Auditing and Assurance in Australia - Commonwealth Bank Case Study

Running head: AUDITING AND ASSURANCE IN AUSTRALIA
Name of the Student
Name of the University
Author note

1AUDITING AND ASSURANCE IN AUSTRALIA
Executive Summary:
Business is one of the most important areas on which the economy of any country
depends. They affect the internal working of the economy as a whole and it directly impacts
the Gross Domestic product (GDP) of the economy, making it a self-reliant in its working.
Along with this, one of the most important underlying factors is the presence of various kinds
of risks associated with the functioning of the business of the different companies. Thus, the
management of risks becomes an important factor for any company. In the same way, the
way a company is managed and governed is another important factor for any company. If the
company does not work properly in a successful path, achieving its objectives, then the
company can go in ruins and be completely destroyed. As a result of which, the company
needs to be governed properly by application of proper principles. Thus, in a way, a detailed
explanation of both these kind of items have been provided in the light of Commonwealth
bank which is operating Australia.

2AUDITING AND ASSURANCE IN AUSTRALIA
Table of Contents
Introduction:...............................................................................................................................3
Corporate Governance:..............................................................................................................4
ASX principles of Corporate Governance:............................................................................4
Commonwealth Bank and its Corporate Governance:...........................................................5
Commonwealth Bank: A brief Overview..........................................................................5
Implementation of Corporate governance in Commonwealth bank:.................................5
Application of ASX principles of Corporate Governance by Commonwealth:................6
Risk Assessment:.......................................................................................................................9
Commonwealth’s nature of business and its segment of market:..........................................9
How the bank manages its risk?.............................................................................................9
Different kinds of risks faced by the banking company:.....................................................10
References:...............................................................................................................................14

3AUDITING AND ASSURANCE IN AUSTRALIA
Introduction:
In today’s world, every organisation, company be it a sole proprietorship, partnership
or a joint stock form of company, all of them operate in a risky and an uncertain environment.
As a result of which risk assessment and proper implementation of principles of corporate
governance is very much necessary.
In the words of one of the most prominent editor of ‘The Financial Times’, the importance of
corporate governance is very crucial in embarking upon a novel frontier of competitive
advantage and profitability. Corporate governance’s importance permeates from the very top
of any organisation, right from the board of directors to the lowest operational level of any
organisation. It refers to the ‘way a company is governed’ and is included in almost every
activity undertaken by an organisation (Claessens and Yurtoglu 2013). Right from leadership
communication to the formulation and implementation of strategic decisions, corporate
governance is needed.
All profit making business as well as non-profit making business face the risk of various
unexpected events taking place in the organisation ranging from any financial losses, scams
and other fraudulent activities. Such activities could lead to huge losses for the organisation
concerned. It thus becomes the duty of the concerned organisation to protect the interests of
the various stakeholders of the company from such kind of risks (Bell, Filatotchev and
Aguilera 2014. It is in these cases, that the usage of a risk assessment comes into existence.
In this given project assignment, the analysis and importance of the risk assessment
procedures and the implementation of the principles of corporate governance in the
Commonwealth bank of Australia has been done