Audit Assurance and Compliance for Newcrest Mining

Running head: AUDIT ASSURANCE AND COMPLIANCE
Audit Assurance and Compliance
Name of Student:
Name of University:
Author’s Note:

1AUDIT ASSURANCE AND COMPLIANCE
Executive Summary
The study aims to address the implication of ASX Corporate Governance Principles for
Newcrest Mining. Some of the various types of scope of discussion has been seen to be based on
relevant audit risk and potential steps to reduce risk. The latter part of the report has further
computed the income statement and balance sheet ratio, and Development of common-size
financial statements and suggested the potential steps to reduce the overall risk in audit. The
main findings have been able to state that the company follows “Corporate governance as
published by the Australian Securities Exchange (ASX) Corporate Governance Council (3rd
edition ASX Principles and Recommendations)” and observed to regularly review the
“governance and compliance practices”. The risk assessment has been further able to state that
“Foreign currency risk, Liquidity risk, Interest rate risk, credit risk, Commodity and other price
risks”. Furthermore, the audit risk paradigms have been segregated as per the Internal Control
Framework, External Audit, internal Audit and management assurance. Despite of the decreased
profit in the 2017, the company has been able to improve itself in term of the increasing sales
and minimising the risk in terms of current assists, debt to equity ratio and increased efficiency.
Some of the major initiatives taken by Newcrest Mining to reduce risk is recognised with “sound
management” and oversight of matters of key audit responsibility. Newcrest has been able to
detail the internal control framework which is seen to be regularly reviewed by the Board. The
internal control framework risks are mitigated by following an n “integrated, robust planning and
budgeting process” thereby delivering a detailed two-year budget. The company’s current
external auditor is identified to be EY and “reappointment of the external auditor” is seen to be
reviewed annually. The EY’s Audit and risk committee is seen to acknowledge in the “areas of
knowledge, quality of team, coverage ability, industry knowledge, cost and audit methodology,”
which the company believes to be critical for the service delivery.

2AUDIT ASSURANCE AND COMPLIANCE
Table of Contents
Introduction......................................................................................................................................3
Implementation of ASX CGC principles for Newcrest Mining......................................................3
Risk Assessment..............................................................................................................................5
Computation of income statement and balance sheet ratio, and Development of common-size
financial statements.........................................................................................................................6
Potential steps to reduce risk.........................................................................................................15
Conclusion.....................................................................................................................................16
References......................................................................................................................................17

3AUDIT ASSURANCE AND COMPLIANCE
Introduction
Newcrest is recognised as one of the “world’s largest gold mining companies” operating
in four countries. The company is “headquartered in Melbourne”, Australia and among the top
50 companies listed in the Australian securities exchange. The mines of the company are seen to
be in “Australia, Papua New Guinea (PNG), Indonesia, and Côte d’Ivoire”. The company’s main
emphasis is seen with three key value drivers: “maintaining low costs, growing reserves and
production and using capital efficiently”. The main mission of the company has been further
identified with delivering “superior returns from finding, developing and operating gold/copper
mines”. The vision of the company has been further identified with providing “safe, responsible,
efficient and profitable mining” (Newcrest Mining Limited 2018).
Discovery of the new ore bodies is identified as the main strategy of the company and
Newcrest possess a successful exploration track record in this aspect.
The main discussions of the report have been seen to with addressing the implication of
ASX Corporate Governance Principles for Newcrest Mining. Some of the various types of the
other scope of discussion has been seen to be based on relevant audit risk and potential steps to
reduce risk. The latter part of the report has further computed the income statement and balance
sheet ratio, and Development of common-size financial statements and suggested the potential
steps to reduce the overall risk in audit.
Implementation of ASX CGC principles for Newcrest Mining
The company has been recognised with the maximum standard of maintaining CG which
is critical to the vision. The company has been identified to following the effective procedure of
“Corporate governance as published by the Australian Securities Exchange (ASX) Corporate
Governance Council (3rd edition ASX Principles and Recommendations)” and observed to
regularly review the governance and compliance practices. The board of directors is seen to
consist of ten directors. The board has determined all “Non-Executive Directors including the
Chairman are considered independent” as per the “Board’s Independence Policy”. The main
purpose of the board have been further set out with the Board charter. The charters of each board
have been able to set out the responsibilities as per the board charter. In addition to this, the