Auditing Theory and Practice Report: Corporate Governance at BHP

This report provides an analysis of auditing theory and practice, using BHP as a case study. It explores the significance of ethics in auditing and the role of the audit committee in corporate governance. The report details BHP's commitment to high governance standards, its board of directors, and the functions of its audit committee. It examines the responsibilities of the audit committee in ensuring the integrity of financial statements, overseeing accounting practices, and adhering to ethical codes. The conclusion highlights the importance of corporate governance in achieving long-term sustainability and the audit committee's role in monitoring decisions to meet corporate objectives, emphasizing the adherence to ethical standards.

Running Head: AUDITING THEORY AND PRACTICE
AUDITING THEORY AND PRACTICE
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction................................................................................................................................2
Background of Company.......................................................................................................2
Discussion..................................................................................................................................2
Conclusion..................................................................................................................................4
Reference....................................................................................................................................5

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Introduction
An ethical disagreement in auditing arises because of the absence of agreement
regarding central purpose of audit. Ethics in context of the auditing is important because it
helps in determining what is ethical and legal in the auditing. The auditors are responsible for
carrying out the standard procedures diligently, carefully as well as punctually, according
with the instructions as well as appropriate procedures and standards. Hence, role of the audit
committee is vital in assisting the board of directors of company for fulfilling the corporate
governance as well as overseeing the responsibilities of organizational financial reporting,
risk management, internal control system as well as audit functions (Bansal and Sharma
2016). Therefore, under this assignment, discussion will be on corporate governance as well
as details of audit committee.
Background of Company
BHP is the trading organization of the BHP Group plc and BHP Group Limited,
which is the Anglo-Australian multinational petroleum, metals as well as mining dual-listed
public company. It is having it’s headquarter in Australia. BHP Billiton is one of the second
largest mining company, by revenue in the world. The formation of the company was in the
year 2001 by the merger of Australian company, Broken Hill Proprietary Company Limited
(BHP) as well as Anglo-Dutch Billiton Plc. forming the company, which is dual listed
(Bhp.com. 2019).
Discussion
Corporate Governance
BHP Billiton Limited is committed towards high level of the governance and it strives
towards fostering the culture of the values as well as rewards exemplary ethical standards,
corporate and personal integrity as well as respect for the others. The company comply with

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the governance standards and is summarized it in the corporate governance statements,
financial statements, directors report as well as remuneration report (Tricker and Tricker
2015).
The Board of Directors of BHP Billiton are Ken MacKenzie, Andrew Mackenzie,
Terry Bowen, Malcolm Broomhead, Anita Frew, Carolyn Hewson, Lindsay Maxsted, John
Mogford, Wayne Murdy, Shriti Vadera and Margaret Taylor. The Board of the company has
established the committees for exercising their authority that includes monitoring of the
performance of company for gaining the assurances that the progress has been made towards
the purpose of corporate within limits that are imposed by Board (Jizi et al. 2014). During the
year of reporting, the Boards of the company meets 11 times, under which five meetings are
held in the Australia, four meetings are held in United Kingdom, one in Singapore and one in
New York. Generally, the board meetings runs over two days that includes committee
meetings, directors’ trainings and sessions of development (Miko and Kamardin 2015).
The details of the Audit Committee of the company are as follows:
 Lindsay Maxsted: He is Independent Non-executive Director and his academic
background includes DipBus (Gordon), FCA, FAICD.
 Terry Bowen: He is Independent Non-executive Director and his academic
background includes BAcct, FCPA, MAICD.
 Malcolm Broomhead: He is Independent Non-executive Director and his academic
background includes MBA, BE, FAICD.
 Anita Frew: She is Independent Non-executive Director and his academic
background includes BA(Hons), MRes, Hon.D.Sc.
 Wayne Murdy: He is Independent Non-executive Director and his academic
background includes BSc (Business Administration), CPA.

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The audit committee of the company is responsible for the advising the board
regarding the fact that whether the annual report of the company meets the balanced, fair as
well as understandable requirements or not. The audit committee of this company helps in
assisting the board for assuring the financial statements integrity (García-Sánchez,
Rodríguez-Domínguez and Frías-Aceituno 2015). They evaluates as well as makes the
recommendations to the board about the appropriateness of the accounting practices and
policies, stock exchanges as well as requirements of law, compliance with the accounting
standards, results of the external audit and stock exchanges. Moreover, they also do reviews
of the financial statements both half-yearly and annually and accordingly make
recommendations on the specific actions or the decisions. Hence, the audit committee adheres
to the ethical codes while performing their duties (Bansal and Sharma 2016).
Conclusion
Hence , it can be concluded from the analysis that corporate governance code of the
company helps in emphasizing the importance for demonstrating through the reporting that
how the company’s governance contributes towards the long-term sustainability success as
well as achievement of the wider objectives. Moreover, the audit committee of the company
helps in assisting the board in the monitoring of the decisions as well as actions of the Group
for achieving the corporate objectives. Lastly, it has been analyzed that the audit committee
of the company follows ethical standards in discharging their responsibilities.

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Reference
Bansal, N. and Sharma, A.K., 2016. Audit committee, corporate governance and firm
performance: Empirical evidence from India. International Journal of Economics and
Finance, 8(3), p.103.
Bhp.com. (2019). [online] Available at:
https://www.bhp.com/-/media/documents/investors/annual-reports/2018/
bhpannualreport2018.pdf [Accessed 2 Aug. 2019].
García-Sánchez, I.M., Rodríguez-Domínguez, L. and Frías-Aceituno, J.V., 2015. Board of
directors and ethics codes in different corporate governance systems. Journal of Business
Ethics, 131(3), pp.681-698.
Jizi, M.I., Salama, A., Dixon, R. and Stratling, R., 2014. Corporate governance and corporate
social responsibility disclosure: Evidence from the US banking sector. Journal of business
ethics, 125(4), pp.601-615.
Miko, N.U. and Kamardin, H., 2015. Impact of audit committee and audit quality on
preventing earnings management in the pre-and post-Nigerian corporate governance code
2011. Procedia-Social and Behavioral Sciences, 172, pp.651-657.
Tricker, R.B. and Tricker, R.I., 2015. Corporate governance: Principles, policies, and
practices. Oxford University Press, USA.