Audit Risks faced by Aristocrat Leisure Limited

Running head: AUDIT ASSURANCE AND COMPLIANCE
Audit Assurance and Compliance
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AUDIT ASSURANCE AND COMPLIANCETable of Contents
Executive Summary.........................................................................................................................2
ASX Corporate Governance Principles...........................................................................................2
Risk Assessment..............................................................................................................................5
Nature of Aristocrat Leisure Limited..............................................................................................5
Overview of the market...................................................................................................................5
Regulatory Authority.......................................................................................................................6
Ratio Analysis..................................................................................................................................6
Common-size Income Statement.....................................................................................................7
Common-size Balance Sheet...........................................................................................................8
Audit Risks faced by Aristocrat Leisure Limited............................................................................8
Ways to mitigate audit risks identified at Aristocrat Leisure Limited.............................................9
Reference List................................................................................................................................10

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AUDIT ASSURANCE AND COMPLIANCE
Executive Summary
In this assignment, proper emphasis has been given on understanding the 8 ASX corporate
Governance Principles adopted or followed by Aristocrat Leisure Limited. This company is
listed in Australian Stock Exchange and belong to the sector of consume discretionary. It can be
understood by this report on how well Aristocrat Leisure Limited follows as well as implements
ASX Corporate Governance Principles in order to deal with daily operations in the company. In
the next segment, the report highlights about the risk assessment criteria by calculating ratio
analysis, common-size income statement and common-size balance sheet. Several risks had been
identified from the calculated ratio and then suggestions had made to the company on how to
mitigate the risks and be a part of smooth functioning of its operations.
ASX Corporate Governance Principles
There are in total 8 Corporate Governance Principles and each of them had been listed
below with proper justification to make the reader understand whether Aristocrat Leisure
Limited follows and implements all of them.
 The First Corporate Governance Principles is laying solid foundations for the
management and even overseeing for the same (Yu et al., 2015). This means the Board of
Aristocrat Leisure Limited need to mention clearly about the functions. The functions
that need to be managed by the board or by the management. The CEO of Aristocrat
Leisure Limited has to look after the daily operations and undertake strategic decisions
on behalf of the company. The Secretary of Aristocrat Leisure Limited is accountable as
they has to look after the corporate governance policies of the business and even look

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AUDIT ASSURANCE AND COMPLIANCEafter the management in the most appropriate way. As far as Aristocrat Leisure Limited is
concerned, they believe in following strict so that they are able to abide by this corporate
governance principle in an effective way.
 The second Corporate Governance Principles is structuring the Board so that they can
and value to the operational factors (Arens et al., 2016). The Board of Directors of
Aristocrat Leisure Limited is made up of both Executive as well as Non-Executive
Directors. After looking at the Non-executive Directors composition, it is noted that 50%
of it are women. The Board of Aristocrat Leisure Limited ha eventually set up different
committee who will look after the company such as Audit Committee, Regulatory
Committee and Nomination Committee (William Jr, Glover & Prawitt, 2016).
 The third Corporate Governance Principles is acting ethically as well as responsibly at
the same time. The company aims at providing its employees with a safe working
environment and act ethically while working (Sookhak et al., 2017). Aristocrat Leisure
Limited ha even developed a code of conduct that is applicable to all the personnel as
well as directors and managers. Therefore, the code of conduct has been developed to
make sure that there is proper preparation of financial statements by the company that has
lot of integrity in it.
 The fourth Corporate Governance Principles is safeguarding integrity in corporate
reporting (Cannon & Bedard, 2016). It is necessary for the company to present their
financial statement effectively. This can be done by setting up Audit Committee who is
accountable to look at the financial statements and even provide suggestions about
accounting policies as well as risk management practices in business enterprise.
Therefore, the management of Aristocrat Leisure Limited had eventually given power so