Audit, Assurance and Compliance - Analysis of Ausnet Services Ltd

Running head: AUDIT, ASSURANCE AND COMPLIANCE
AUDIT, ASSURANCE AND COMPLIANCE
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AUDIT, ASSURANCE AND COMPLIANCE
Executive Summary
The main purpose of this assignment is to analyse the financial statement of Ausnet Services Ltd
which operates in Australia. The assignment will be analysing how the company follows and
implements the ASX Corporate Governance Principles in the business. In addition to this the
assignment will be analysing the various risks which the business faces and also ensure that the
financial statements are free from material misstatements. The assignment will also be assessing
the market overview of the company and include a common size financial statement and along
with this significant ratio will also be demonstrated in the assignment. Lastly the report will be
concluding with measures which can be adopted by the business to reduce the risks.

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AUDIT, ASSURANCE AND COMPLIANCE
Table of Contents
ASX Corporate Governance Principles...........................................................................................3
Risk Assessment..............................................................................................................................6
Nature of the Company................................................................................................................6
Market Overview.........................................................................................................................7
Regulating Authority...................................................................................................................7
Business Strategy.........................................................................................................................7
Ratio Analysis..................................................................................................................................8
Common Sized Profit and Loss A/c................................................................................................8
Common Sized Balance Sheet.........................................................................................................9
Audit Risks....................................................................................................................................10
Measures to Overcome Risks........................................................................................................11
Reference.......................................................................................................................................12

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AUDIT, ASSURANCE AND COMPLIANCE
ASX Corporate Governance Principles
1. Lay Solid Foundations for management and Oversight: The charter which sets out the
responsibilities of the board and the function which are delegated to the management is
adopted by the board. The day to day management of AusNet Services ltd is delegated to
the managing director of the company (Tricker and Tricker 2015). The board is
responsible for reviewing the role and responsibility of the management and ensure that
they are performing with in their scope. The company secretary is directly accountable to
the board, through the chairmen on all matters related to the effective functioning of the
management. For the purpose of appointing new independent Non-Executive Directors,
the nomination committee reviews and recommends to the Board for appointment of an
independent non-executive director (Ausnetservices.com.au. 2018). The company
recognizes that diversity is required in the workforce for attaining long term
sustainability.
2. Structure the board to add value: The board of directors comprises of 9 non-executive
directors which includes the chairman and one executive director which is the managing
director of the business (Beekes, Brown and Zhang 2015). For effective management of
the business and discharge of duties, the board has established nomination committee,
Remuneration Committee and Audit and Risk Management committee (Cybinski and
Windsor 2013). The company has also appointed a new independent non-executive
director who has 20 years of experience in different industries which will be adding value
to the management.
3. Act Ethically and Responsibly: The board of AusNet Services is committed in setting up
an ethical environment for the business dealings. The company has developed a code of