FNSACC506 - Assessment 2: NAB Internal Control and Governance Report

This report provides a comprehensive analysis of National Australia Bank's (NAB) internal control and governance procedures. It begins with a brief overview of NAB, a major financial institution, and then delves into the application of the ASX Corporate Governance Council's principles and recommendations within the company. The report examines key features of NAB's governance and control systems, including board composition, committee structures, and ethical guidelines. It identifies relevant regulatory requirements pertaining to internal controls, governance, and reporting, highlighting the importance of these procedures within the banking sector. The report concludes by emphasizing the significance of corporate governance and financial reporting in maintaining stakeholder trust and ensuring effective governance within the banking industry. An email is also included, summarizing the report's key findings.

Running Head: IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDURES
IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDURES
Name of the Student
Name of the University
Author Note

1IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDUES
Table of Contents
Assessment 2..............................................................................................................................2
Internal Control and Governance Report...................................................................................2
Brief Overview of NAB.........................................................................................................2
ASX Corporate Governance Council’s Corporate Governance Principles and
Recommendations and application in the company...............................................................2
Key features of NAB’s governance and Control System.......................................................3
Identification of relevant regulatory requirements relevant to Internal controls, Governance
and Reporting.........................................................................................................................4
Importance of the procedures for internal control and governance for the Banking sector...5
Email..........................................................................................................................................5
Reference....................................................................................................................................7

2IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDUES
Assessment 2
Internal Control and Governance Report
1)
Brief Overview of NAB
National Australian Bank is one of largest and most popular financial institutions of
Australia, both in terms of customers as well as market capitalization in the industry of
Banking. Their banking includes business banking and personal banking that offers a variety
of range of the banking products as well as services to the business and retail customers that
ranges from the enterprises of small and medium to the largest institutions of Australia. The
business banking products of the company helps in catering the needs of the customers with
expertise in the Agribusinesses, health, property, community, education and government. It
also comprises of the services of specialized finance, debt markets, treasury and assets
servicing (Nab.com.au, 2019).
ASX Corporate Governance Council’s Corporate Governance Principles and
Recommendations and application in the company
The main role of the council is developing and issuing the principle-based
recommendations on the practices of corporate governance that has to be adopted by the ASX
listed companies. The intentions for the recommendations are to promote the confidence of
the investor and assisting the listed entities for meeting the expectations of the stakeholders
relating to the governance (Christensen et al. 2015). Under the listing rule of 4.10.3, the ASX
entities that are listed are required to set the benchmark for their practices of corporate
governance against the recommendations of the council and, disclosing the fact as well as the
reason why, to where they does not confirm. This rule does not forces for doing so but it
encourages the listed entities for adopting the recommended practices by the council. Hence,

3IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDUES
flexibility is provided to the entity for adopting the alternative practices of corporate
governance, in case if the board considers that to be suitable in the given situation is subject
to the board requirement for explaining the reasons for adopting the alternative practices
(Christensen et al. 2015).
The corporate governance framework of NAB group plays the vital role for
supporting the operations of business by providing the clarity in the guidelines of the way of
exercise in the group through the strategic and operational planning, compliance and risk
management, culture and succession planning, external reporting and financial management
(Nab.com.au, 2019). The company issued its corporate governance statement in the year 2018
in compliance with the ASX corporate governance council’s corporate governance principles
and recommendations. The company’s commitment to the corporate governance is shown in
its document if constitution, board charter, independence of directors, board committees,
code of conduct, continuous disclosures, stakeholders communications, diversity and
inclusion (Nab.com.au, 2019). Moreover, it is also shown in the document of corporate
responsibility, risk management, whistle blowing, Australian government deposit guarantee,
model litigant, managing financial crime, managing conflict of interest, remuneration
management and political domain (Nab.com.au, 2019).
Key features of NAB’s governance and Control System
 The board of company reviews their composition for ensuring that it has appropriate
mix of the experience, skills and diversity all the time for continuing the
effectiveness.
 The directors of NAB do the independent as well as unfettered judgement to the board
deliberations.

4IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDUES
 The board of the company has established the four standing committees for assisting
in carrying responsibilities, which focusses on the operations and governance specific
areas.
 In order to determine the completeness and accuracy of NAB, the company relies on
the management’s information. External auditor provides the assurance of
independent and objective.
 The company maintains their code of conduct in Australia and overseas, that requires
observance of the strict ethical guidelines by their people.
 The company strives for maintaining its corporate governance for becoming most
reputed bank. It assesses as well as balances their risk and opportunities for long term
value to their stakeholders.
 The company is also committed towards culture of inclusion and diversified
workforce that is representative of their communities as well as customers
(Nab.com.au, 2019).
Identification of relevant regulatory requirements relevant to Internal controls,
Governance and Reporting
The company maintains continues to provide and maintain relevancy of governance,
internal control as well as reporting by the relevant regulatory requirements. The company
ensures for providing with the financial services and maintaining their compliance with the
relevant regulations (Cohen and Simnett 2014). The company also reflects its commitment
towards relevant policies and procedures as well as risk assessment in their human rights.
Moreover, the company also maintains its code of conduct by complying with the laws and
regulations that is applicable to them (Hopkin 2018).

5IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDUES
Figure 1: Corporate Governance framework
Importance of the procedures for internal control and governance for the Banking
sector
In the recent years, corporate governance and financial reporting has gained
reasonable importance. It has been finding that, corporate scandals have been increased due
to absence of internal control and governance that has affected the trust of stakeholders.
Hence, the implementation of ethics, financial reporting and governance will enable the
banking industryfor gaining the trust of stakeholders, ensuring that the rule enables
appropriateness for ensuring the effective governance (Mollah and Zaman 2015).
2)
Email
Dear Sir,

6IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDUES
This is to inform you that, I am attaching internal control and governance report, which
includes details of NAB, summary of ASX corporate governance council’s corporate
governance principles and recommendations and application of it by the company. The report
also includes key features of NAB governance and control system, identification of
regulatory requirements relevant to the internal controls, governance and reporting and the
importance of the procedures in the banking sector.
Kind Regards

7IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDUES
Reference
Christensen, J., Kent, P., Routledge, J. and Stewart, J., 2015. Do corporate governance
recommendations improve the performance and accountability of small listed
companies?. Accounting & Finance, 55(1), pp.133-164.
Cohen, J.R. and Simnett, R., 2014. CSR and assurance services: A research agenda. Auditing:
A Journal of Practice & Theory, 34(1), pp.59-74.
Hopkin, P., 2018. Fundamentals of risk management: understanding, evaluating and
implementing effective risk management. Kogan Page Publishers.
Mollah, S. and Zaman, M., 2015. Shari’ah supervision, corporate governance and
performance: Conventional vs. Islamic banks. Journal of Banking & Finance, 58, pp.418-
435.
Nab.com.au. (2019). Corporate Governance. [online] Available at:
https://www.nab.com.au/about-us/corporate-governance [Accessed 24 Apr. 2019].
Nab.com.au. (2019). Our business at a glance. [online] Available at:
https://www.nab.com.au/about-us/our-business-at-a-glance [Accessed 24 Apr. 2019].