Financial Misconduct at AMP Limited: A Business and Ethical Report

This report examines the financial misconduct perpetrated by AMP Limited, focusing on its failure to act as a good steward, uphold common good principles, and maintain social responsibility. The company charged clients fees for no service, leading to significant financial losses and reputational damage. The report assesses the ethical conduct of AMP Limited's accountants in relation to APES110 and APES230, highlighting violations of ethical codes. It explores the purpose of auditing in exposing misconduct and promoting socially responsible outcomes. The analysis covers the company's performance, ethical breaches, and the role of auditing in uncovering these issues. The report concludes with recommendations for improving internal controls and regaining public trust. References to various academic sources support the findings and analysis of AMP Limited's failures.

UNIVERSITY NAME
Student’s Name
ID
INSERT TITLE

AMP Limited Business Report
Introduction
AMP Limited is the largest retail and corporate service provider and has for a long time been a
trusted source of financial services and financial advice in Australia.
This report basically outlines a misconduct that has been perpetrated by AMP Limited in the
course of its operation and the effects it has therein. AMP Limited has ripped off its customers
by charging fees for no service to its clients, (Hoque, Islam and Azam (2013). The misconduct
had been perpetrated by the Company’s most senior executives and this places the company at a
risk of facing serious criminal charges.
The report will look into AMP Limited’s performance in its financial planning and insurance
activities for the year 2017 in respect to common good, stewardship, sustainability and social
responsibility in their operation. The report will also give an assessment of the ethical conduct of
AMP Limited Accountants in accordance to APES110 and APES230. In the assessment of it all
the report will outline the purpose of auditing and its function in promoting socially responsible
outcomes, common good and stewardship. Laitinen (2014)
The report will at the end outline the conclusion and recommendation from the findings
achieved.
The audit process that was conducted followed the following steps

AMP Limited Performance
AMP Limited is seen to have failed in its performance in respect to its role of acting as a good
steward, acting for the common good of all the interested parties as well as being socially
responsible.
Common Good
The principle of common good states that whatever outcome that results from activities that are
carried out should be for the benefit of all the parties that are in play and should at no one point
benefit one party over the other.
AMP has failed in the performance of this duty because it has reaped benefit from one of its
stakeholders (the customers) but failed to deliver services for the paid fees.
Stewardship
Stewardship entails the act of being entrusted with something and managing it faithfully and
honestly. AMP Limited has also failed in its role to work as a good steward as seen in the
information they have been providing to ASIC. As a steward AMP Limited should be honest in
its dealings but instead it has misled ASIC 20 times about the nature and extent of its fee for no
service dealing.

Sustainability and Social Responsibility
As a result of this misconduct, AMP Limited’s sustainability has been interfered with. This is
seen in its financial position as well as the ability of the management of the Company to stay
intact and some officials retaining their positions, Camilleri (2017)
Financial wise AMP Limited has had a 6.5% fall in stock value and lost over $900 of company
value due to the ongoing misconduct. The share Price has also lost a sixth of its value. The
Company also faces criminal penalties and fines of up to $1 million for the breach perpetrated as
the result of the misconduct.
EMP Limited has a social responsibility to ensure that the community benefits from its
operations either directly or indirectly. Instead it has involved in fraud that has the same
community that trusted them, Christensen, Kent and Stewart (2010).
Ethical Conduct of Accountants
Ethics generally states what is right or wrong in a particular dealing at hand.
Apes 110
Apes 110 provide the code of ethics for accountants.
Apes 110 emphasizes on the need of individuals in the accountancy profession to act in public
interest rather than just satisfying the interest of an individual client or the interest of their
employer. In fulfilling the requirements of this code of conduct an accountant is required to be
honest in his profession and not to allow a conflict of interest to direct the decisions they ought to
make, Akers and Giacomino (2011)
It is clear that the accountants of AMP Limited went contrary to this code of conduct as they did
not act for the interest of the public but rather followed the interest on AMP Limited their
employer and ripped the public of their interest.
Apes 230
Apes 230 (Financial Planning Service) sets out the vital requirements and important guidelines
for individuals engaged in the provision of quality and ethical financial planning services,

Fiolleau (2013). EMP Limited accountant went against the guidelines which are set by Apes 230
in respect to provision of financial services.
Purpose of Auditing
Auditing involves financial assessment and inspection of company’s activities, financial
information and dealings to ensure that operations are done as per the companies policies and
there are no fraudulent dealings, Arena and Sarens (2015)
In the Context of AMP Limited, auditing played a big role in exposing the misconduct that AMP
Limited perpetrated. Apes 230 and Apes 110 as an auditing aid proves that the employees of the
company (Accountants) did not follow the required code of conduct in their dealings, they were
aware of the misconduct but did not bother to expose it. Hay (2014)
Auditing normally exposes weaknesses in a system and provides recommendations to correct the
deficit. It specifically highlights what wrong was done, when it was done, how it was done and
who did it Andrikopoulos et al., (2015). Because of this the aspects of common good,
stewardship and social responsibility are normally adhered to by organizations because
perpetrators are aware that auditing will eventually expose their dirty or contrary dealings.
The main three line of auditing defense model is illustrated below.

Conclusion
This report shows the effect the misconduct has had on AMP Limited. Despite being the giant it
has been, the misconduct has greatly affected the business both financially as well as spoiling its
reputation.
It should be noted that, despite the knowledge of the ongoing misconduct among a number of
employees and officials in the Company no one bothered to be a whistle blower. This means that
they were either involved in one way or another or the Company had a weak internal Control
system that could not make the misconduct to be spotted and the perpetrators be brought to book
before it was too late. Jones Christensen, Mackey and Whetten (2014)
It can be recommended that AMP adopts a strong internal control system that will prevent easy
collusion between employees. The company can also be advised to regain its reputation by
laying of any employees that are thought to be involved in the misconduct so as to give the
Company a fresh start.

References
Akers, M. and Giacomino, D. (2011) Ethics And The Accountants' Code Of Conduct. Journal of
Applied Business Research (JABR), 16(3).
Andrikopoulos, A., Bekiaris, M., Vadasi, C. and Zounta, S. (2015). International Collaboration
in Auditing Research: A Note. International Journal of Auditing, 20(1), pp.66-71.
Arena, M. and Sarens, G. (2015). Editorial: Internal Auditing: Creating Stepping Stones for the
Future. International Journal of Auditing, 19(3), pp.131-133.
Camilleri, M. (2017). Corporate sustainability and responsibility: creating value for business,
society and the environment. Asian Journal of Sustainability and Social Responsibility, 2(1),
pp.59-74.
Christensen, J., Kent, P. and Stewart, J. (2010). Corporate Governance and Company
Performance in Australia. Australian Accounting Review, 20(4), pp.372-386.
Fiolleau, K. (2013). More than Just the Numbers: Can Organizational Objectives Increase
Accountants’ Recognition of Ethical Issues?. SSRN Electronic Journal.
Hay, D. (2014). Auditing, International Auditing and the International Journal of Auditing:
Editorial. International Journal of Auditing, 18(1), pp.1-1.
Hoque, M., Islam, M. and Azam, M. (2013). Board Committee Meetings and Firm Financial
Performance: An Investigation of Australian Companies. International Review of Finance, 13(4),
pp.503-528.
Jones Christensen, L., Mackey, A. and Whetten, D. (2014). Taking Responsibility for Corporate
Social Responsibility: The Role of Leaders in Creating, Implementing, Sustaining, or Avoiding
Socially Responsible Firm Behaviors. Academy of Management Perspectives, 28(2), pp.164-178.
Laitinen, E. (2014). Influence of cost accounting change on performance of manufacturing
firms. Advances in Accounting, 30(1), pp.230-240.