HA3032 Corporate Governance and Impact of the External Environment

Added on -2020-02-24

| HA3032| 24 pages| 4729 words| 34 views

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Executive SummaryThis report aims to explain the concept material misstatement and their influence on theorganization. In this report, it explores the different areas of the organization namely NationalAustralian Bank (NAB).In this report, it gives the detail explanation of the nature of the industry,its operations, corporate governance and impact of the external environment that influence thefinancial statements of the company. Moreover, it is also found from the compliances andpolicies that would give the idea of the level of the material misstatement risk exists in theirfinancial records. Similarly, it is also found from the board structure and their working styleexhibits the transparency level in their operations that could assess the risk of misstatement in itsoperations. Lastly, it finds that the overall aim of the company’s assessment is to identify theinformation from the various levels of its operations and evaluate the level of risk that willimpact the company and its environment.
Table of ContentsExecutive Summary.........................................................................................................................2Introduction......................................................................................................................................4Part 1- Nature of Entity....................................................................................................................4Part 2- Understanding the Industry..................................................................................................5Part-3 Understanding legal environment.........................................................................................7Part 4- Understanding external environmental factors....................................................................8Part 5 – Objectives, strategies and business risks..........................................................................12Part 6- Ratio analysis for entity performance................................................................................15Part-7 Understand management and Governance..........................................................................17Conclusion.....................................................................................................................................20References......................................................................................................................................21
IntroductionThe overall report is based upon the assessment of the bank namely National Australian Bank(NAB) that assess the every aspect of the organization at several criteria’s like nature of theentity, industry regulations and external factors that influence the organization. Similarly, it alsoassesses the business risks and strategies arise in the operations. Furthermore, it also explains theperformance measures and monitoring of the activities of the board members. Lastly, this reportsdepict the corporate governance structure is followed by the NAB in a precise manner. Part 1- Nature of EntityBusiness OperationsThe operations of the business deals in financial services that operate in Australia and NewZealand, the business operations are also spread into the Asia, the UK, and the US. The productsof the business committed to the customers with quality product and services with fair fees andcharges (NAB, 2017).Investment and Investment activitiesThe bank invests in diverse sectors and investment activities. Presently the firm invests incommunities $48.8M in 2016 to the Australian communities and 1.8million in CSR activities.Apart from that the business invests in Technological sectors to provide effective services totheir clients (Knechel and Salterio, 2016)Financing and financing activities
The firm undertakes finance activities of A$18bn over the seven years to September 2022 toaddress the climate change requirements in future and environmental activities. The bank fairlysupports the transition to a low-carbon economy in 2016 (NAB, 2017).Financial reporting practicesThe bank's financial reports were shown in the proper format and it discloses the clearinformation to their shareholders. The firm makes the report under Banking Act1959.Accounting standards and interpretations according to Australian Accounting StandardsBoard (AASB) (Admati and Hellwig, 2014).Part 2- Understanding the IndustryA) Industry SizeThe present banking industry of Australia consists of a number of banks licensed to carry on thebusiness under the Banking Act 1959.The banking industry has grown at the rate of 13 percent inthe last decade. It indicates that a major number of players in the banking industry, holding themajor portion of financial assets.B) Industry GrowthThe strong growth in assets of the banking system has occurred at the same time the stock of thehousehold savings in banks increased significantly. The growth of the banking sector is 27% in2016 as compared to previous year, due to increase in foreign funding and assets ownership(Cohn, Fehr and Maréchal, 2014).
C) Industry Supply ChainDue to increase in competition in the banking industry, the supply chain is strong and diverse forAustralian Banking system. The reduction proportion of wholesale deposits, the capital adequacyis maintained and major players focus on selected credit opportunities and reduce unsecuredretail portfolio.D) Major playersCurrently, the major banking players in the Australian market are Westpac Bank, Bendigo Bank,ANZ Bank, Sun Corp Bank and AMP Bank Ltd which holds the major financial market(Taleghani, Gilaninia and Mousavian, 2011).E) Market Shares of Industry players(Source: Australian Broker, 2017)

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