Audit, Assurance and Compliance Assignment PDF

Added on - 31 May 2021

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Audit, Assurance and Compliance1
Executive SummaryThe present report is undertaken to gain an understanding of the corporate governanceprinciple and the risk assessment procedures to be established by the ASX listed entities. ASXhas provided a set of principle and recommendations to the listed entities for developing theircorporate governance framework. Also, the auditing standards ASA 50 has established theanalytical procedures to be used by auditors to control and manage the audit risk that cansubstantially impact the results of the auditing process. This has been carried out by selecting anASX listed entity, that is, Origin Energy. The company is a leading energy provider in Australiaproviding diverse range of products and services such as electricity, natural gas, solar and LPGto the people of the country. It has been depicted that the company effectively complies withASX corporate governance principles and risk assessment procedures to mitigate the audit risk.2
ContentsASX Corporate Governance Principles.........................................................................................................3Developing a Solid Framework for Management & Oversight................................................................3Structuring the Board to Add Value.........................................................................................................3Ethical and Responsible Way of Acting....................................................................................................4Protecting Integrity in Corporate Reporting............................................................................................4Making Timely & Balanced Disclosure.....................................................................................................5Protecting the Rights of Shareholders.....................................................................................................5Recognition and Risk Management.........................................................................................................5Fair and Responsible Remuneration........................................................................................................6Risk Assessment Procedures.......................................................................................................................6Nature of Company.................................................................................................................................6Market Overview.....................................................................................................................................6Business Strategy.....................................................................................................................................7Computation of Income and Balance Sheet Ratio...................................................................................7Audit Risk and its Mitigation....................................................................................................................9References.................................................................................................................................................103
ASX Corporate Governance PrinciplesASX has established its Corporate Governance Council in the year 2002 and has beenchaired by the Australian Securities Exchange (ASX). The main objective of the corporategovernance council is to develop an effective framework based on recommended set ofprinciples and standards for promoting confidence of investors in business operations. As such,the compliance of a selected ASX listed entity, that is, Origin Energy, with the standardcorporate governance statement proposed by council is examined as follows:Developing a Solid Framework for Management & OversightASX listed entities as per the corporate governance principle of Council need to definethe roles and responsibilities of Board and management. Origin Energy has developed a boardCharter for defining the roles and responsibilities of Board that is also provided on the website ofthe company. The roles and responsibility of the Board includes providing strategic direction tothe company that provides a clear established goals and objective for the management people toachieve (Plessis, McConvill and Bagaric, 2005). The key management personnel of the companyare directly accountable to the Board and develop strategies for carrying out daily functions andachieving its long-term goals and objectives. Directors and senior executives are provided withletters of appointment at the time of their joining the company that provides them all the detailsrelating to their duties, rights, responsibilities and termination. The performances of all theexecutive directors of the company are monitored on an annual basis on the basis of somestandard measures. These include financial and non-financial goals and adherence to the valuesand commitments of the company. There is a presence of remuneration and people committee forreviewing the performance of the Chief Executive officer and the business leaders at the time ofdeciding over the matters related to their incentives as per the performance. The performance ofthe overall Board is assessed by the Director’s in assistance of the independent externalconsultant that also reviews the performance of the committees of Board (Corporate GovernanceStatement, 2017).Structuring the Board to Add ValueBoard of Origin Energy has maintained effective composition to ensure that it caneffectively carry out its duties and responsibilities. As per ASX principle, the Board has an4
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