Woodside Petroleum is one of the top 50 listed companies on total assets in ASX, and its main business segment is oil and gas, with variety of projects related to oil and gas not only in Australia, but also global market. One of Woodside's joint venture project is North West Shelf (NWS), accompanying with other leading resources companies in Australia and international origin, such as BHP Billiton Petroleum, BP, Chevron Australia, Japan Australia LNG and Shell. In 2016, a report related to the calculation of royalties in the NWS project disclosed that Woodside's auditing employees applied wrong calculation procedures of royalties in order to realize the tax reduction target. This essay will reflect on the Corporations Act 2001 and related journal articles to explain how the behavior of Woodside's audits was against the auditing standards and code of ethics for professional accountants.
The issue of NSW royalty calculation attracted the attention of many media institutions, since the problem of tax reduction through royalty calculation existed in the Australian resources industry for no short time. Perpitch (2016) disclosed the detail of the royalty calculation problem of NWS project, which related to as high as $5 billion royalty deduction. Australian National Audit Office (ANAO) published a report to challenge the practice of royalty deduction in the NWS project. During the period of July 2014 and December 2015, NWS project reported total of $19.7billion revenue from selling oil and gas product, while the total number of royalties during the same period was $1.9 billion, shared by the Federal Government ($600 million) and Western Australia ($1.3 billion).
最后在conclusion的部分进行全文的总结，本文就审计总署署长Grant Hehir披露Woodside通过降低版税来偷税漏税的行为进行了反思。 这些问题还在继续，Hehir将会继续调查审计程序，只有官方审计人员才有避免利益和期望之间冲突的能力。
This essay reflected on the issue that Auditor General Grant Hehir disclosed the behavior of Woodside joint resources project NSW on shrinking tax bills through royalty reduction. The auditors of Woodside were related to the conflict of interest situation, since Ernst & Young also cooperated Woodside on preparing the financial accounts and annual report of the project. Auditors' expectation gap was highly related to performance gap and reasonableness gap, since auditors have little knowledge about the resources industry, and the auditor firms (Ernst & Young) failed to stick to the principle required by Corporations Act 2001 and code of ethics, and they could also find out excuses for their performance in auditing NSW project. This issue is still undergoing and Mr. Hehir will continue to investigate the auditing procedure of NSW project in the next year, and only official institution auditors have this capability to avoid conflict of interest and expectation gap.