HI6026 – Audit, Assurance and Compliance
Assessment item 1 — Individual Assignment
Due date: 11.00pm Friday Week 6
Weighting: 20%
Research Assessment:
Download a company annual report which is listed in ASX and must be present in
ASX S&P 300 index, along with this annual report, student should download
corporate statement of same company.
Structure of your research report:
1. Executive Summary of the assessment
2. Focus in each headline the implication of ASX Corporate Governance Principles
from your selected company (reference link B). Conceptualize and explain how to
your selected company implements ASX CGC principles (read carefully from
reference link A.3 and A.4 to follow)
3. Risk assessment (When performing an audit, you use risk assessment procedures
to assess the risk that material misstatement exists. This step is very important
because the whole point of a financial statement audit is finding out if the financial
statements are materially correct. How exactly do you assess audit risk?) There are
various steps of risk assessment procedures, but your report will focus mainly:
Recognizing the nature of the company, what’s the company’s market
overview? Who (if anyone) regulates the client? What’s the company’s business
strategy? Computation of income statement and balance sheet ratio, and
Development of common-size financial statements and focus on relevant audit risk
and potential steps to reduce risk (reference link C).
Additional Resources Reference link:
B. ASX CGS Principles:
The Principles and Recommendations are structured around, and seek to promote, 8
central principles:
1. Lay solid foundations for management and oversight: Your selected company
should establish and disclose the respective roles and responsibilities of its board
and management and how their performance is monitored and evaluated.
2. Structure the board to add value: Your selected company should have a board of
an appropriate size, composition, skills and commitment to enable it to discharge its
duties effectively.
3. Act ethically and responsibly: Your selected company should act ethically and
4. Safeguard integrity in corporate reporting: Your selected company should have
formal and rigorous processes that independently verify and safeguard the integrity
of its corporate reporting.
5. Make timely and balanced disclosure: Your selected company should make timely
and balanced disclosure of all matters concerning it that a reasonable person would
expect to have a material effect on the price or value of its securities.
6. Respect the rights of security holders: Your selected company should respect the
rights of its security holders by providing them with appropriate information and
facilities to allow them to exercise those rights effectively.
7. Recognise and manage risk: Your selected company should establish a sound risk
management framework and periodically review the effectiveness of that
8. Remunerate fairly and responsibly: Your selected company should pay director
remuneration sufficient to attract and retain high quality directors and design its
executive remuneration to attract, retain and motivate high quality senior executives
and to align their interests with the creation of value for security holders
C. Risk Assessment
2. Assessing Risk with Analytical Procedures: Do Systems-Thinking Tools Help
Auditors Focus on Diagnostic Patterns?O’Donnell, Ed; Perkins, Jon D. Auditing;
Sarasota Vol. 30, Issue. 4, (Nov 2011): 273-283.
Marks Allocation:
1. Executive Summary – 2 marks
2. Body of the report (ASX CGS Principles -8 marks and Risk Assessment Procedures8
3. Reference list, in-text citation – 2 marks

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