Implement and Maintain Control Procedures for Desklib Online Library

This article discusses the importance of implementing and maintaining control procedures in corporate governance, with a focus on AZN Banking Limited. It covers compliance with codes of corporate governance, the responsibility of the board and authority of delegation, functions of the chairman of the board, meetings of the board, board charter, principles of code of conduct and ethics, and more. It also explains how to obtain clarifications on corporate governance requirements and the benefits of reviewing the internal control system. Additionally, it discusses the types of reports and the timetable for implementing corporate governance. Finally, it highlights the importance of documenting internal procedures in a standardized format and using published sources and recognized practices to develop good corporate governance.

Implement and Maintain Control Procedures 1
IMPLEMENT AND MAINTAIN CONTROL PROCEDURES
by (Student’s Name)
Professor’s Name
Institution
Location of Institution
Course
Date

Implement and Maintain Control Procedures 2
Assessment One
Question One
Corporate governance refers to various processes and policies used for the control and
direction of different corporations that is either large or even complex companies. It typically
relates to the flow of power and accountability among the board of the directors. The selected
company in the AXS is AZN Banking Limited which provides financial services to various
individuals and the government of Australia. The board of directors of the company aims at
achieving certain goals such as to accept certain practices and principles which are considered to
be significant practices globally. The other goals are to adopt the corporate governance as early
as possible and will entail compliance with the published law. The boards also aim at taking an
active role to discuss the best practice of the corporate governance, and this will also include the
fundamental regulations Australia and across the borders.
Compliance with the Codes of Corporate Governance
In compliance with the codes of the corporate governance, the company has listed various
equity securities in the Australian Securities Exchange. It has also listed some of the securities in
the New Zealand Stock Exchange and also in the other securities markets outside the country
(De Haan and Vlahu, 2016 p.230).
Corporate Governance Framework

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The responsibility of Board and Authority of Delegation
An independent non-executive is responsible for chairing the board of directors. The key
roles and responsibilities of the chief executive officer and the chairman of the board are
different. In the board, the chief executive officer is the only executive director (Rao and Tilt,
2016 p.340).
Functions of the Chairman of the Board
The role of the chairman revolves around leadership, and hence he or she performs the following
functions;
 He or she chairs meetings of various shareholders of the company and at a time deals
with certain major concerns of the regulatory and political parties.

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 He or she monitors the performance of the board members and this he does by looking at
the effectiveness and the contributions of every particular member of the board.
 He or she is also a critical member of the board committee
 He or she maintains dialogues and negotiations with the chief executive officer by
providing guidance when necessary.
Meetings of the Board
According to McAlister and Ferrell (2016 p.80), the meetings of the board are usually
scheduled eight times annually, and this includes the offsite meetings which aim at reviewing the
various strategies set by the board. The agenda of the meetings of the board typically includes
the report of the chief financial officer, the report of the chief executive officer, reports on key
projects and the minutes of the previous meetings.AT the end of every meeting, there are usually
private sessions which are to be chaired by the board chairman. One of the private sessions
entails that of directors of the company and the other one involves the non-executive directors of
AZN Banking.
Board Charter
It aims at setting the powers, purpose and the responsibilities of the board of directors.
The key responsibilities of the board according to the charter include providing the directions on
the financial goals and strategies for the company. Another fundamental responsibility of the
board is to appoint and monitor the level of performance of the chief executive officer (Salvioni
and Gennari, 2016 p.610). The board also reports the performance of the company to the various
shareholders.

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Board Selection, Appointment, and Composition
The governance committee does the recommendations relating to the composition of the
board. An annual review is conducted by the governance committee to determine the
composition and size of the board. Based on the appointment, the board takes into account the
communication capabilities, personal qualities, and level of commitment.
AZN Banking ltd is composed of a variety of code of conduct and ethics such as the non-
executive directors’ code and employee code (Harjoto, Laksmana and Lee, 2015 p.650). The
codes enable the directors to makes viable decisions in the day- day running of the company.
Generally, the codes of ethics act as guiding principles for the directors. Further, the two codes
seek to embrace trust, quality and honesty among the employees and the directors and thus they
are all expected to adhere to the provided codes of ethics.
Principles of Code of Conduct and Ethics
There are a variety of principles which guides the code of ethics and such include the following
(John, De Masi, and Paci, 2016 p.310);
 Treatment of other individuals with respect, the difference in value and maintenance of a
conducive working environment
 Acting with integrity and honesty
 Acting in the best interest of AZN Company.
 Reporting of any violations of the codes, policies, and procedures of the company
 Compliance with the codes of ethics and conduct
 Respect for privacy and maintenance of confidentiality
There are also certain policies which support the code of ethics, and they include, AZN Group
Expense Policy, AZN Health and Safety Policy, AZN Anti-Money Laundering and Counter-

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Terrorism Financing Program, AZN Global Whistleblower Protection Policy and AZN Global
Fraud and Corruption Policy.
There are typically training sessions for the new employees on the code of conduct and ethics to
equip them with value and ethical business decision making.
Question Two
According to Arora and Sharma, (2016 p.430), the clarification on the corporate
governance requirements of companies listed in the ASX can be obtained in the annual reports of
the various entities. It is a requirement that all the listed companies must submit a statement
which discloses the extent of compliance with the recommendations based on the reporting
period. It is therefore expected of the all companies to provide various recommendations in their
annual reporting and in the circumstances where that has not been done, the reasons for failure to
offer such recommendations are usually given by the specific companies (Armstrong, Blouin,
Jagolinzer and Larcker, 2015 p.10). Additionally, there is an established website which contains
a variety of information on the corporate governance of various companies listed in the ASX.
From the websites, it is typically easy to obtain different clarifications on the corporate
governance of the companies. During the listing of the companies in the ASX, it is a requirement
that they must all have a constitution which guides their performance and activities in the
exchange security market. In the constitution, there are certain recommendations which must be
added, and some of them are voluntary while others are compulsory. When a particular company
fails to adhere to the recommendations, there is a general rule that it should be reported against
on an, why not and if not basis (Du Plessis, Hargovan and Harris, 2018 p.20).
According to ElGammal, El-Kassar and Canaan Messarra, 2018 p.280), the constitution
of the companies contains vital information on the corporate governance and thus to get

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clarification on the corporate governance an individual would be required to access the
constitution online through their websites. Additionally, there are usually specific guidelines
which contain information on the corporate governance, and such guidelines are aimed at
guiding the companies listed in the ASX on the best practices of the corporate governance.
All the information and details concerning corporate governance are contained in the
guidelines and hence to get clarifications on the particular issue. It is prudent to obtain a copy of
the guideline which is found on the website of the Australian Securities Exchange. Accessing the
various clarifications on the issue would, therefore, involve going through the guidelines online
and an individual could also download it from the specified website (Mishra and Mohanty, 2014
p.280). The internet also contains a lot of information and clarifications on the corporate
governance of various companies which have been listed on the Australian Securities Exchange.
It is from there that a person can easily have access to the details of the firm and thus to obtain
clarification, the key step would involve subscribing to the specific online site which has details
on corporate governance of the company.
Question Three
Shahwan (2015 p.650), argues that the organizations can be protected and ensured that
they are operating effectively by conducting a review of the internal control system. However, it
is also necessary that the practices of a particular organization are compared with those of the
other organizations to make improvements where necessary. Apart from protecting a particular
organization from financial loss, the internal control system can also help to maintain a financial
reporting which is reliable and effective, and this, therefore, ensures that the operations are
effective (Byron and Post, 2016 p.430). The review of the internal control system has certain
benefits associated with it, for example, it will help in safeguarding a particular company from

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victimization. Additionally, it aids in enhancing the process aimed at getting better efficiencies to
enable a firm to be effective at all levels.
The review of the internal control system also helps to identify certain weaknesses in the
internal control structure. It could also recognize some of the fundamental areas in the
organization which can be strengthened with the aim of maximizing efficiency. When an internal
control system is reviewed, the various risks which a particular company could be exposed to can
be identified, and mitigation strategies will be set up to eliminate and thus prevent the particular
risk from occurring in the near future (Agrawal and Cooper, 2017 p. 1650014).
Question Four
There are a variety of reasons why the directors should delegate some of their duties to
other individuals in a company. Certain benefits arise when such duties are delegated. For
example, the delegation will typically improve efficiency, and this is because work will be
transferred to other individuals who may possess better skills and knowledge.
The other reason for delegating duties by the directors is to develop other people in the
company through coaching them on new skills and later delegate to them certain tasks which
require the new skills. The delegation also allows the directors to focus on fundamental issues of
the company such as control. The board can maintain and review the accountabilities of the
company with the aim of ensuring that they are consistent with the internal control procedures by
using the various control activities (Larcker and Tayan, 2015 p.300). Some of the control
activities entail the performance reviews, physical controls for physical security, information
processing which verifies for completeness and accuracy. The other control activity which the
board can use is the segregation of duties, and this will help in ensuring accountability and
transparency.

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Question Five
Types of Reports
Resource Reports
It entails how various projects of a company have been allocated to specific individuals.
The resource reports are useful to the directors since it provides details on the allocation of
different projects and this will, therefore, help in allocating resources for such projects
efficiently. They are considered to be of significance when it comes to allocating different tasks
to a variety of individuals in the company.
Risk Reports
The risk report is provided to the directors on at least a monthly basis. It contains details
on the risk review, and hence it is useful to the directors since it will enable them to identify
various risks that a particular company may be exposed (Lessambo, 2016 p.24). The details in
the risk report include the risk profile of various projects to be undertaken by a firm and the
various mitigation strategies
Executive Reports
The executive reports are provided to the directors on a weekly basis, and it contains an
update of various projects in the company. Such reports are therefore important to the directors
since it will update them on how far the management has done a particular project.
Status Report
The status report is provided on a weekly or even monthly basis. It gives details on the
progress of various tasks delegated to the management by the directors, and therefore it is useful
to the directors since it updates the directors on the progress of various jobs.

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Annual Reports
The annual reports are provided to the directors on a yearly basis. It usually contains
information about the financial position of the company, and therefore it is used to measure the
level of performance of a company. Such a report is of significance to the directors since it
provided them with financial information which is used for making a variety of financial
decision by different stakeholders of a company.
Question Six
Timetable for Implementation of Corporate Governance
The submissions of the report on corporate governance after consultation with all the
stakeholders will be done prior to the fifth edition. The fifth edition will be disclosed in 2020 and
this will take effect from the full financial year which will begin in 1st January 2020.However the
31st December balance will be used to estimate the corporate governance practices of the fifth
edition beginning with the fiscal year which will end on 1st January 2021Also,for the 31st
December will be used to estimate the corporate governance practices in the fifth edition and this
will be based on the beginning with the fiscal year ending 31st December 2021.
Question Seven
The documentation of the internal procedures in a standardized format can ensure
consistency because it will provide a structured method for carrying out the internal control
procedures, and it will also allow for dissemination of various knowledge and ideas on the
techniques of carrying out internal control procedures in a particular company (Yu, Krause, Bell
and Bruton, 2016 p.10063).
Question Eight

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The published sources and the recognized practices generally assist in the development of
good corporate governance by providing a key detailed process of establishing good corporate
governance to a company. It also contains guidelines which give information on the best
practices which could be applied to enhance the best corporate governance. Additionally, the
published works also provide the legal, regulatory and institutional framework and this is usually
a fundamental requirement for good corporate governance of a company. Such a framework
usually constitutes the regulation, business practices and the self-regulatory arrangements aimed
at the promotion of good corporate governance among a variety of companies.
Further, the published sources contain the various requirements of good corporate
governances which are typically based on the accounting standards, company law, and securities
regulations. Such legal issues which are outlined in the published sources are used by a variety of
firms to promote good corporate good governance (Macey and O'Hara, 2016 p.700). The laws
generally in the published sources of corporate governance are aimed at protecting rights of
different shareholders of the company and eventually ensure that they are treated with equality,
and this forms one of the critical aspects of good corporate governance in a particular
organization (Yu et al.2016 p.10063). The published sources also contain the key standards and
procedures which must be adhered to by the companies while reporting the information about the
corporate governance of the company. Such standards generally allow for the application of good
corporate governance by different firms listed in the Australian Securities Exchange.
Another way through which the published sources promote good corporate governance is
by defining the key roles and responsibilities of various individuals in a company such as the
board, management, executive officers and the chair (Aguilera, Judge, and Terjesen, 2018
p.100). The definition of such roles will ensure that good corporate governance is practiced in

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the companies since every particular individual will be in a position to carry out his or her
responsibility according to which has been published.
Question Nine
The performance indicator for assessing the compliance with the procedures of the
internal control would be by evaluating the review of the audit report provided by the auditors at
the end of the financial years. The audit reports typically indicate the weaknesses which have
been identified in the internal control system of a particular company and hence that would be
used as a performance indicator.
Question Ten
According to Tricker and Tricker, (2015 p.40), the adoption of corporate governance is
likely to cause certain variations. For example, it will lead to growth in the firm, and this is
because there will proper administration and management based on the best practices of good
corporate governance. The other variation is that the rights of all the shareholders will be upheld
and thus they will be treated fairly. This will be based on the provisions of the codes of ethical
conduct.
Another variation will be on the economic growth such that, the adoption of corporate
governance will likely lead to high economic growth since various institutions and organizations
will provide a safe working environment. There will also be growth and development among the
employees, and this will be attributed to the trainings on the ethical standards and practice
(McCahery, Sautner and Starks, 2016 p.2920). The last variation will be on the effectiveness of
various operations of a [particular company. The corporation governance will typically result in
the efficient operations of an organization, and this is because there will be compliance with the
different laws and regulations.

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Question 11
The procedure for developing the modifications towards the procedures to facilitate
compliance with the internal controls include developing an appropriate control environment,
evaluating of a risk, executing the control activities, communication of information to the
concerned parties and monitoring such modifications to see if they will adhere to the internal
controls.
Assessment Two
Based on the case study, the corporate governance and ethical conducts which have been
violated is integrity. Karen Simon, the authorizing staff of the company, had authorized for the
supply of certain materials using his company but failed to deliver the materials. The authorizing
staff instead invoiced to NCT an excess amount of $400,000.Such an act by Karen Simon
indicates the breach of ethical conduct which specifically relates to integrity.
The internal control procedure that will ensure that the situation in the company does not occur
in the future will entail;
Segregation of Duties
The company should separate various duties such as those of auditing, bookkeeping, and
reporting and this will ensure that the possibility of certain workers in the company committing
fraudulent acts is reduced (Center, Alliance, and Insurance, 2016 p.100).
Physical Audits
The physical audits will entail counting of cash physically and also the assets. Such a
procedure will help to identify certain hidden discrepancies in the account balances (Punyalack,

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Graham and Badrick, 2018 p.509). The procedure should be done on a daily basis to identify
such acts of fraud by various employees.
Access Controls
The access control of internal procedure will involve the use of electronic access logs and
passwords to enable specific individuals to access the accounting system.IT will also aid in
revealing the various sources of errors in the accounting system.
Periodic Reconciliations
There should be a periodic reconciliation of the account balances with the aim of
ensuring that it matches with the balances in the existing accounts such as banks.
The delegation and accountabilities which ensure that compliance with the internal
control procedure include, the financial delegations and this involves the delegation of the duty
to another individual in the company to handle the finances of the company (Roy and Saha, 2018
p.400). Such a delegation will ensure that the internal control procedures are adhered to by all the
employees. Also, there should be external accountability such that the financial statements are
prepared on the basis of generally accepted accounting standards. The other accountability will
be the internal financial accountability, and this will ensure that the employees of the company
are made to account for activities within the organization (Chan and Vasarhelyi, 2018 p.280).
KPI’s can use the performance indicator by evaluating the review of the audit report provided by
the auditors at the end of the financial years. The audit reports typically indicate the weaknesses
which have been identified in the internal control system of a particular company and hence that
would be used as a performance indicator.

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