In: Accounting
• read audit standard ASA315 focusing on audit responsibility with respect to client governance, • read the web page on the ASIC report on the Commonwealth bank which details the governance issues raised by ASIC (http://www.apra.gov.au/MediaReleases/Pages/18_17.aspx), and
• prepare a report that: o summarises and justifies the auditor’s responsibility to review the governance of an audit client, and o includes a table for use in the audit which explains the impact of each of the ASIC identified Commonwealth Bank governance issues on audit risk. The table should further explain why each of the ASIC recommendations would reduce audit risk. The template below should be used.
Issue | Impact on raising audit risk | Recommendation | Reduction in audit risk because of the recommendation |
Issue |
Impact on raising audit risk |
Recommendation |
Reduction in audit risk because of the recommendation |
inadequate oversight and challenge by the Board and its committees of emerging non-financial risks |
This shall raise the governance issues of having wrong culture and promote unethical ways of doing business which can be a basis for issuing qualified report |
|
This shall help in improving the culture of the organisation thus helping in reducing the audit risk. |
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This shall prompt auditors to fix responsibilities of the actions on their own perception, citing the reason in the audit report and giving it a qualified opinion |
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This shall pose accountability, thus making person responsible for his actions, leading to improvement and reducing audit risk |