The consequence of the auditor`s legal liability because of negligence is that the auditor can choose whether to violate the auditing standards or comply with them (rothenberg 2020, p1(2)). In freedom foods group limited, deloitte violated the auditing standards by devising an audit strategy to help the group`s management commit fraudulent financial reporting (accountantsdaily.com.au 2022). Freedom foods group limited has brought key changes in its corporate governance in the post-accounting-scandal period. These changes are discussed below:
All these changes aim to ensure that proper governance is established over the financial reporting framework of the group, which is key to preventing any financial reporting fraud by the collaboration between the senior management and external auditors. These changes also ensure that the external auditor is not negligent in his/her work.
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