Accountants, Auditors, and Corporate Governance: A Wesfarmers Study

This research proposal investigates the responsibilities and contributions of accountants and auditors to corporate governance within Wesfarmers, an Australian listed company. It examines issues such as risk management, corporate information handling, and conflict resolution, particularly in light of high-profile corporate scandals and the global financial crisis. The study focuses on the role of Wesfarmers' Audit and Risk Committee in overseeing financial reporting and compliance with legal and regulatory requirements. Key research questions address the awareness of auditors and accountants regarding related party transactions, disclosures by directors, and the committee's adherence to ASX principles. The research employs both primary and secondary data collection methods, including quantitative and qualitative approaches, with ethical considerations prioritized through data protection and informed consent. The ultimate aim is to analyze the effectiveness of the corporate governance mechanisms implemented by Wesfarmers and the contributions of accounting professionals in upholding these standards.

Running head: Accountants and auditor’s responsibilities and contribution towards corporate
governance: A case study of Wesfarmers
Accountants and auditor’s
responsibilities and contribution towards
corporate governance: A case study of
Wesfarmers

Accountants and auditor’s responsibilities and contribution towards corporate governance: A
case study of Wesfarmers 1
Executive Summary
The chosen topic for the research proposal is ‘The Responsibilities of the Auditors and
Accountants and their Contributions toward Corporate Governance in Wesfarmers. ‘In the past
two decades corporate governance has been paying a dominant role in the business environment
in Australia. Due to high profile corporate scams and global financial crisis, the government and
the companies have actively supported the implementation of the new systems of governance
and healthy government practices.
Wesfarmers has established the Audit and Risk Committee Charter to resolve the problems of
corporate governance and to assist the Board of Directors in supervising the financial reporting,
and compliance related to the legal and regulatory requirements of the company.
So, in this research proposal, the accountabilities of the auditors and accountants in the corporate
governance of Wesfarmers and the problems confronted by the company pertaining to the
corporate governance issues shall be analyzed.

Accountants and auditor’s responsibilities and contribution towards corporate governance: A
case study of Wesfarmers 2
Contents
Client Organisation......................................................................................................................................3
Research Background..................................................................................................................................3
Research Problem / Research Question.......................................................................................................3
Research Aim and Objectives......................................................................................................................4
Literature Review........................................................................................................................................4
Data Collection Plan....................................................................................................................................5
Ethical Consideration..................................................................................................................................5
Conclusion...................................................................................................................................................5
References...................................................................................................................................................6

Accountants and auditor’s responsibilities and contribution towards corporate governance: A
case study of Wesfarmers 3
Client Organisation
The topic of the research proposal is ‘The Responsibilities of the Auditors and Accountants and
their Contributions toward Corporate Governance in Wesfarmers. ’According to Wesfarmers
(n.d) Wesfarmers Limited was originated in 1914 and is one of the largest listed companies in
Australia. It deals in liquors, hotels, convenience stores, departmental stores, supermarkets with
its industrial division dealing in fertilizers, industrial and safety products.
The company has formulated the Audit and Risk Committee for recognizing, regulating and
administering the risks associated with commercial activities operated by the group.
Research Background
As per ASIC(2014) in the context of corporate governance issues, Wesfarmers is facing various
problems such as regulation and monitoring of risk , management of corporate information and
resolution of conflicts.
These problems are resolved by establishment of various committees and formulation of
various policies. The board has established the nomination committee, an audit and risk
committee and remuneration committee for the management and regulation of risk and to avoid
conflict of interest (Governance, n.d.).
The audit and risk committee is specifically established for the compliance of the governance
policies and practices to follow the commendations as per the ASX Principles.
Research Problem / Research Question
This research has attempted to focus on the questions such as :
 Are the auditors and accountants aware of the disclosure of ‘Related Party Transactions
‘in the annual report of the company?
 Are the auditors and accountants aware of the revelations made by the directors
regarding their interests in the annual report of the company?
 Is the audit and risk management committee is functioning as per the ASX principles?

Accountants and auditor’s responsibilities and contribution towards corporate governance: A
case study of Wesfarmers 4
Research Aim and Objectives
The main aim of the research is to to analyse the issues related to the disclosure of the related
party transactions in the annual report of Wesfaremers. Also, the researcher has attempted to
assess whether the accountants and auditors are aware of the revelations made by the directors
regarding their pecuniary interets in the shares of the company or its realted body corporate.
The audit and the risk management committee formulated by the board of directors for the
adoption of good corporate govenance principes as per the ASX has also been analyzed by the
reasercher (Wesfarmers, 2017).
Literature Review
As per ASX (2014) in the context of listed entities, the disclosures should be made in the
annual report or on the website of the company. According to the Recommendation 1.1, the
auditors and accountants in the audit and risk management committee should formulate
appropriate risk management framework according to which the management is expected to
operate.
As per recommendation 4.1 separate audit committee should be formualted in order to bring
independency of jugdemet , transperancy and focus to supervise the corporate reporting
procedure.
As per Safari, Mirshekary and Wise (2015) according to the Accounting Standard AASB 124
Related Party Disclosures, the company should disclose all the realted party transactions in the
annual report of the company . Also, the auditors and accountants should be aware of the
disclosures made by the directors related to their interets in the annual report of the company.
As per Langford (2015) the directors of the listed entity should disclose their interests so that
the company can abide by the norms of the Listing Rules. The auditors and the accountants
should verify the disclosures made by the directors and make sure that the information is
disclosed on the website of the company and in its annual report.
As per Nottage and Aoun (2016) for following the principles of good corporate governance, the
audit and risk management committee which consists of accountants and auditors should
review the company’s financial reports and recommend to the board regarding the review of
various accounting policies.
As per Tušek (2015) the audit and the risk management committee has the responsibility to
protect the integrity of the financial and non-financial reporting of the company. The auditors
and the accountants are accountable for the internal and external audit and control. It should act
according to the Australian Accounting Standards and Corporation Act 2001.

Accountants and auditor’s responsibilities and contribution towards corporate governance: A
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Data Collection Plan
For this research, the researcher shall use primary and secondary data collection methods. The
researcher shall use both quantitative and qualitative methods to collect data. There are various
kinds of data collection methods such as observation, survey through a questionnaire and
conducting interviews to collect the data. Additionally, the secondary methods such as
collecting data from the existing sources such as journals, government publications, books and
offline sources etc.
In this research, the researcher shall use the probability sampling methodology to prevent
biasness from the research. Also, the data analysis method shall enable the researcher to assess
the collected data to arrive at a feasible result. The researcher shall use the statistical data
analysis method to assess the collected data of the research. The researcher will implement the
MS Excel tools such as pie chart, bar and column diagram to analyze the collected data (Sutton
and Austin, 2015).
Ethical Consideration
In this research, the researcher has used the Data Safety and Security Act 1988 to protect the
data of the participants and make a healthy relationship with them. The researcher ha also
implemented the principles adopted by the Norwegian National Committee for Research Ethics
which states that the researcher shall treat the participants with respect. The research proposals
shall be designed and implemented fairly. He should maintain the confidentiality of the data
collected by the participants and collet data with their informed consent. The data collected
should be impartial and uninfluenced by any participant. It will help to avoid the ethical issues
from the research.
Conclusion
Hence, to conclude, it can be said that the topic of the research proposal ‘the roles and
responsibilities of the accountants and the auditors regarding the implementation of good
corporate mechanism in Wesfarmers ‘ has been analyzed and assessed by the researcher. The
researcher has analyzed various dimensions of the study and concluded that with the
establishment of audit and risk management committee in Wesfarmers, the auditors and the
accountants have been able to address the issues related to the compliance of the corporate
governance norms.

Accountants and auditor’s responsibilities and contribution towards corporate governance: A
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References
ASIC (2014) Corporate governance [online] Available from: http://asic.gov.au/regulatory-
resources/corporate-governance/[Accessed 8th April 2018].
ASX (2014) Corporate Governance Principles and Recommendations [online] Available from:
https://www.asx.com.au/documents/asx-compliance/cgc-principles-and-
recommendations-3rd-edn.pdf [Accessed 8th April 2018].
Governance (n.d.) 2017 Corporate Governance Statement [online] Available from:
http://www.wesfarmers.com.au/docs/default-source/corporate-governance/2017-
corporate-governance-statement.pdf?sfvrsn=2 [Accessed 8th April 2018].
Langford, R.T. (2015) Directors’ duties. Company & Securities Law Journal. 33(205).pp. 141.
Nottage, L. and Aoun, F. (2016) The Rise of Independent Directors in Australia: Adoption,
Reform, and Uncertainty . University of Miami International and Comparative Law
Review. 23(2), pp. 573-686.
Safari, M., Mirshekary, S. and Wise, V. (2015) Compliance with Corporate Governance
Principles: Australian Evidence. Australasian Accounting, Business and Finance Journal.
9(4), pp. 3-19.
Sutton, J. and Austin, Z.(2015) Qualitative Research: Data Collection, Analysis, and
Management. The Canadian Journal of Hospital Pharmacy. 68(3),pp. 226-231.
Tušek, B. (2015) The influence of the audit committee on the internal audit operations in the
system of corporate governance – evidence from Croatia. Economic Research. 28(1), pp.
187-203.
Wesfarmers (2017) 2017 Annual Report [online] Available from:
https://www.wesfarmers.com.au/docs/default-source/default-document-library/2017-
annual-report.pdf?sfvrsn=0 [Accessed 8th April 2018].
Wesfarmers (n.d.) Who we are [online] Available from: http://www.wesfarmers.com.au/who-we-
are/who-we-are [Accessed 8th April 2018].