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Audit, Assurance and Compliance - Assignment PDF

   

Added on  2021-05-31

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Running head: AUDIT, ASSURANCE AND COMPLIANCEAudit, Assurance and ComplianceName of the Student:Name of the University:Author’s Note:Course ID:
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1AUDIT, ASSURANCE AND COMPLIANCEExecutive Summary:The current report intends to assess the adherence to the ASX CGC principles andprocess of assessment of an ASX listed entity. In order to fit the purpose of this report, OricaLimited is selected as the organisation, which is one of the biggest global providers of blastingsystems and commercial explosives. Orica Limited has adhered to all the “ASX CGC Principlesand Recommendations” by implementing various strategies such as formation of board, effectiveremuneration structure, code of conduct, timely revelation, risk realisation and management andothers. Some major risks are inherent in the business operations of Orica and they include creditrisk, liquidity risk, market risk, risk related to digital innovation and others. For this reason, theorganisation has undertaken certain steps like hedging, financial statement analysis and othersfor mitigating the above-stated risks. Finally, it has been found out that Orica Limited ismaintaining stable financial position and performance in the Australian market.
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2AUDIT, ASSURANCE AND COMPLIANCETable of Contents1. Introduction:................................................................................................................................32. ASX Corporate Governance Principles and adherence of Orica Limited to these principles:....33. Risk assessment of Orica Limited:............................................................................................123.1 Nature and market overview:...............................................................................................123.2 Regulatory authority and the business strategy of Orica Limited:......................................123.3 Income statement and balance sheet ratios and common size financial statements:...........133.4 Relevant audit risks of Orica Limited and steps to minimise risk:......................................184. Conclusion:................................................................................................................................19References:....................................................................................................................................20
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3AUDIT, ASSURANCE AND COMPLIANCE1. Introduction:Auditing is the procedure of investigating the financial reports of the businessorganisations for determining the material misstatements. When the financial statements of anentity are audited, the auditors need to consider the primary risks related to materialmisstatements and steps need to be taken for minimising them. In this context, ASX hasformulated eight corporate governance principles for the Australian entities to ensure soundmechanism of corporate governance (Asx.com.au 2018). This report intends to assess the adherence to the ASX CGC principles and process ofassessment of an ASX listed entity. In order to fit the purpose of this report, Orica Limited isselected as the organisation, which is one of the biggest global providers of blasting systems andcommercial explosives. The primary business activities of the organisation include providing theabove products to quarrying, oil and gas, mining and construction, supplying sodium cyanide forextracting gold along with providing ground support services in tunnelling and mining(Orica.com 2018).2. ASX Corporate Governance Principles and adherence of Orica Limited to theseprinciples:“ASX CGC Principles and Recommendations” have been introduced in 2003 so that thecompanies ensure sound practices of corporate governance. Orica Limited is no exception to thisaspect, since it has to adhere to these standards. The below-stated discussion would evaluate theeffectiveness of Orica Limited in complying with the “ASX CGC Principles andRecommendations”:
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4AUDIT, ASSURANCE AND COMPLIANCEPrinciple 1:According to this principle, an organisation needs to establish and discloseresponsibilities and roles of the management and directors along with measuring and monitoringits performance. The above figures denote that Orica Limited has disclosed the roles and responsibilitiesof its board. Moreover, the organisation uses the balanced scorecard approach of yearly majorperformance indicators for monitoring and measuring performance. Principle 2:It is necessary for the organisations to have boards with suitable skills, size, compositionand commitment for performing their duties effectively (Baylis et al. 2017). In accordance with
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5AUDIT, ASSURANCE AND COMPLIANCEthe annual report and corporate governance statement of Orica Limited, it has seven boardmembers and their skills sets are disclosed appropriately.Along with this, Orica Limited has disclosed previous experience and skills of theirdirectors for ensuring sound corporate governance within the organisation.
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