Audit Strategy for ANZ Bank New Zealand Limited

Auditing & Assurance (BBAC601)
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Audit strategy
The Client
Name:
ANZ Bank New Zealand Limited
Address:
Melbourne, Australia
Year of Establishment:
1st October 1951
Field of Operations:
Bank is specialized in providing diverse range of personal and business financial solutions.
Period of financial report period under consideration:
2016-2017
Type of financial report:
The financial report prepared by the banking Group are consolidated that is integrating
the financial results of the bank and all its subsidiaries
Industry, regulatory and other external factor
Economic Condition
The financial system within Australia is presently in a good economic condition. Banks
have increased resilience to adverse conditions as they have maintained capital ratios above
regulatory minimums. The high capital generation within the banks of the country is supported
by high level of aggregate profit due to good performance of the banks in the current and past
period of time. Also, there is less evidence in relation to occurrence of bad and doubtful debts in
the banks and also the non-performing assets have stabilized over the period of six months. The
credit growth rate of the banks is good and there is also increase in the foreign lending by the
banking sector of Australia (Financial Stability Review, 2017).
Law and Regulations
Banks operating within Australian banking sector are regulated and monitored by the
Australian Prudential Regulation Authority (APRA). APRA directs banks over maintaining the
adequate capital ratios and also works actively to increase their resilience. The monetary policy
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directing the banking functions is developed by the Reserve Bank of Australia (RBA) (Financial
Stability Review, 2017).
Level of competition
The level of competition with the Australian banking sector is moderate as the banking
operations are controlled b the big four banks within the country (Competition, Efficiency and
Innovation in Banking, 2014).
Name of main competitors
The four major banks within the country possessing high level of competition are
National Australia Bank (NAB), Commonwealth Bank (CBA), Australia and New Zealand
Banking Group (ANZ) and Westpac (WBC).
Level of government’s support
The banking institutions within Australia are largely supported by the government. The
recent Financial System Stability Assessment is developed by the government to provide its four
major banks a funding subsidy (The Australian Government Guarantee Scheme: 2008–15, 2016).
Level of demand for goods or services provided
The wide range of products and services provided by the bank is in high demand by the
Australian consumers and businesses. For example, bank lending is a major source of external
financing for small and medium sized businesses within Australia. The counseling services of the
bank are in high demand by the retail customers for gaining advice on related financial needs and
investment.
Current or potential significant barriers to entering the Industry
The current barriers of entry to Australian banking industry are high capital requirements,
license laws and strict regulatory compliance. The potential barriers of entry are increased level
of competition by the big four banks of Australia (Financial Stability Review, 2017).
Nature of the entity
Its operations
ANZ provides diverse type of financial products and services to the consumers. These
include internet banking, bank accounts, credit cards, home loans, personal loans, travel and
international, investment and insurance.
Major customers
The major customers of the bank are Australian consumers and businesses.
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