HI6026 - Amcor Limited: Audit, Assurance, and ASX Compliance

This report provides an analysis of audit, assurance, and compliance practices at Amcor Limited, an ASX-listed company. It details the company's adherence to the ASX Corporate Governance Principles, examining how each of the eight principles is implemented within Amcor's operations. The report also includes a risk assessment, focusing on the nature of the company, its market overview, regulatory environment, and business strategy. Financial analysis, including common size income statement and balance sheet ratios, is performed to assess Amcor's liquidity and solvency position over a specified time frame. The study concludes by summarizing the key findings related to auditing, assurance, and compliance within the company.

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

2AUDIT, ASSURANCE AND COMPLIANCE
Table of Contents
Executive Summary.........................................................................................................................2
Implications of ASX Corporate Governance Principles for Amcor Limited..................................2
Risk assessment...............................................................................................................................7
Conclusion.....................................................................................................................................11
References and Bibliography.........................................................................................................12

3AUDIT, ASSURANCE AND COMPLIANCE
Executive Summary
In this assignment, there was a need to understand the concept of audit, assurance and
compliance that takes place within a company. Amcor Limited had been selected for this study
and proper emphasis had been given in understanding the strategies used by this company to
retain their directors. Amcor Limited is one of the packaging companies that is listed in
Australian Stock Exchange and operates in Australia. The study properly provides details about
the ASX Corporate principles by explaining each 8 principles separately on how far Amcor
Limited follows these principles in their operations. Risk assessment strategies used by Amcor
Limited had been explained in the study by putting emphasis upon the nature of the company. At
the end, computation had been done to understand the liquidity and solvency position of Amcor
Limited within given time frame. This study deals with understanding the auditing, assurance
and compliance within companies.
Implications of ASX Corporate Governance Principles for Amcor Limited
At Amcor Limited, the company engages in achieving as well as representing the highest
standards of corporate governance. Addition to that, the Board of Directors is responsible to
refine as well as bring improvement in the governance framework so that shareholders are
informed regarding any changes made within the company. The main corporate governance of
Amcor Limited had been summarized in the statement that is available in the website of the
corporation.
“Principle 1- Laying solid foundations for management and oversight”

4AUDIT, ASSURANCE AND COMPLIANCE
At Amcor Limited, it is the accountability of the Board of Directors to look at the
corporate governance as well as provide strategic guidance at the same time. The Board of
Directors in this company guides as well as monitors the trade and activities within Amcor
Limited on behalf of the stakeholders by whom they are electable and accountable. The
management of Amcor Limited has to develop business plans, prepare budgets as well as involve
in business approach for the Board’s consideration and to get it accepted by the Board. The
management needs to operate the trade within the parameters as set by the Board on timely basis
as well as even informing the Board regarding all the material developments relating to business
(Vasarhelyi, Alles and Kogan 2018). Therefore, Amcor Limited had established as well as
disclosed their roles and responsibilities of its Board and Management and is performing well for
smooth functioning of business enterprise.
“Principle 2- Structure the Board to add value”
The Composition of Board members is determined based on criteria as set out in the
Constitution of the company as well as Board Charter. The Board Member has a good mix of
skills as well as diversity that need to get align with the strategy planned by the company that
result in good corporate governance and oversight (Vanstraelen and Schelleman 2017).
Therefore, Amcor Limited has Board of appropriate size, composition as well as skills and
commitment that enables in discharging their duties in an effective way.

5AUDIT, ASSURANCE AND COMPLIANCE
“Principle 3- Promoting ethical and responsible decision-making”
It is the responsibility of the Directors to keep the Board recommend on an continuing
basis of any interest. It is the Board who had been engaged in developing procedures so that they
can assist Directors for disclosing potential conflicts of interest on yearly basis. At Amcor
Limited, they believe in recognizing the importance of honesty as well as integrity and honesty at
the time of dealing with business (Cuadrado-Ballesteros, Martínez-Ferrero and García-Sánchez
2017). The company is committed towards increasing value with their shareholders so that they
can fulfill the responsibilities to become good corporate citizen.
At Amcor Limited, they encourage co-workers where they can account any unlawful
activity in good faith. The company tries to give an atmosphere free from victimization and any
inappropriate behavior. Furthermore, the business operates a Whistleblower service that can help
the workers for reporting any potential misconduct they face while working at the company. It is
the responsibility of the Whistleblower Committee to protect co-workers from victimized as a
consequence of making account of supposed misconduct. Therefore, Amcor Limited acts
ethically and responsibly in their operations.
Principle 4- Safeguarding integrity in financial reporting
PWC was selected as external auditor by the shareholders. Addition to that, the External
auditor is responsible to present an annual declaration of their autonomy and report it to the
Audit Committee. Here, the external auditor had successfully met with the Audit and observance
Committee without supervision being present at each Committee meeting (Schmidt, Wood and
Grabski 2016).

6AUDIT, ASSURANCE AND COMPLIANCE
Before approval of financial statement by the Board, Managing Director and CEO of
Amcor Limited give announcement that the monetary records of the business have been correctly
maintained. Even, the financial statements of the company had properly complied with relevant
accounting standards as well as given a true and fair view of the financial position and
presentation of the business. In addition to that, the opinion has been formed based on a sound
risk management as well as internal control that had been operated in an effective way (Earley
2015). Therefore, Amcor Limited has formal as well as rigorous process that can get verified
independently as well as engage in safeguarding the integrity of its corporate reporting.
“Principle 5- Making timely and balanced disclosure”
At Amcor Limited, they have established policies as well as procedures so that they can
ensure timely as well as balanced revelation of all the material matters on timely basis. The
strategy as well as procedures takes into account Comprehensive Disclosure Policy that need
recognition of matters and have material effect on the price of securities of the corporation and
notifies them to the Australian Stock Exchange. Amcor Limited believes in conducting investor
relations agenda that enhances two-way communication with the shareholder and allowing
investors to gain greater understanding of the industry, monetary performance, governance and
forecast in the most appropriate way (Fernandez-Feijoo, Romero and Ruiz 2016). Therefore,
Amcor Limited makes timely as well as balanced disclosures on all the matters relating the
responsible person who would anticipate having a material consequence on the price or worth of
its securities.

7AUDIT, ASSURANCE AND COMPLIANCE
“Principle 6- Respecting the rights of security holders”
Shareholders may send communications to the business or its share registry through
electronic means and even given the alternative for receiving communications in an effective
way. It is the Board of Directors who supports full contribution by shareholders at the time of
Annual General Meeting as it ensures high level of Director Answerability. Addition to that,
shareholders are appeal to vote on matters like election as well as collective payment of
Directors. Therefore, Amcor Limited respects the rights of its shareholders by providing them
with relevant or accurate information and facilities as it allows them to exercise those rights in an
effective way.
Principle 7- Recognizing and managing risk
At Amcor Limited, they understand the rigorous risk management and how it is necessary
for commercial steadiness as well as for sustaining its competitive market position as well as
long-term performance. There are several objectives that drive approach of this company to
understand risk administration. The corporation should have a culture that is risk aware as well
as maintaining by high standards of responsibility. It will even help in improving the confidence
of shareholders and bring level of trust (Kend, Houghton and Jubb 2014). Therefore, Amcor
Limited had established sound risk management framework as well as reviewed the effectiveness
of that framework on periodical basis.
Principle 8- Remunerating fairly and responsibly
It is the responsibility of Human Resource Committee to analysis and makes suggestion
to the Board on several remuneration packages and policies that is pertinent to the Managing

8AUDIT, ASSURANCE AND COMPLIANCE
Director and CEO. The company encourages retention of senior management by providing
incentive performance schemes to them. At Amcor Limited, majority of the members are
independent by nature (Marques 2018). Therefore, Amcor Limited pays their directors with
sufficient remuneration so that they stay and in this way the company retains high quality
directors. The company believes in motivating high quality senior executives by aligning with
their interests with creation of value of security holders as a whole.
Risk assessment
Amcor Limited is one of the Australian companies that are listed in Australian Stock
Exchange. The strategy of the company is to engage in sustainability and considers it as a good
practice. The company engages in providing quality products to the customer (Martínez-Ferrero
and García-Sánchez 2016).
In this study, the tools that had been used to assess the risk of Amcor Limited were
common size income statement and balance sheet ratios. The computation had been done as
under:
Common Size Income Statement
Common Size Income Statement
Particulars
2013 2014 2015 2016 2017
Amou
nt ($
mill)
Per
cent
age
Amou
nt ($
mill)
Per
cent
age
Amou
nt ($
mill)
Per
cent
age
Amou
nt ($
mill)
Per
cent
age
Amou
nt ($
mill)
Per
cent
age
Revenue 12425
100
% 10853
100
% 12515
100
% 12687
100
% 11832
100
%
Cost of revenue 10230
82
% 8804
81
% 9999
80
% 10001 79% 9346 79%
Gross profit 2195
18
% 2050
19
% 2516
20
% 2686 21% 2485 21%

9AUDIT, ASSURANCE AND COMPLIANCE
Operating
expenses
Sales, General
and
administrative 4013
32
% 3215
30
% 4005
32
% 4891 39% 3898 33%
Other operating
expenses 339 3% 402 4% 412 3% 12033 95% 11686 99%
Total operating
expenses 4555
37
% 3700
34
% 4549
36
% 5458 43% 4455 38%
Operating income -2359
-
19
% -1650
-
15
% -2033
-
16
% -2772
-
22% -1969
-
17%
Interest Expense 247 2% 240 2% 256 2% 271 2% 259 2%
Other income
(expense) 3403
27
% 2857
26
% 3456
28
% 3594 28% 3224 27%
Income before
income taxes 797 6% 967 9% 1167 9% 551 4% 995 8%
Provision for
income taxes 168 1% 198 2% 245 2% 182 1% 197 2%
Minority interest 0 0% 0 0% 0 0% 0 0% 0 0%
Other income -28 0% -32 0% -36 0% -40 0% -22 0%
Net income from
continuing
operations 628 5% 769 7% 922 7% 368 3% 798 7%
Net income from
discontinuing ops 0 0% 0% 0% -3188
-
25% 111 1%
Other -28 0% -32 0% -36 0% -40 0% -22 0%
Net income 601 5% 565 5% 886 7% 329 3% 776 7%
Net income
available to
common
shareholders 601 5% 565 5% 886 7% 329 3% 776 7%

10AUDIT, ASSURANCE AND COMPLIANCE
Common-size Balance Sheet
Common Size Balance Sheet
Asset
s
2013 2014 2015 2016 2017
Amoun
t ($
mill)
Perc
enta
ge
Amoun
t ($
mill)
Perc
enta
ge
Amoun
t ($
mill)
Perc
enta
ge
Amoun
t ($
mill)
Perc
enta
ge
Amoun
t ($
mill)
Perc
enta
ge
Curre
nt
assets 4198 34% 3532 28% 4444 36% 7427 60% 6994 56%
Non-
curre
nt
assets 8224 66% 6166 50% 6685 54% 16075
129
% 15922
128
%
Total
assets 12,421 100
% 9,697 100
% 11,129 100
% 23,502 100
% 22,916 100
%
Liabil
ities
Curre
nt
liabili
ties
4,701
38%
3,499
28% 4,784 39% 8,993 73% 8,824 72%
Non-
curre
nt
liabili
ties 4,020 33% 3,927 32% 4,278 35% 5,728 46% 4,216 34%
Total
liabili
ties
8,720
71%
7,426
60%
9,063
74%
14,721 119
%
13,040 106
%
Stock
holde
rs'
equity
3,607
29%
2,155
17%
1,909
15%
8,781
71%
9,876
80%
Total
liabili
ties
and
Equit
y
12,328
100
% 9,581
100
% 10,972
100
% 23,502
100
% 22,916
100
%

11AUDIT, ASSURANCE AND COMPLIANCE
Computation of Balance Sheet ratios
Statement Showing Ratios
Particulars Formula 2013 2014 2015 2016 2017
Balance Sheet ratio
Current Ratio Current Assets/ liability 0.89 1.01 0.93 0.83 0.79
Debt equity ratio Debt/ Equity
1.114
5 1.8223
2.241
0 0.2437 0.4269
From the annual report of Amcor Limited, computation had been done on the balance
sheet ratios for the years 2013 to 2017. There are two ratios that had been calculation to
understand the financial position of Amcor Limited. The first ratio is current ratio that helps in
understanding the liquidity position of Amcor Limited for a period of 5 years. From the above
calculation, it can be seen that there is constant decrease in current ratio that cannot be treated
favorable condition for the company. The ideal current ratio is 2:1 and it can be seen that
company was not closer to ideal ratio in these 5 years of time span. This means Amcor Limited
has insufficient current ratios and faces difficult to manage daily operations as well as short-term
obligations. It is recommended to the company to increase their current assets so that they can
indulge in smooth functioning of business practices (Peters and Romi 2014).
The second ratio that had been calculated above is debt equity ratio and it is one of the
solvency ratios that portray solvency position of Amcor Limited. There had been increase in debt
to equity ratio from 2013, 2014 and 2015, but after that there was unbelievable decrease in this
ratio by the year 2016 and 2017. This proves that Amcor Limited faces solvency issues by the
end of 2017 (Baylis et al. 2017).

12AUDIT, ASSURANCE AND COMPLIANCE
Conclusion
From the above analysis, it can be evaluated that Amcor Limited is a well-known
packaging company based in Australia. The company complies by all 8 Corporate Governance
Principles that had been explained in detailed manner. In order to understand about risk
assessment, computation had been done by using Common size income statement and balance
sheet ratios for Amcor Limited for the year 2013 to 2017. It had been noted that company has to
maintain their current assets in their operations so that they have the ability to meet short-term
obligations in the near future. Furthermore, the company needs to manage their debt by paying
on timely manner.