Below is an extract of a letter written by Lee White (General Manager of Leadership and Quality — Institute of Chartered Accountants in Australia) which was published in the Australian Financial Review.

Your ‘Regulator to crack down on auditors’ (June 2) article implies that the external auditing process should safeguard against corporate collapses.

Moreover, it suggests the quality of financial reporting and auditing in Australia is less than satisfactory. This is incorrect. Some do see audit as a guarantee to prevent poor management behavior, bad business decisions or ultimately corporate failure. It is none of these. An audit enhances the accountability or corporate stewardship to its shareholders. Let's be clear — a corporate failure does not equate to audit failure.

Required

Describe what Lee White means when he refers to what an audit does.