Assessment of AMP Bank's Financial Performance and Ethical Conduct

This study focuses on AMP Bank and its financial performance, ethical conduct of auditors, sustainability practices, and audit report. It evaluates the conduct of auditors with reference to the APES framework and the purpose of the audit. The study also assesses the stewardship, common good, and social responsibility practices of the company.

Running head: AUDITING & ASSURANCE SERVICES
Auditing & Assurance Services
Name of the student
Name of the University
Author Note

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Executive Summary
The purpose of this study is to focus on the company AMP bank and make an assessment
regarding the financial performance .It also aims to study the conduct of auditors with reference
to the APES framework . It also tries to view the suatainability practices o the comaony with
reference to stewardship, common goal and prociding a sustainable report in their business.It
also asseses the audit report of the opinin and make references to the purpose of the audit.

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Table of Contents
Introduction......................................................................................................................................2
Evaluating AMP Limited’s financial performance..........................................................................2
Ethical performance of accountants.................................................................................................4
Purpose of Audit..............................................................................................................................4
Conclusion.......................................................................................................................................5
References........................................................................................................................................6

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Introduction
AMP bank ltd is one of the leading financial institutions that is based in Australia. It
offers a range of deposits, residential mortgages and self mortgaged financial institutions. It also
offers a range of financial loans and banking services to individuals. It has its headquarters that is
based in Paramatta, Australia. It is the largest retail and corporate superannuation service
provider .it also runs the largest risk business in the whole of Australia (Amp.com.au 2018).
However a recent hearing by the Royal Commission uncovered a range of misconduct dealings
with respect to the banking, superannuation and financial services industry in April 2018.
Evaluating AMP Limited’s financial performance
AMP limited admitted to the Royal Commission that the company had made false claims to the
regulator in charging fees from customers for no services provided. The evidence put before the Royal
Commission showed that the company misled the corporate regulator 20 times by showing in its books
as ” fees for no service” as a process error rather than a deliberate manipulation from the audit done by
the statutory auditor PWC. The royal banking commission is tasked with investigating whether the
Australian financial services is engaged in misconduct or being incolved in other legal and criminal
iisues.The Royal commission got to know about the scandal after a whistleblower named Jeff Morris
blew the lid on the scandal(Financial Review 2018). The commission decided to follow up on that and
evidently uncovered a much bigger scandal. The commission investigated the bank for proposed criminal
activities and evidently uncovered this controversy that goes way back since 2009.the commission
persecuted the company and made a strong case that the chairman of the bank , Catherine Brenner should
face criminal charges for lying to the regulator. Upon questioning, the bank rejected the findings of the
Commission and has denied any existence of its criminal wrongdoings(Financial Review 2018). It argued
that its failings should be dealt with by the ASIC and not the Commission.

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Stewardship
Stewardship refers to the handling and management by resources. The handling and
management of thse resources with reference to the AMP bank has been vey unsatisfactory.
(Dyllick and Muff 2016.).
Common good
The company has completely disregarded the interests of its customers and has
unlawfully cheated customers of their money. It not only deducted service fees from customer’s
account but also made improper financial palnning. It repeatedly lied to the regulator and made a
false claim on its expenses. It has not followed any financial dealings by keeping the common
good in mind (Glinkowska and Kaczmarek 2015).
Sustainability and social responsibility into their business
With reference to the case study, the company has not followed any sustainable and long
term social responsibility intheir business.They have not made proper and adequate suatianable
practices (Ioannou and Serafeim 2017).
Ethical performance of accountants
APES 110 refers to the code of ethics for professional accountants. All members in
Australia are obligated to comply with professional services in an honorary capacity. These
standards have legal enforceability .
APES incorporates a number of fundamental principles that are intended to help the professional
conduct of employees. They include:
 Integrity-members are expected to be honest, straightforward and honest in their duty

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 Objectivity- the accountant should not compromise his or her professional or financial
judgment because of bias, conflict of interest or undue influence of others
 Confidentiality-the accountants are expected to maintain confidentiality and not disclose
any inside information to the public unless there is a legal authority to disclose(Payne,
Corey and Raiborn 2018).
 Professional behavior- The behavior of the employees should be kept in strict
conformance to ethical and professional standards as per the code of conduct.
 Professional competence and due care- The accountant should be professionally
competent and perform due diligence while performing business dealings .
APES 230 sets out mandatory requirements and guidance for the provision of ethical
financial planning services. It requires members to comply with its mandatory requirements. It
sets out a new benchmark bordering professional requirements that need to be complied
with.According to the APES 230, the company should act in the best interests in the client, give
proper financial planning advice , maintain quality control and documetation
In the above case study the internal auditors of commonwealth bank have had their work
diluted and have not properly followed through their audit procdures.Although they have tried to
remain professionally competent and have integrity, yet they have not been bold enough in
maintaining judgement and not be swayed by upper management of AMP bank.Given the
scandal, the auditors should have been more proactive in identifying risks.They have not
exercised due care in discharging their duties. The auditors have not followed the mandatory
compliances that are required for professional discharge of its duties including acting in their

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best interests, giving proper advice and maintaining adequate documentation in terms of the
fictitious fees they charged to customers.They have not complied with the provisions of APES in
both sections 110 and 230.
Purpose of Audit
The purpose of the audit is to provide a true and fair view of the financial affairs of a
company .It aims to check whether the company has followed all rules and regulations in respect
of reporting all financial dealings of the company. An independent assessor forms an informed
opinion as to whether the financial statements reflect a true and fair view or not(Robin, Wu. and
Zhang 2017).
The audit function should be based on a way that should address a lack of respect and
breach of trust that the concerned case study addresses.The auditors in this case did not exercise
due diligence and braeched the provisions of APES 110 and 230. A better audit procedure that
promotes integrity, confidentiality, professional competence should be developed so that the
organization should be developed in the future so that it promotes stewardship, commin good
and sustainable practices.
Conclusion
This report focuses on AMP and its related mishaps that were revealed. It studies the
provisons of APES and its related disclosures with reference to the auditing standards and a
professional code of ethics that the accountants need to maintain. It explains the performance of
the company in terms of social performance, stewardship and common goal. It also addresses the
ethical performance of accountants with reference to the provisions of APES. It also explains the

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purpose of auditing and its relevance to the company. It assesses the audit function in terms of
social performance, stewardship and common goal of an organization.

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References:
Amp.com.au. (2018). AMP Personal Banking - Accounts, Super, Home Loans & Insurance |
AMP. [online] Available at: https://www.amp.com.au/ [Accessed 1 Sep. 2018].
Dyllick, T. and Muff, K., 2016. Clarifying the meaning of sustainable business: Introducing a
typology from business-as-usual to true business sustainability. Organization &
Environment, 29(2), pp.156-174.
Eccles, R.G., Ioannou, I. and Serafeim, G., 2014. The impact of corporate sustainability on
organizational processes and performance. Management Science, 60(11), pp.2835-2857.
Financial Review. (2018). Banking royal commission: AMP's misleading of ASIC explained.
[online] Available at: https://www.afr.com/business/banking-and-finance/banking-royal-
commission-amps-misleading-of-asic-explained- [Accessed 2 Sep. 2018].
Glinkowska, B. and Kaczmarek, B., 2015. Classical and modern concepts of corporate
governance (Stewardship Theory and Agency Theory). Management, 19(2), pp.84-92.
Ioannou, I. and Serafeim, G., 2017. The consequences of mandatory corporate sustainability
reporting.
Payne, D.M., Corey, C.M. and Raiborn, C., 2018. A MODEL CODE OF ETHICS FOR
DECISION MAKING IN ACCOUNTING PROFESSIONS. 2017-2018 OFFICERS President
President-Elect, p.195.
Robin, A., Wu, Q. and Zhang, H., 2017. Auditor quality and debt covenants. Contemporary
Accounting Research, 34(1), pp.154-185.