ASA 701 Audit Report on NAB Bank

This article analyzes the impact of ASA 701 audit standard on NAB Bank, focusing on corporate governance and audit regulation. It discusses the rationale of ASA 701, the influence of the standard on NAB, and regulatory and compliance issues due to audit. The article also provides a literature review and an executive summary of the topic.

ASA 701 Audit Report on NAB Bank
Student Name: Abraham
Student I.D: 0123
Submission: MAY 2019

Table of Contents
EXECUTIVE SUMMARY...........................................................................................................3
LITERATURE REVIEW.............................................................................................................3
INTRODUCTION.........................................................................................................................4
AUDITOR INDEPENDENCE.............................................................................................................5
RATIONALE OF ASA 701...........................................................................................................5
IMPACT OF ASA 701 STANDARD ON NAB...........................................................................6
CORPORATE GOVERNANCE AND AUDIT REGULATION OF NAB..............................6
REGULATORY AND COMPLIANCE ISSUES DUE TO AUDIT.........................................8
RECOMMENDATION.................................................................................................................9
CONCLUSION..............................................................................................................................9
REFERENCES............................................................................................................................11

Executive Summary
The National Bank of Australia (NAB) is one of the most prominent financial
institutions on the Australian Stock Exchange Services and Financial Services
in the world's 30 most powerful organizations. The Bank has disclosed to the
public the loss of foreign currency options related to unauthorized
transactions of AUD360 million in January 2004. Risk management and
uneducated my desire to risk less or no process, or the body of the weight of
the government system established by the bank, there is no race and no
match. The Australian National Bank of the problem from the AUD4.1 billion
Home Side loss lending in 2011, the degree of risk management, the firm
enforced the view, the lack of energy independence and audit filed by the
authority of Securities and Exchange Commission in 2014, the advantage of,
he had earned. This paper can critically analyze the influence of the new
board of directors' performance on the failure of Management Corporation
and directors in 2011-2015.
LITERATURE REVIEW
Australia has urged the government to improve the decade of large
corporations and the lack of good public management and public use in the
last decade. Good corporate governance encourages the creation and control
system (ASX, 2013) to provide non-afraid accountability to the board's
responsibilities for corporate governance of existing companies. Internal
auditors cannot be described as the top shareholders, executives, and
managers of all core groups that consist of a set of relationships with
manager regulators. The company will be responsible for the performance of
the management company more effectively responsible for how to generate
the internal structure of the government is as follows. There is considerable
flexibility as the Board recognizes that everything is relevant regarding
corporate governance along with the extreme diversity of organisational size
and category. The company can evaluate and decide on the governance

structure within the suggestions and advice of the board directives. The
biggest concern is to foster competitive performance needed to achieve the
major maximization of the shareholder's company. The National Bank of
Australia (NAB) Foreign Exchange seemed to be able to get a clear view of
the poor governance and risk management system and quorum definitions
within my weaknesses, internal governance, and inspection procedures
(ANNUAL FINANCIAL REPORT , 2018).
The forum report was revised in 2014 and the new APRA 2014). The
utilisation of the standard model (regulator's model) to calculate the
regulatory capital requirements of the market for the risk of risk, banks need
to carry around AUD450, additional regulatory capital, if the more
sophisticated internal model is available. 8% of the portion of the price
increase for the 2014-2015 income rates is due to the additional cost of
compliance with the requirements of the NAB (Godinho, Eccles, & Thomas,
2018). This failure resulted in significant BR, corporate governance review
APRA, NAB and Price Waterhouse and Cooper (PWC) results. PwC's report is
reported to the Board of Directors before Frank Cassowall commissioned and
reports are presented. The misfortune of others should be doubled, and I was
presumed to prescribe the report of Charles Allen, president of the board of
directors. People were with her in Walter above mentioned his fellow
director, when you started to rising and it was especially suspicious of it (for
what he said was his own), all these days, and the status report of the law
(ANNUAL FINANCIAL REPORT , 2018).
INTRODUCTION
The company draws on the history regarding the founding of National Bank
of Australia, Australia is the main residence of the Australian National Bank
of the Press 1858, a public limited company incorporated by June 23, 1893,
in Australia. The company runs its operation in line with the Banking Act
1959 and is listed on the Australian Stock Exchange in 2001 for 30 hours at
the highest and the world's best. NAB, the largest financial institutions

(market capitalization and total assets), finance Service organization
behaviour and better than AUD4.1 billion. 8.4 And 2.3 million Customer Asset
Management. Over 10 of our customers are in love and operating in the
country. The new business is available in New Zealand, Asia, USA, UK,
Australia and the organisation with Poor's ratings and AA-standard. The
National Australia Bank provides a variety of services for individuals and
businesses in finance and banking. It will contribute to providing reasons for
reasons, investment reasons, his own actions, the reduction of the reasons,
he specifies the cash management of the reasons for the sake and easy to
follow kind of terms, and we have a special kind of management, Saving
foreign currency rates, in the country house, the law of faith, the city, and its
reason (Hunt, 2016).
The Australian National Bank of Australia is one of the eminent financial
institutions in the world (30) exchanges and registered with most financial
institutions. In January 2015 month, the loss of the bank publicly disclosed to
the foreigners identified in the foreign exchange transaction AUD360
selection related to Sichuan Bay. Risk management and uneducated my
desire to risk less or no process, or the body of the weight of the government
system established by the bank, there is no race and no match. The
Australian Prudential Regulatory Authority (APRA), the Treasury and the
Accounting Authority in Australia (CPA) and other companies monitoring
financial disasters are widely reviewed. The Sarbanes-Oxley Act for corporate
governance cases works, but not the other banks in Australia are
internationally NAB (Rogers, Wong, & Nelson, 2017).
Auditor Independence
In the early time of 2015, it was independence listed in Australia, where it
was investigated whether the offensive against foreign exchange losses.
Whether he failed to get complied with the Securities and Exchange
Commission (SEC) (ADRS) is applied to audit companies, the Sarbanes-Oxley
Act (or ADRs) allows auditing companies and clients to audit or provide

certain non-audit services to employees or employees through management
or through exclusion of employees and some of the auditors in Australia.
Where, KPMG of Young in the use of non-audit services was more than
doubled in 2012, and one audit fee in 2012, KPMG and AUD 6.56 million in
the use of non-audit services in 2014, auditing services for AUD10.81million.
This support is not sufficiently clear in the general provisions of the service
function but is free of risks that are not related to the solicitation of the form
of audit independence (Salim, Arjomandi, & Seufert, 2016)
The rationale of ASA 701
ASA 701 is established by Auditing and Assurance Standards Board
(AUASB) in order to communicate major audit matters in Independent
Auditor’s Report Under section 227B of Australian Securities and
Investments Commission Act, 2001 and section 336 of Corporations
Act 2001, on 1 December 2015 (legislation.gov.au, 2019). Therefore it can
be said that the main objective of new ASA 701 audit standard is to
determine key aspects of audit matters along with having a strong and
rational opinion on financial report of every company under the guidelines of
ASA 701. Furthermore, it provides transparency to the annual report by
communicating the financial report to auditor’s report. The audit report of
the company has displayed a 20% reduction than the target in its One NAB
score for employees while for the executive leadership team it has been
701%. The group CEO has achieved a 45.5% target, indicating that the CEO
is about to receive $3.03 million less than the illustrative value. 60% of the
variable reward has been deferred in the part of the share
Impact of ASA 701 standard on NAB
It is known that the main function of the ASA 701 standard is to
communicate the key audit matters. Therefore, it can be seen that main
features of ASA 701 standards are different and reflects the commitment of
AUSAB towards current enhancement to auditor’s report that has been

Start Evaluating Corporate
governance system
Increase of best
practices
Crisis
identification
Reformation
Recession
Avoiding the
part of declining
in active interest
Reducing the chance to
result in getting collapsed
established by International Auditing and Assurance Standards Board
(auasb.gov.au, 2019). Therefore, based on the guidelines of ASA 701 standards
impact on NAB can be seen in terms of seeking communication regarding
key audit matters of the bank in their report from the auditor. Furthermore, it
helps the banking sector by emphasizing on the determination of factors
under corporate governance criteria (Sarens, Christopher, & Zaman, 2013).
In the case of NAB, this specific audit standard would help in assessing
higher risk. Thus, it can be said that after implementing the ASA 701 audit
standard within the main organization, exposure of NAB will be on corporate
governance based on effective audit regulations.
CORPORATE GOVERNANCE AND AUDIT REGULATION OF NAB
Corporate governance will increase corporate governance through the
testability of corporate regulatory systems in the face of corporate
governance - which will lead to increased governance, crisis and reform, and
the wave of recession and suitability will become a shareholder of the
company. For a huge range of period, there has been noticed a decline in
active interest, resulting in the collapse but still more appropriate to the kind
of property for which the government is working for the government than to
run the mechanism properly maintained. The market system is volatile and
competitive dynamics. This is not to say that power can show the refuge,
pressure from the workout crowd board.
Figure 1: Required Audit procedure
(Source: As influenced by Moradi-Motlagh, et al. 2015, p.45)

Figure 2: Corporate Governance framework of NAB
(Source: As influenced by Godwin & Schmulow, 2015)
The above diagram shows the corporate governance framework of NAB.
Based on it can be seen that the main components of corporate governance
include management as trustee that secure the capital of shareholders
(Moradi-Motlagh et al., 2015). On the other hand, the main focus of corporate
governance is on providing transparency by implementing effective audit
regulation in the management of NAB. Furthermore, wide exposure to
corporate governance helps the banking organization to maintain a
sustainable relationship with stakeholders.
On the other hand, Company Law Economic Reform Program (CLERP 9)
drawing its position in the UK, Australia, and in this region is the most
important inclusion to US corporate governance regulations. In addition, in
respect to the suggestions upheld by the report of the HIH Royal
Commission, the independence of the audit to the company changing the
NYSE, a major change to the April 2013 consolidation with the
Corporate
Governance
Framework
Management
as Trustee
Relationsip
with
stakeholders
Corporate
Structure
Transparency

recommendation of CLERP 9 Ramsey of the Australian corporation's report.
In September 2013, the Recommendation draws on the enhanced non-
standing director of the Higgs report on the release of the report, the
outlined changes to the Audit function and the identified amendments to the
ASX White Rules as well as the development of the British Royal Regulations
and the Sarbanes- Slim 2012 requires the law, and corporate governance,
disclosure and the development of the ASX corporate government plan. And
the Australian Prudential Regulatory Authority (APRA) International Pty Ltd,
which is used in Corporate Governance, provides a large multi-level financial
institution as listed in the Australian Stock Exchange's analysis. In order to
evaluate the risk of strengths and weaknesses in the evaluation system
board (Godwin & Schmulow, 2015).
REGULATORY AND COMPLIANCE ISSUES DUE TO AUDIT
Other banks of Australia have experienced the biggest Australian bank
undergo "public discipline" shortly after the currency crisis in January 2015.
The regulatory reaction to NAB's trading losses is that the culture is
detrimental to transparency, poor governance, and weak risk management.
The APRA imposes on-site supervision until the NAB complies with a series of
81 actions and the action is implemented, and NAB's internal target total
capital adequacy ratio is 8 to 10%, and the internal capital ratio is 9 to 9.5%.
The approval NAB to utilise internal models for determining market risk
capital has been withdrawn along with the currency options desk has been
closed to the enterprise business till all interests were there (Buckby,
Gallery, & Ma, 2015).

Figure 3: Different issues identified
(Source: As influenced by Buckby, et al., 2015, p.27)
In 2014, the first listed ASX Company Rule Grid was a worm; companies must
provide disclosure on ASX Corporate Governance Committee's upright
corporate governance and good practices and recommendations in the
annual report. The excessive burden of reporting in this respect can be
regarded in the considerable increase in interest from the NAB to the crime
in the past four years for the report on corporate governance issues. The
page has been increased by Brom, which is taught by the lack of annual
corporate governance on a triple day in the 2014 annual report, the Ten
Commandments page. While legal terms of compliance complied by NAB
with ASX's corporate governance for good, but it seems to come back. In an
interview with John Stewart did not recognize the executive committee as a
new CEO that he was at risk as a result of his non-member experience.
Following the news breaking news of the media, Mark Graham Kraehe
resigned as chairman of the committee, which took the role of board
chairman Charles M. Allen. The president of the risk committee which was
currency
crisis
poor
governance
weak risk
management
Bad
transparency

able to establish a college director seemed unfitting about the fact that the
need to take risks in the primary movement to administer, which had taken
over the presidency in his place (Moradi-Motlagh, Valadkhani, & Saleh,
2015).
The Board was uncertain for a period of two to three months as a result of
claims and claims that were filed with board members that were not credible
and credible. The board held a shareholders' meeting in May 2014 to resolve
the issue of the board of directors, but the meeting did not proceed because
some board members finally completed the negotiations in stages. In the
timetable avoiding the blood of the public can result with the narrowest
margin. Issues related to the Risk Management Committee were handled in
2014 while all the new members with appropriate experience have been
appointed to the committee of mandatory risk and drastically changed the
public and a private face. The committee had conducted a meeting for 18
times in 2014 in direct contradiction to the previous year when the meeting
was not held (Riaz, Ray, Ray, & Kirkbride, 2013).
Recommendation
The events that have brought considerable changes to the rules and regulations governing
corporate governance, but it is required to balance the interests of the public along with the rules
and regulations, imposing rules and providing strong guidance. In many countries, the current
status for corporate governance can be defined as a common set of principles and prerequisites.
As the globalization of the capital markets grows, there is a strong incentive to
maintain this position globally as the awareness and desire to achieve
consistency and harmony in the good principles of audit and corporate
governance grows. Therefore, it is recommended to the banking organization
to implement ASA 701 audit standard as it would help to assess higher risk
within the organizational culture (Buckby et al., 2015). Along with that, by
implementing this specific audit standard, NAB would be able to signify the
auditor’s judgment. Moreover, ASA 701 standard’s major focus on corporate

governance would help the bank to get transparency on regular banking
transaction.
CONCLUSION
Thus, it is concluded that the review of the NAB Audit Report mainly
suggests that for many years there has been a recent problem in the culture
of corporate governance and risk management and control by this
organization. Cornell (2005) Stewart uncovers (CEO), Cicutto's misjudgment
not only insists the past five years, but the last chance, and relaxes the CEO.
Through the management of the lack of responsibility for the people at the
Home Side, but at least it seems to be the accident. The directors or board
members were responsible for or are not sprinkled in 2014.The feeling is a
loss of AUD4.1 billion, resulting in a "decline". In summary, the management
of the man and board of the alliance provided, there was a rumour that
money was not inside, as he lost.
Although DuPont analysis of zero performance and profitability in terms of
cost efficiency Net profit margins and ROE have declined from 57.4% to
50.8% a year ago, with separate variances and a measure of the home side
and foreign currency loss and cost-to-income ratio efficiency over the next
few years. The importance of this increased cost relative to the new 'peers'
was 49.2% in this area (KPMG 2004). ASX experienced a significant decline in
each stock over a year, and at CBA, its strong competitor angle for trading
over AUD7.00 a year later. The history in the Market shows that John
Stewart, CEO, can now begin planning to cut 4200 jobs in a way that
dominates the banking hit "bottom" and stabilizes the recovery cost of
income.

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