Audit Assurance and Compliance Report: Amcor Limited Analysis

This report provides a detailed analysis of Amcor Limited's audit assurance and compliance practices. It begins with an executive summary, followed by an examination of the company's adherence to the eight principles of corporate governance as outlined by the ASX Corporate Governance Council, including board responsibilities, ethical decision-making, financial reporting integrity, and shareholder rights. The report then delves into a risk appraisal of Amcor, using key financial ratios such as debt-equity ratio, quick ratio, receivable turnover, and operating margin to assess its financial health and leverage. Trend analysis of net income, revenue, assets, and liabilities is also included. Finally, the report suggests audit procedures to mitigate identified risks, focusing on liquidity, receivables, and debt management. The analysis highlights Amcor's commitment to good governance while identifying areas for potential improvement in financial risk management.

Running head: AUDIT ASSURANCE AND COMPLIANCE
Audit Assurance and Compliance
University Name
Student Name
Authors’ Note

2
AUDIT ASSURANCE AND COMPLIANCE
Table of Contents
Executive Summary...................................................................................................................2
8 Principles of Corporate Governance.......................................................................................2
Risk Appraisal............................................................................................................................8
References................................................................................................................................11

3
AUDIT ASSURANCE AND COMPLIANCE
Executive Summary
The current study examines commitment of the firm Amcor Limited towards achievement
and demonstration of higher standards of principles of corporate governance. This segment
analytically evaluates the nature as well as extent of conformation of the firm to the
principles of corporate governance laid down by the Corporate Governance Council of
Australian Stock Exchange. Furthermore, this study also throws light on risk assessment of
the firm using key financial ratio and analysis of trend over a specified period of time. This
analytical evaluation of the firm’s financial performance can help in identification and
comprehension of audit risk and assist in addressing the identified issues.
8 Principles of Corporate Governance
Analysis of the declarations released by the firm Amcor Limited reveals the fact that the
company Amcor Limited complies with the stipulations laid under the ASX Corporate
Governance Council’s Corporate Governance Principles along with recommendations of the
3td edition. Also, the assertion also incorporates different disclosures necessary for
conformation with the principles laid down by ASX (Simpson et al. 2016).
Principle1: “ Foundation/Basis for proper management along with oversight”
The board of directors of Amcor Limited is liable for the corporate governance of the firm.
The Board itself guides and at the same time monitors different business affairs of the firm
primarily on behalf of the shareholders of the entity by whom they are in actual fact elected
and are accountable to (Vasarhelyi et al. 2018). Responsibilities that are delegated to the
firm’s managing directors as well as the chief executive plus the executive management are
in line with the Group’s Delegated Authority Policy and these entrustments are monitored on
a regular interval. The responsibilities of management include:

4
AUDIT ASSURANCE AND COMPLIANCE
 Development of business plans, formulation of strategies for budgets approved by the
firm’s board and implementation of formulated plans
 operation of business within the established parameters set by the firm’s board and
keeping the board well informed regarding different material developments related to
the business
 identification and management of business risks that might perhaps materially affect
the operations of the business (William Jr et al. 2016)
 management of financial as well as other mechanisms of reporting for making certain
that these mechanisms are running effectually to cover all the pertinent information
 Undertaking all feasible steps to make certain that board of the corporation is
delivered all the correct as well as adequate information as regards operations of the
firm in a well timed manner
 Implementation of different policies, procedures along with codes of conduct
sanctioned by the board
Accountabilities of board
Some of the accountabilities include the following
- Overseeing overall management (Zhao et al. 2017)
Delivering strategic direction for business strategies
- Delivering oversight as regards occupational health as well as safety policies
-Tracking operational along with financial position
-Ensuring reporting mechanisms are adequate and appropriate (Zhou et al. 2016)

5
AUDIT ASSURANCE AND COMPLIANCE
-Identifying principle risks encountered by the firm and undertaking corrective actions for
mitigation of the same
Principle 2: Board Framework for adding value
Analysis of assertions proniounced by the firm reveals the fact that Amcor sets out report
specifying details of the board, experience of members of the board, their qualifications,
status of independence along with terms of office. All these are slated in the director’s profile
and therefore is said to abide by the principle of ASX CGS (Enekwe 2015)
The report also explains composition of the entire board that shows that composition of the
board is ascertained based on factors established in Company Constitution as well as the
Board Charter

6
AUDIT ASSURANCE AND COMPLIANCE
Principle 3: Promotion of ethical and at the same time accountable decision making
Dealing with Conflict of interests
As mentioned in the company’s report, directors have the need to keep the board informed
regularly regarding any kind of interests that in turn can potentially be in conflict with that of
the corporation (Griffiths 2016)
Code of conduct as well as ethics
The core principles of honesty, fairness as well as integrity are enshrined in values of the
company and the same are encapsulated in the Corporate Code of Conduct of Amcor
Limited. The company has a whistleblower policy as well as Whistleblower Committee
Charter that encourages their employees to report about any kind of wrong doing particularly
in good faith (Gitman et al. 2015). Also, the company has a anti-bribery policy as well as

7
AUDIT ASSURANCE AND COMPLIANCE
corruption policy that necessarily prohibits both bribery as well as corruption in process of
business dealings. Additionally, the company has a Share Trading Policy that outlines
requirements/laws of trading as per ASX Listing Regulations.
Principle 4: Protecting integrity in monetary reporting
Audit as well as Compliance Committee
The company has Audit as well as Compliance Committee that has prepared a charter
validated by the board and is essentially subject to regular assessment. The charter declares
that all the members of this committee need to be non-executive members and need to satisfy
the independence necessities (Knechel and Salterio 2016). This Committee also assists the
board in satisfying the accountability of overseeing overall quality as well as integrity of
particularly accounting, auditing as well as financial reporting procedures of the corporation.
Also, this Committee is liable for appointment, retention as well as compensation of firm’s
external auditors and oversees independence of auditors. The company Amcor Limited also
has appointed an external auditor PricewaterhouseCoopers in the year 2007.
Principle 5: Timely as well as balanced disclosure
The company Amcor has instituted policies as well as procedures that count a Disclosure
Policy. This Disclosure Policy includes recognition of various matters that might perhaps
have a material influence on prices of securities of the firm, notifying the same to Stock
Exchange, presenting pertinent information on website of the firm and presenting media
releases (Messier et al. 2015). The company also has Shareholder Communication Policy that
contains the following
- Presentation of annual report containing all relevant information regarding operations of the
entire consolidated business entity, financial information and alterations in circumstances

8
AUDIT ASSURANCE AND COMPLIANCE
-Half as well as full year results presented to ASX are made available to shareholrders
through webistes
- Different ASX pronouncements, pecuniary information as well as media releases
- Live webcast of firm’s Chairman’s speech during Annual General Meeting
Principle 6: Due respect to the shareholders’ rights
The company gives due respect to the shareholders of the firm by encouraging their
participation in the annual general meeting (Omar et al. 2014). This can make certain higher
level of accountability of the director to all their shareholder and shareholder recognition with
the strategy as well as goals of the company.
Principle 7: Detect and manage identified risks at once
Risk Management Structure
Amcor has a Risk Management Committee that has an established approach or tactic that
incorporates varied principles of effectual risk management. This is established as per the
requirements of International Risk Management Standard (that is ISO 31000, COSO standard
of Internal Control that is an Integrated Structure). The risk management framework of the
firm contains three different elements namely Appetite as well as Tolerance along with
Strategy and Policy. In addition to this, the company Amcor’s Business Continuity as well as
Crisis Management Program intends to enhance resilience of the corporation to different
exceptional incidents and contribute towards stable performance of the firm. Also, the
company has an internal audit that aids the Board to make certain conformation with Internal
Control as well as risk management programmes (Rezaee et al. 2018).

9
AUDIT ASSURANCE AND COMPLIANCE
Principle 8: Fair as well as responsible Remuneration Plan of Amcor
Amcor’s Human Resource Committee analyses and presents recommendations to the
company’s board on particularly packages of remuneration along with policies that are
applicable for Amcor’s Managing Directors as well as CEO, non-executive directors of the
corporation. Also, this committee is accountable for managing policies as well as procedures
for retention of firm’s senior management, schemes of incentive, leadership development of
executives along with succession planning (Rezaee et al. 2018). The company has a Human
Resource Committee Charter that helps in assessing the remuneration of the corporation.
Risk Appraisal
Background Information on Amcor Limited
Amcor Limited is well-known Australian-based transnational Packaging Corporation. The
company manufactures flexible as well as rigid packaging, primarily for food, health care,
tobacco segments along with sectors, as well. In addition to this, the company Amcor’s
products safeguards food, different pharmaceutical equipments, personal products, home and
personal care goods, beverage, medical equipments.
Regulators
The Australian Stock Exchange and the Corporate Governance Council Governance is said to
be regulating the firm.
The Company Amcor Limited
Business Strategies
- Developing growth potential of the firm sustainably
-Differentiating by standing out as well as standing ahead

10
AUDIT ASSURANCE AND COMPLIANCE
Risk Appraisal using key financial ratio
- Debt equity ratio is said to be 4.35 in 2016, however, the figure is said to have declined to
4.23 in 2017. This reflects comparatively low debt financing in comparison to equity
financing in 2017. However, the standard debt equity ratio is 1 (Omar et al. 2014). Therefore,
this figure essentially reflects higher amount of debt financing, higher leverage along with
greater trouble of interest of the firm. Although the figure has declined in the FY 2017, the
figure is much higher than 1 replicating undesirable financial condition.
-Quick ratio of the firm is calculated to 0.14 in 2016 and 0.13 in 2017. Therefore, it can be
said that the firm has a low quick ratio implying low capability of the corporation to disburse
payments to meet payment obligations of the firm during short term period utilizing quick
assets (Omar et al. 2014).
-Receivable turnover is recorded to be 7.88 in FY 2016 and 8.00 in FY 2017. Thus an
upward moving trajectory is evident from the figure calculated for the receivable turnover.
Higher ratio reflects desirable financial condition as this reveals that the credit sales of the
firm are more likely to be acquired than a firm with lower ratio (Omar et al. 2014).
- Operating margin is recorded to be negative as the operating income of the firm stands to be
negative (Rezaee et al. 2018). However, the condition is seen to improve in 2017 with lower
negative figure of operating income. However, the net profit margin is witnessed to increase
from 2.5% to 6.5% in 2017 reflecting desirable financial condition of the firm. Again, return
on equity of the firm is also recorded to have increased from 31.15% in 2016 to 72.59% in
2017, replicating higher potential of the firm to acquire returns from the available equity of
the firm.

11
AUDIT ASSURANCE AND COMPLIANCE
Risk Appraisal by way of analysis of trends
Analysis of trend of the firm reveals that the net income of the firm has improved by around
132% in FY 2017 as compared to the year ago period, although revenue sales figure of the
firm has decreased by approximately 6.7%. Again, total assets of the firm shows an upward
movement trajectory and is said to have improved by around 1.009% in 2017. Also, total
liabilities of the firm have also increased by approximately 0.9%.
Audit Procedures for mitigation of identified risks:
-assessing liquidity ratio of the firm and examining cash register for maintaining cash and
reconciliation of the same with the company’s bank statement
-Again Amcor’s receivables can be validated with mainly the days that are allowed for for
pay offs, analysing likelihood of bad debt (Rezaee et al. 2018).
-Maintenance of documents or account for Debt that can be checked time and again for
proper comprehension of fund sources and try to decrease payment compulsion for
particularly debt
-In a bid to increase profit, expenses can be minimised and all vouchers linked to expends can
be verified

12
AUDIT ASSURANCE AND COMPLIANCE
References
Enekwe, C.I., 2015. The relationship between financial ratio analysis and corporate
profitability: a study of selected quoted oil and gas companies in Nigeria. European Journal
of Accounting, Auditing and Finance Research, 3(2), pp.17-34.
Gitman, L.J., Juchau, R. and Flanagan, J., 2015. Principles of managerial finance. Pearson
Higher Education AU.
Griffiths, P., 2016. Risk-based auditing. Routledge.
Knechel, W.R. and Salterio, S.E., 2016. Auditing: Assurance and risk. Taylor & Francis.
Messier, W.F., Glover, S.M. and Prawitt, D.F., 2015. Auditing & Assurance Services: A
Systematic Approach. Qing hua da xue chu ban she.
Omar, N., Koya, R.K., Sanusi, Z.M. and Shafie, N.A., 2014. Financial statement fraud: A
case examination using Beneish Model and ratio analysis. International Journal of Trade,
Economics and Finance, 5(2), p.184.
Rezaee, Z., Sharbatoghlie, A., Elam, R. and McMickle, P.L., 2018. Continuous auditing:
Building automated auditing capability. In Continuous Auditing: Theory and Application (pp.
169-190). Emerald Publishing Limited.
Simpson, S.N.Y., Aboagye-Otchere, F. and Lovi, R., 2016. Internal auditing and assurance of
corporate social responsibility reports and disclosures: perspectives of some internal auditors
in Ghana. Social Responsibility Journal, 12(4), pp.706-718.
Vasarhelyi, M.A., Alles, M.G. and Kogan, A., 2018. Principles of analytic monitoring for
continuous assurance. In Continuous Auditing: Theory and Application (pp. 191-217).
Emerald Publishing Limited.