HI6026 Audit, Assurance, and Compliance: Corporate Governance Report

This report examines the influence of the eight ASX corporate governance principles on a company's audit processes. It analyzes how these principles impact risk assessment, audit approach, audit evidence, and audit strategy. The report delves into each principle, including laying solid foundations for management and oversight, structuring the board to be effective and add value, instilling a culture of acting lawfully, ethically and responsibly, safeguarding the integrity of corporate reports, making timely and balanced disclosure, respecting the rights of security holders, remunerating fairly and responsibly, and recognizing and managing risk. The report further explores the impact of the full adoption of these principles on the risk assessment process, audit approach, audit evidence, and audit strategy. The conclusion emphasizes the significant relationship between audit and good corporate governance in ensuring transparency in financial reporting, viewing corporate governance as an opportunity for demonstrating the importance of such governance structure, and the association of the quality of internal audit with the effectiveness of corporate governance. The report references key sources like ASIC and ASX guidelines, and academic research to support its findings.

Audit, assurance and
compliances

INTRODUCTION:
 Evaluating the impact of eight corporate governance principles of ASX on the
company.
 Identification and evaluation of the eight corporate governance principles and
recommendation.
 Analyzing the influence of corporate governance principles of ASX on the
process of risk assessment, audit approach, audit evidence and audit strategy
(Asic.gov.au 2019).

Eight ASX corporate governance
principles and recommendations
 Laying down the solid foundations for the oversight and
management of the organization.
 Value addition and effectiveness of the board
 Installing an ethical, lawful and responsible culture
 Making balanced and timely disclosure-

 Respecting the security holders right
 Managing and recognizing the risk
 Fair and responsible remuneration
 Safeguarding the corporate reports integrity

Evaluating the impact of full adoption of each of
corporate governance principles and
recommendation:
 The implementation of Corporate Governance is based on basic principles of
which there are fairness, transparency, accountability and responsibility.
 The company provides accurate and adequate information about the
company’s financial performance by adhering to corporate governance
principles.
 The adoption of such governance principles along with the recommendation
would help the organizations in enhancing their quality of the financial reports

 The disclosures indicating functional skills, like finance, legal and risk were essential to
board, as they were identified by all entities adopting the recommendation (Asic.gov.au
2019).
 Responsibility principle foresees that business can respond to social
expectations to strengthen the relationship between business and society.
 The practice of the corporate governance should be benchmarked against the
rule so that they are able to enjoy the flexibility to adopt the alternative
practices of corporate governance.
 The disclosure of the organization on the components of the diversity is
encouraged due to the adoption of the principles.

 The principle of responsibility helps organization in ensuring that the activities
and the behaviours of the corporates is relevant with legislation, ethics and
social values (Asic.gov.au 2019).
 With this principle the organization is beneficial as it is open to society
because it provides the flow of accurate, unbiased information related to their
actions.

Determining the impact of full adoption of the eight ASX
corporate governance principles on:
 Risk assessment process-
 The risks may be viewed differently based on the success of the enterprise
level.
 The risk assessment chart is based on the principle that a risk has two
dimensions; one is probability and other is impact.
 The impact of risks on organizational goals and objectives are more
meaningful to managing organization.

 Audit approach-
 Governance can be improved through a good auditing process and as a result the
directors will set a high standard auditing with the help of good governance.
 The three lines of defense model helps in governing risk and the assurance activities in
the large scale companies and helps in refining the mandate of internal audit
function(Asx.com.au 2019).
 The audit methodology is designed to focus and have a material impact on the financial
statements.

 Audit evidence-
 Adoption of corporate governance plays a crucial role as it ensures the safeguarding of
the interest of the shareholders along with ensuring transparency of the financial
information (Wilkinson and Coetzee 2015).
 Auditors gather more reliable data and information when the financial report of the
company are prepared by adhering to the ASX principles of corporate governance
 The control of auditor over the information would be effective as the reliability of the
information generated is enhanced.
 The relationship between audit evidence and adoption of corporate governance
principles seems to be positively related.

 Audit strategy-
 The strategic related audit is not always seen as a distinct type of audit.
 Strategy risk audits and Strategy process audits are the two categories of audit
strategies.
 The strategy process audits focuses on the implementation phase, which deals with the
translating the strategy into objectives and performance measures.
 Auditors were perceived as competent and knowledgeable regarding the audit strategy

CONCLUSION:
 Audit holds a significant relationship with the good corporate governance as it
helps in ensuring transparency in the financial reporting.
 corporate governance should not be viewed as a compliance but rather as an
opportunity for demonstrating the importance of such governance structure
 The quality of internal audit of the company is associated with the
effectiveness of the corporate governance,