| Series: | Australasian Accounting, Business and Finance Journal |
| Subjects: | |
| Online Access: | http://ro.uow.edu.au/aabfj/vol7/iss4/2 |
| _version_ | 1819067978299211776 |
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| author | Harleen Kaur Sandra van der Laan |
| author_facet | Harleen Kaur Sandra van der Laan |
| author_sort | Harleen Kaur |
| collection | DOAJ |
| description | Auditing standards require an auditor to make various enquiries about liabilities in general this may entail
consideration of potential litigations and claims that the audited entity may be facing. To perform this part of
audit, the auditors will generally seek representation letters from lawyers of the company detailing an estimate
prepared by management, confirmed by their lawyers through a representation letter, and then sent directly to
the auditors.
This paper reviews the implications for the auditing profession of a case that involved auditors seeking such
representation letters. The case involves litigation between theWestpac Banking Corporation and 789TEN Pty
Ltd. While theWestpac case confirmed the legal position of the auditor in their task of collecting evidence in
order to form an opinion in Australia, it highlights a significant anomaly under the law and should place the
issue of solicitor’s representation letters as audit evidence firmly on the agenda of policymakers.
This issue of the compromise of legal privilege during the conduct of an audit is also not confined to Australia:
other common law jurisdictions, such as the UK and the US, have also sought to clarify the position of
auditors when issues of the integrity of legal privacy privilege arise. |
| first_indexed | 2024-12-21T16:26:50Z |
| format | Article |
| id | doaj.art-03a67bbe53dc4e2fa4210e4dc02b7aee |
| institution | Directory Open Access Journal |
| issn | 1834-2000 1834-2019 |
| language | English |
| last_indexed | 2024-12-21T16:26:50Z |
| publishDate | 2013-12-01 |
| publisher | University of Wollongong |
| record_format | Article |
| series | Australasian Accounting, Business and Finance Journal |
| spelling | doaj.art-03a67bbe53dc4e2fa4210e4dc02b7aee2022-12-21T18:57:26ZengUniversity of WollongongAustralasian Accounting, Business and Finance Journal1834-20001834-20192013-12-0174316http://dx.doi.org/10.14453/aabfj.v7i4.2Auditing Litigation and Claims: Conflicts and the Compromise of PrivilegeHarleen Kaur0Sandra van der Laan1University of SydneyUniversity of SydneyAuditing standards require an auditor to make various enquiries about liabilities in general this may entail consideration of potential litigations and claims that the audited entity may be facing. To perform this part of audit, the auditors will generally seek representation letters from lawyers of the company detailing an estimate prepared by management, confirmed by their lawyers through a representation letter, and then sent directly to the auditors. This paper reviews the implications for the auditing profession of a case that involved auditors seeking such representation letters. The case involves litigation between theWestpac Banking Corporation and 789TEN Pty Ltd. While theWestpac case confirmed the legal position of the auditor in their task of collecting evidence in order to form an opinion in Australia, it highlights a significant anomaly under the law and should place the issue of solicitor’s representation letters as audit evidence firmly on the agenda of policymakers. This issue of the compromise of legal privilege during the conduct of an audit is also not confined to Australia: other common law jurisdictions, such as the UK and the US, have also sought to clarify the position of auditors when issues of the integrity of legal privacy privilege arise.http://ro.uow.edu.au/aabfj/vol7/iss4/2representation lettersWestpac Banking Corporationlegal privilegeAuditing standards' liabilities |
| spellingShingle | Harleen Kaur Sandra van der Laan Auditing Litigation and Claims: Conflicts and the Compromise of Privilege Australasian Accounting, Business and Finance Journal representation letters Westpac Banking Corporation legal privilege Auditing standards' liabilities |
| title | Auditing Litigation and Claims: Conflicts and the Compromise of Privilege |
| title_full | Auditing Litigation and Claims: Conflicts and the Compromise of Privilege |
| title_fullStr | Auditing Litigation and Claims: Conflicts and the Compromise of Privilege |
| title_full_unstemmed | Auditing Litigation and Claims: Conflicts and the Compromise of Privilege |
| title_short | Auditing Litigation and Claims: Conflicts and the Compromise of Privilege |
| title_sort | auditing litigation and claims conflicts and the compromise of privilege |
| topic | representation letters Westpac Banking Corporation legal privilege Auditing standards' liabilities |
| url | http://ro.uow.edu.au/aabfj/vol7/iss4/2 |
| work_keys_str_mv | AT harleenkaur auditinglitigationandclaimsconflictsandthecompromiseofprivilege AT sandravanderlaan auditinglitigationandclaimsconflictsandthecompromiseofprivilege |