Corporate Governance and Risk Assessment of Woolworths Group Limited

Audit Assurance and Compliance
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Executive Summary
The present report is developed to analyze and examine the corporate governance and
risk assessment procedures of an ASX listed entity. The corporate governance of the company is
examined in context of the ASX corporate governance principles (CGC) and the risk assessment
procedures are analyzed to identify the audit risk as per ASA 520. In this context, the business
entity selected is Woolworths Group Limited, a recognized supermarket retailing giant of
Australia. It has been illustrated after the evaluation that the company effectively follows the
ASX CGC principles and also has adopted adequate risk assessment procedures for effective
control and mitigation of the audit risk.
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Contents
ASX Corporate Governance Principles.........................................................................................................4
Developing Effective Management & Oversight......................................................................................4
Board Structuring To Add Value..............................................................................................................4
Ethical and Responsible Way of Acting....................................................................................................5
Ensuring Integrity in Corporate Reporting...............................................................................................5
Timely and Balanced Disclosure..............................................................................................................5
Respecting Rights of Security Holders.....................................................................................................6
Recognition and Management of Risk.....................................................................................................6
Fair and Responsible Remuneration........................................................................................................7
Risk Assessment of the Woolworth for the Audit Purpose..........................................................................7
Nature of company..................................................................................................................................7
Market Overview.....................................................................................................................................8
Business Strategy.....................................................................................................................................8
Measuring the financial performance of the Woolworth using the income and balance sheet ratios....8
Audit risk that have been found in the financial statement of the Woolworth and has impact of the
materiality of the financial statements....................................................................................................9
Conclusion.................................................................................................................................................10
References.................................................................................................................................................11
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ASX Corporate Governance Principles
Australian Securities Exchange (ASX) has established standard state of principle and
guidelines for business entities operating with Australia regarding the adoption and
implementation of an effective corporate governance framework. As such, the analysis of the
compliance of Woolworths, an ASX listed corporation as per its standard corporate governance
procedures is carried out as follows:
Developing Effective Management & Oversight
Woolworths as per this ASX principle has effectively established and disclose the
respective roles and responsibilities of the board and management. The corporate governance
statement of the company has established that the major role of Board is to protect the interests
of shareholders and enhance their value. The responsibilities of the Board include strategic
planning, financial oversight, financial reporting, selection of business leaders, development of
effective corporate governance rules and risk management and remuneration committees. The
CEO is accountable to the Board and in support of senior management should report to the Board
about the daily management and operations of the company. Also, the company has established
an effective framework for monitoring and evaluation of the performance of Board and
management ASX Corporate Governance Council, 2014). The evaluation of the performance of
Board and its associated committed is carried out on an annual basis in which the performance of
each director is assessed through an annual performance evaluation process. The feedback is
taken from all the directors and senior management for completing the performance evaluation
process of each director. The People Performance Committee is established by the Board for
performance evaluation of CEO and other group executive committee members and reporting to
the Board ASX Corporate Governance Council, 2014).
Board Structuring To Add Value
ASX listed entities need to develop an effective composition of Board having adequate
skills, size and competencies so that it can meet its roles and responsibilities appropriately. Board
of the company has maintained diverse range of skills, backgrounds and experiences among its
directors to ensure a rationale decision-making ASX Corporate Governance Council, 2014). It is
also committed to enhance diversity within the board composition having both men and women
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