Audit Assurance and Compliance Report: Adelaide Brighton Analysis

This report provides an in-depth analysis of the audit assurance and compliance practices of Adelaide Brighton Ltd. It begins with an executive summary and introduction, followed by an examination of the company's adherence to the ASX Corporate Governance Principles. The report assesses the risks faced by the business, detailing risk mitigation strategies employed by the organization. Furthermore, it includes a common size statement analysis, ratio calculations, and balance sheet analysis to depict financial performance and changes. The report covers macroeconomic conditions, regulatory compliance, climate change impacts, energy pricing, foreign currency fluctuations, and trade credit risks. The conclusion summarizes the findings, emphasizing Adelaide Brighton's commitment to ethical decision-making and compliance. References are provided at the end of the report.

Running head: AUDIT ASSURANCE AND COMPLIANCE
Audit Assurance and Compliance
Name of the Student
Name of the University
Authors Note
Course ID

1AUDIT ASSURANCE AND COMPLIANCE
Table of Contents
Executive summary:...................................................................................................................2
Introduction:...............................................................................................................................3
Application of ASX Corporate Governance Principles.............................................................3
Risk Assessment.........................................................................................................................5
Name of the Company:..............................................................................................................5
Market Overview:......................................................................................................................5
Regulatory Authority:................................................................................................................5
Business strategy:.......................................................................................................................6
Calculation of Common size statement, ratios and balance sheet:............................................6
Conclusion:..............................................................................................................................16
References................................................................................................................................18

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Executive summary:
Corporate governance can be defined as the manner in which an organization is governed.
Corporate governance is referred as the techniques through which companies are directed or
administered. The present report would be evaluating the corporate governance principles of
Adelaide Brighton Company to examine whether the company corporate governance
strategies are in compliance with the ASX Code of Corporate Governance Principles. The
report would be examining the relevant risk associated with the business and would provide a
detailed risk mitigation strategies undertaken by the organization. The report would further
cover the common size statement analysis of Adelaide Brighton Ltd to depict the variance
and the percentage change.

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Introduction:
Adelaide Brighton Ltd is considered as the Australian producer of the cement,
blended goods and lime products. Adelaide Brighton Ltd carries the operational functions of
manufacturing and facilities of distribution in parts of Southern Australia, Northern Territory
and New South Wales. The Adelaide Brighton Ltd is related with numerous brands of
company that comprises of Geelong Cement, Sun state Cement and suppliers of building
products. Adelaide Brighton Ltd is listed on the Australian Stock Exchange under the ASX
300. The primary objective of this report is to understand the principles of corporate
governance of Adelaide Brighton Ltd and additionally give a detailed explanation of the
corporate risk faced by business together with the risk assessment strategy.
Application of ASX Corporate Governance Principles.
The major part of the Adelaide Brighton Ltd board of directors continues to remain
independent that is in compliance with the principles as well as the recommendations of the
ASX corporate governance council (Tricker and Tricker 2015). Adelaide Brighton Ltd has
remained committed relating to the highest standards of the corporate governance and the
approach undertaken to align with the taxation with the strategies of corporate governance
and code of conduct.
In compliance with the level of principles for foundations with the management as the
board of directors of Adelaide Brighton Ltd optimises the performances of the company and
its subsidiaries (Du Plessis, Hargovan and Harris 2018). The board lay downs the foundations
for creating the policies and regulating the business affairs of the company on behalf of its
shareholders.
Adhering with the principles of board structure the board of directors of Adelaide
Brighton Ltd adds value by making sure that majority of independent directors views are

4AUDIT ASSURANCE AND COMPLIANCE
bought into the decision making (Hale and Held 2018). The board of directors constantly
assess the performance in order to facilitate the constant improvement.
The company adheres with the principles of making continuous disclosure by giving
necessary information and disclosing in timely manner to the shareholders regarding the
wider market conditions (Davies 2016). Adelaide Brighton Ltd complies with the principles
of making continuous disclosure regimes that are in adherence with the Corporate Act 2001.
Adelaide Brighton Ltd corporate governance code of conduct is committed to the
encouraging ethical and accountable decisions making. Adelaide Brighton Ltd directors and
employees acts with the highest integrity and honesty (ArAs 2016). The company further
strengthens its ethical atmosphere as it promotes acting with integrity, honesty and fairness.
Adelaide Brighton Ltd abides with the law and regulations.
The board of directors of Adelaide Brighton Ltd constantly reviews the size and
composition of the board to make sure that the correct skills and perspective are presented.
The company provides the matrix of skills in order to demonstrate the diversity of the non-
executive directors and their experience (Knechel and Salterio 2016). The composition the
board that is presented is in compliance with the circumstances of the organization.
The company in compliance with the principles of remunerating fairly, it incorporates
the robust performance measures with its tactical plans that provides the outcomes of
remunerations to reflect with the business performance over the year (Bottomley 2016). The
company delivers strong remuneration of $1.56.

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Risk Assessment
Name of the Company:
The nature of the business for Adelaide Brighton Ltd comprises of the integrated
construction of materials and produces lime. The Adelaide Brighton Ltd nature of business
consist of supplying wide range of building products, constructions, infrastructure and
material processing into the Australian markets (Hopt 2016). Adelaide Brighton Ltd is
regarded the second largest producer of cement with major of the business production
facilities are located to the positions of reserve rich states of South Australia. Adelaide
Brighton Ltd has several number of investment in the joint venture and association in the
constructions of materials products. The company has several cement distribution joint
venture in the regions of Queensland as well.
Market Overview:
The Adelaide Brighton Ltd east coast market of constructions is supported by the
strong rise in the activity of the residential with strong rise in the non-residential buildings
and activities of infrastructure. The market of Adelaide Brighton Ltd southern Australia is
boosted by the strong demand in the infrastructure (Scholte 2017). The markets of Southern
East Australia have constantly reflected a strong growth. The market demand for the Western
Australia have stabilized during the latter half of the year and further fell down in the
Northern Territories.
Regulatory Authority:
The business actions of the Adelaide Brighton Ltd is generally governed and
regulated by the principles of Corporation Act 2001. The company complies with the
accounting standard of Australia that consist of the interpretation of the accounting and
companies ASX CGC policies.

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Business strategy:
The business strategy of Adelaide Brighton Ltd is based on increasing the concrete
and aggregate business with the help of aggregate business with the help of three striking
concretes and aggregate acquisitions in Victoria, territories of Northern Australia and South
Australia (Crowther and Aras 2016). The company constantly makes investment in the
organic growth initiatives and employs its hard effort in working out the operational
improvement with the help of important long term business aspects.
Calculation of Common size statement, ratios and balance sheet:

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Particulars 2016 2017
Revenue (A) 1,396 1,560
Net Profit/Loss after Tax (D) 186.2 182.1
Ordinary Equity(H) 1220 12248.2
Total Assets (G) 1826.7 2013
Net Profit Margin (D/A) 13.34% 11.67%
Return on Equity (A/H)) 15.26% 1.49%
Return on Assets (G/D) 10.19% 9.05%
Profitability Ratio Analysis:-
Adelaide Brighton
2016 2017
10.50%
11.00%
11.50%
12.00%
12.50%
13.00%
13.50% 13.34%
11.67%
Net Profi t Margin
Adelaide Brighton
Figure 1: Figure representing Net Profit Margin
(Source: As Created by Author)

9AUDIT ASSURANCE AND COMPLIANCE
2016 2017
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
15.26%
1.49%
Return on Equity
Adelaide Brighton
Figure 2: Figure representing Return on Equity
(Source: As Created by Author)
2016 2017
8.40%
8.60%
8.80%
9.00%
9.20%
9.40%
9.60%
9.80%
10.00%
10.20%
10.40% 10.19%
9.05%
Return on Assets
Adelaide Brighton
Figure 3: Figure representing Return on Assets
(Source: As Created by Author)

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Particulars 2016 2017
Cost of Goods Sold(A) 885.8 1009.9
Inventory (H) 160.2 174.3
Revenue (A) 1,396 1,560
Total Assets (G) 1826.7 2013
Inventory Turnover Ratio
(A/H)) 5.53 5.79
Total Asset Turnover
Ratio (A/G) 0.76 0.77
Adelaide Brighton
Efficiency Ratios Analysis
2016 2017
0.74
0.76
0.78
0.76
0.77
Total Asset Turnover Rati o
Adelaide Brighton
Figure 4: Figure representing Total Asset Turnover Ratio
(Source: As Created by Author)

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2016 2017
5.35
5.40
5.45
5.50
5.55
5.60
5.65
5.70
5.75
5.80
5.85
5.53
5.79
Inventory Turnover Ratio
Adelaide Brighton
Figure 5: Figure representing Inventory Turnover Ratio
(Source: As Created by Author)
2016 2017
Total Current Assets (A) 390.1 474.8
Receivables (D) 204.6 241
Cash and equivalents (B) 21.5 57.6
Total Current Liabilities (F) 168 204.8
Current Ratio (A/F) 2.32 2.32
Quick Ratio [(B+D)/F) 1.35 1.46
Short-Term Liquidity Ratio Analysis:-
Adelaide Brighton