Assignment : Audit, Assurance and Compliance
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Added on 2021-06-15
Assignment : Audit, Assurance and Compliance
Added on 2021-06-15
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Running head: AUDIT, ASSURANCE AND COMPLIANCE Audit, Assurance and ComplianceName of the StudentName of the UniversityAuthors NoteCourse ID
1AUDIT, ASSURANCE AND COMPLIANCEExecutive Summary:The corporate governance system is considered as the procedures and system that is used byorganization to comply with the relevant ethical standard and guiding principles. The report isprepared for evaluating the adherence of organization with the corporate governanceprinciples of ASX. In this particular study, the organization that has been selected for thepurpose of analysis is Newcrest Mining Company that is the largest gold mining companyoperating in Australia. Later part of report deals with the assessment of risk faced byorganization by explaining the regulations, market in which company operates and themeasures that should be taken by organization to mitigate such risks.
2AUDIT, ASSURANCE AND COMPLIANCETable of ContentsExecutive Summary:..................................................................................................................2Introduction:...............................................................................................................................4ASX Corporate Governance Principles implications:................................................................4Risk Assessment:.......................................................................................................................8Nature of the company:..............................................................................................................8Market Overview:......................................................................................................................8Regulatory Authority:................................................................................................................9Business Strategy:......................................................................................................................9Computation of common size statements and balance sheet ratios.........................................10Relevant Audit Risk:................................................................................................................17Steps taken to reduce the risks:................................................................................................18Conclusion:..............................................................................................................................19Reference List:.........................................................................................................................21
3AUDIT, ASSURANCE AND COMPLIANCEIntroduction:New crest limited is the largest mining company of gold that is based in Australia thatis involved in the development, exploration, mining and sale of gold copper and copperconcentrate. Organization has a world class of portfolio of substantial gold reserves,operating mines and options for strong pipeline of growth that is located primarily inAustralia. The company was established in year 1996 and has interest in four countries in fiveproduction provinces with geographical focus on Asia, pacific region and Australia (Shimeldet al. 2017). New crest is placed in well position for generating strong cash margins over thelong term from selling high quality gold assets. A considerable focus is placed on makinginvestment in strategic research and development of underground mining technologies andthis has enabled them to advance technical development. The company has it’s headquarter inMelbourne, Australia with a workforce of 10000 people and market capitalization of US $11.9 billion (adenergy.com.au 2018). One of the important elements of Newcrest strategy isto discover new iron ore bodies. Securing the large mineral and districts projects is the keyobjective of exploration activities of Newcrest. Currently, there are two major projects thatare evaluated by Newcrest namely Namosi in Fiji and Papua New Guinea. Company has astrong operating cash flow and sound balance sheet along with strong growth opportunitiesand extensive technical capability. ASX Corporate Governance Principles implications:New crest mining limited places considerable importance on the principles ofcorporate governance. Company and its people adhere to the highest standard of corporategovernance that is considered critical factor for achievement of the vision. For practising thecorporate governance in an effective way, the organization follows the recommendations that
4AUDIT, ASSURANCE AND COMPLIANCEare published by ASX corporate governance council and is involved in regularly reviewingthe compliance and governance practices. The board of directors of company are involved in regularly reviewing theappropriateness and implementation of the strategic direction of company. In relation toassessing the performance of board and evaluating the individual director performance isundertaken by conducting annual review. Such process of evaluation is based onquestionnaires and interviews of company secretary, general counsel and other executives(Williams 2017). The performance and functionality associated committees and board is dealtby making regular improvement. Board of Newcrest has ultimate accountability to thestrategy to sustainable development. The board has an important role to play in oversight andgovernance of Newcrest remuneration policies and has the responsibility of ensuring that thelong and short term objective of business well aligns with the remuneration strategy(adenergy.com.au 2018). Moreover, the board is also responsible for forming the annualbudget that helps in setting the target performance. In general, the board is also discrete toforfeit or reduce the long term incentive award for participants in event of circumstances thathave occurred in appropriate benefit. The board of Newcrest Mining limited comprises of nine none executive director withone non executive director being the chairman of the company. Other members include chiefexecutive officer, finance director and managing director. On all health, safety andenvironment related incidents, managing director is entitled to report to board. During theyear 2017, the directors of the company were not acquainted with any environmental mattersthat would materially impact the overall business. The CEO of company has experience inoperations, research and business development projects and across commodities such as lead,copper, zinc and aluminium. Total number of females in the board of Newcrest stood at three
5AUDIT, ASSURANCE AND COMPLIANCEand the proportion stood at 30%. Company intends to take efforts for increasing therepresentation of women on the board as a part of gender diversity (adenergy.com.au 2018).The implementation of ethical business practices and principles at Newcrest issupported by the number of policies. Such policies comprised of market disclosure policy,independent policy of board of director, investor and market related policy, securities dealingpolicy and external communication policy. Group takes every possible step to conduct thebusiness in an ethical and transparent manner. The human rights of all stakeholders such ascontractors, employees and local communities are respected at Newcrest. Any unethical ormisconduct behaviour is encouraged to be reported by employees by creating an environmentthat help in protection and retribution of those for making disclosure on concerns. All theactivities of company rely on the maintenance and implementation of sound corporategovernance and ethical business practices (Graham et al. 2018). The suppliers of companyare expected to act in accordance with the ethical position of company. When conducting business, Newcrest seeks to act with integrity and honesty thathelps in promoting the transparency in dealing with business. Integrity within theorganization is comprehensively and systemically managed by the robust process safetymanagement. All the values underpinning the behaviour and relationship of stakeholder ofNewcrest is reflected by code of conduct. Activities of organization are guided by values andpeople acting honestly and integrity and such values are expected to shape the behaviours(Safari 2017). Newcrest limited intends to make balanced and timely disclosure according to theprinciples of ASX corporate governance policies. All the procedures of disclosure and thecontrolling methods are controlled by management with the participation of chief financialofficer and chief executive officers. They are designed in a way for giving assurance to the
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