Commonwealth Bank of Australia Contemporary accounting issues

Commonwealth Bank
of Australia
Contemporary accounting issues faced by the bank in recent
times.

Overview
• Contemporary accounting issues.
• Compliance with regulations.
• Effects of non-compliance.

Contemporary issues
• Royal Commission issue
• Financial planning scandal.
• Accountability problem in CBA.

Royal commission issue:
• Financial planning business, CFPL
• Fee-for-no-services.

Royal commission issue:
• Bitter battle with ASIC.
• 4 months allowed by ASIC to CBA to resolve the issues.

Failure of CBA in Royal Commission Issue
• Improper system.
• Improper control.
• Improper processes.

Financial planning scandal:
• Fee-for-no-services.
• Unethical practices.

Financial planning scandal:
• Identity of all the official and employees behind the manipulation
still not known.
• Information technology and its use.

Accountability problem in CBA
• Lack of trust in banks.
• Deputy Governor of RBA has also endorsed the view.
• Accountability.

Accountability problem in CBA
• Lack of accountability.
• Who, when, what and how.
• Annual reports.

Recommendations
• Precautions.
• Strong controls.
• Efficient processes.
• Periodic review.

References:
• ABC News. (2019). CBA to pay record $700m fine over money laundering breaches. [online] Available at:
https://www.abc.net.au/news/2018-06-04/commonwealth-bank-pay-$700-million-fine-money-laundering-breach/9831064
[Accessed 18 May 2019].
• Abhayawansa, S. and Guthrie, J. (2014). Importance of Intellectual Capital Information: A Study of Australian Analyst
Reports. Australian Accounting Review, 24(1), pp.66-83.
• Australian Financial Review. (2019). CBA still faces bread and butter banking challenges. [online] Available at:
https://www.afr.com/business/banking-and-finance/cba-still-faces-bread-and-butter-banking-challenges-20180129-h0psw7
[Accessed 18 May 2019].
• Botez, D. (2014). SUBSEQUENT EVENTS AND THEIR IMPORTANCE IN DRAWING UP ANNUAL FINANCIAL
STATEMENTS. STUDIES AND SCIENTIFIC RESEARCHES. ECONOMICS EDITION, 12(19), pp.21-24.
• Commonwealth Bank of Australia v Saggese. (2018). Victorian Reports, 55 VR(12), pp.241-271.
• Danckert, S. (2019). Weak watchdog slammed for reluctance on enforcement. [online] The Sydney Morning Herald.
Available at: https://www.smh.com.au/business/banking-and-finance/weak-watchdog-slammed-for-reluctance-on-
enforcement-20180927-p506fx.html [Accessed 18 May 2019].
• Erbuga, G. (2015). ENVIRONMENTAL ACCOUNTING AND ITS RAPIDLY INCREASING IMPORTANCE. Journal of International
Finance and Economics, 15(2), pp.13-20.
• Kim, J. and Im, C. (2017). Reported Profits And Effective Tax Rate Following Accounting Standards Changes Analysis Of
Consolidated Financial Statements And Separate Financial Statements. Journal of Applied Business Research (JABR), 33(6),
p.1171.