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With reference to the "ASX Corporate Governance Council's Corporate Governance Principles and Recommendations":

- Identify and explain each of the eight ASX Corporate Governance principles and recommendations

- Briefly explain what the likely effect of full adoption of each corporate governance principle and recommendation will have for the company

- Explain how full adoption of the eight ASX Corporate Governance principles is likely to influence:

- Risk assessment process

- Audit approach

- Audit strategy

- Audit evidence

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In the current global business scenario, it is crucial for companies to maintain transparency within the institution. It includes rules relating to the organization involving external and internal partners of the organization. This report mainly focuses on corporate governance policies that are set up by the Australian Securities Exchange (ASX). Out of the 200 reputed companies that are listed under ASX, Suncorp was selected for the current study. The chief objective of this study is to be suggesting methods in which Suncorp can be increasing their performance in the market and can also be increasing the level of marketing capital of the company.

Company background

Suncorp Group Limited is an Australian insurance, banking and finance corporation, which is based in Brisbane, Queensland, Australia. It is a medium-sized bank in Australia (through consolidated financing and deposits) and its largest general insurance team was formed on the 5th of December, the consolidation of Suncorp was formed through both Queensland Industrial Development Corporation (QIDC) and Metway Bank (Smith, Henderson and Ginger, 2015). The company, Suncorp Group Limited is one of the leading financial service providers in both New Zealand and Australia, which has enabled over nine million consumers to better protection and enhancement of their financial welfare. With a last-ditch of 12, the company has been able to grown into a top 20 ASX-listed company that has more than 13,000 people and $ 96 billion in assets under its belt. New innovations and balancing of risks both are a crucial part that needs to focus on the managing body of Suncorp Group. The company also offers asset management, banking and insurance services and products through Suncorp's recognized brands that includes its partners such as AAMI, Apia, GIO, Vero and Shannon (Suncorp, 2019).

Eight principles of Corporate Governance

1st principle:

The first principle is about building a strong foundation of an organization through the proper definition and understanding of the role played by the organization (Hay, Stewart and Botica Redmayne, 2017). Very recently, the role of Suncorp top management has been reduced and a new organizational structure has been formed as shown in Figure 2 of the Appendix. It is very important for an organization to have a defined and precise job role that does not cause any confusion. Reviewing the organizational process is an integral part of the policy that has been followed properly, as CEO Michael Cameron uses his foresight to cut staffing requirements and applies new technology to all levels of the organization that will require less manpower. This is where the directors of the company and the auditing committee will play a major role in taking responsibility for the success of the organization.

2nd principle:

The shake-up of the management position is the result of trying to simplify operational procedures and apply new advanced technology. The second principle is to have a board of persons who will add value to this organization. The board of members must have the skills and commitment required in their activities that ensure organizational success. Thus, the organization must identify and retain people who have the skills and knowledge they must have in their field. Performance of action energy must be effective (Du Plessis, Hargovan and Harris, 2018).

3rd principle:

The third principle is about the instigation of an organizational culture where employees are responsible for their role within the organization and for maintaining ethical standards and integrity within the organization. The management of the company must ensure that effective corporate law is followed. The decisions and actions taken by the governing body must be consistent with the ethical and professional principles. Leaders must have the skills to determine what is right and what is wrong, on the basis of which employees will be governed and empowered (Tricker and Tricker, 2015). Good ethics and behavior will improve the organization's brand image as consumers and shareholders will become increasingly positive about the company.

4th principle:

The fourth principle is about protecting honesty related to corporate reporting. The corporate report is an annual report that is geared towards providing information to company partners. Regardless of the organization's performance, management has ensured that information about the organization is reached by internal and external partners. Transparency has been maintained in this regard. The reliability of corporate reporting, however, depends on the quality of the IT system embedded within the organization (Zabri, Ahmad and Wah, 2016). The financial information provided must be relevant and reliable, and all weak links related to financial reporting must be eliminated, to ensure that stakeholders are not harmed.

5th principle:

The disclosure of information must be made in a timely manner. This is important because stakeholders need to be periodically informed of the current state of the organization. The company Suncorp ensures that stakeholders receive annual reports every year within two months of the end of the financial year. The company Suncorp will be addressing the various segments of their partners and will also be providing them with specific information that will interest them. The company also ensures that partners are aware of the risks the company is currently facing and the specific roles of the top managers have been specified.

6th principle:

The organization must protect the rights of the security holders. Holders of securities are individuals who form part of a company's external partner's form, invest in shares and debentures, and therefore have the right to obtain all necessary information about the company. Since they invest a large portion of the company's capital, it should give them some power as a right or an incentive to trust the company (Aras and Crowther, 2016). They exercise their authority through the process of voting for top management or strategic decisions of the organization. Agency theory is an effective way to understand aspects of relationships and incentives between management and employees.

7th principle:

Risk identification is a very important aspect of good management. Management must be able to recognize the risks associated with the organization and adopt appropriate strategies that can be applied to achieve effective risk management. The process of risk identification should be conducted on a regular basis. This is especially applicable for companies like Suncorp because the market for financial services is related to the threat of competition and global economic instability. The company deals with the risk of not meeting a technical failure, and so it is very important to identify the technical glitches before a complete failure.
Digital risks also involve cybercrimes and online account frauds that management must avoid to influence the company. Risk mitigation should be based on proactive, proactive and responsive strategies. Balancing risk and innovation is an important factor to focus on by the management of Suncorp (Shah, et al., 2016).

8th principle:

The last principle focuses on the remuneration of employees. Employees should be paid remuneration so that they can be kept efficient in their performance. Furthermore, if employees receive high wages, highly skilled and skilled employees will be attracted to be part of the organization and the cost of leaving the job will be higher if no other company has paid such high wages. It is also imperative to provide adequate salaries to senior employees of the organization. Bonus management is often related to fraudulent activities that the company is trying to achieve policy standards that can be prevented (Appuhami and Bhuyan, 2015).


Audit committee

It is the responsibility of the Audit Committee is to provide partners with all necessary information regarding the financial performance of the organization. It is the audit committee that provides oversight of the financial reporting process. Previously, the auditor's role was to monitor the financial statements prepared by an organization and to present a detailed review of the financial statements of the company. The ASX had listed a number of companies that were advised to conduct audit committees (Sri and Arief, 2018). However, over a period of time, the role of the auditor becomes final as a company is in the hands of a sustainable security audit committee. The specific role of an auditor has become unclear with the changing expectations of the business world. The responsibility of the auditor has considerably increased in comparison to earlier times and the role has been widened. To improve the quality of monitoring, more focus is needed on risk management.

In order to maximize the effectiveness of the audit process, managers of a company must take responsibility for making T-4 financial statements. The directors of Suncorp must be sure to be raising that right questions are being asked at the right point of time. The degree of doubt must be maintained, however, there is also a need for continued review of the committee process. The quality of the committee's performance should be constantly evaluated.

Audit Quality

The quality of the audit depends on many factors, such as the context of the audit and the level of interaction between external and internal auditors. Interaction between the organization and the community is also an important factor in determining the quality of monitoring. The inputs and outputs associated with the activities of a company are also determinants of the quality of the output. Individual members of the Audit Committee must completely be satisfied with their performance level that they are providing. The quality of the monitoring can only be assessed if management is facing a problem. The Transparency Report must be accepted. The report was submitted by the Audit Committee to the Australian Securities and Investment Commission (ASIC) (Donaldson, 2015). These reports are of utmost importance to the reputation of the company, as they include the organizational culture of identities and details embedded within the company. ASIC is responsible for the proper promotion of quality of monitoring.

Audit Strategy

A strategy of auditing takes into account various factors such as aspects of the monitoring process, duration and scope of the audit. The strategy of the audit is usually a shorter document than the monitoring plan or the audit plan. The strategy involves the communication aspect between the auditor and the related stakeholders. Effective communication ensures even auditing and smooth monitoring (Flanders, 2018). The nature of face-to-face communication, such as voice calls, emails or surveys, is also included in the audit strategy the Objectives obtained through the audit procedure are clearly identified. Elements that enhance team engagement efforts are recognized in addition to the desired knowledge gained through engagement. In this company, Suncorp, the emails are the most common method used for communication between the internal stakeholders.

Audit Evidence

The evidence to be monitored is the data collected to review financial transactions related to a company. There are four types of monitoring evidence related to the company of Suncorp. These are physical examinations, confirmations, documentation and observations. Physical evidence involves tangible assets that can be easily tested. Confirmations are third-party responses that are received in the form of an oral or written response. Documents related to the organization may be left to external stakeholders or internal stakeholders, and these documents are supported by the Audit Committee (Yoon, Hoogduin and Zhang, 2015).

Audit Approach

The auditor method is the method by which an auditor adopts a set of factors, including the power of the financial reporting system and the internal control system. Focusing on client risk and balance sheets is the determinant of the approach taken. There are 6 types of key audit methods such as: survey, interview, document review, observation, case study and bench identification. Document review is an early stage of monitoring, where the evaluation of structural procedures involved in the operation of activities and their timelines are considered.

Through interviews and surveys, auditors can gain a clear idea of the strengths and weaknesses of existing governance standards from the organization's stakeholders. A unique perspective is highlighted on the core issues of the organization. Benchmarking is an approach that involves the use of annual report data to generate budgets or develop administrative strategies. It is only by adopting the benchmarking approach that the company Suncorp can continuously improve and therefore be sustainable in the business world. Case studies involve specialized or selected issues that allow the auditor to gain insight into the effectiveness of existing governance standards.
When adopting the audit approach, various risks are considered as captured as an audit risk model. Audit risk includes factors such as inherent risk (IR), risk of misstatement (RMM), detection risk (DR) and control risk (CR). Inherent Risk and Control Risk are subdivisions of Risk of Misstatement (Swart, 2018). The Inherent Risk is involved in account balance or transaction confusion. On the other hand, Control Risk is a failure of internal controls to prevent misrepresentation of materials. The audit committee's failure to identify the errors in the documents is related to the risk of detection.

If incorrect information is unknown, the monitoring process fails in accordance to the audit risk model,



AR = (IR * CR) * DR

Risk management

Internal auditors

The company's internal auditors must include corporate governance policies in their remit. Internal auditors must ensure that the design chosen for corporate governance fits the purpose. Administration standards must be widely accepted and understood. The incentive structure provided to employees and management must not be subject to any kind of conflict. The chief function of internal auditors is also to be ensuring that the company is working with the integrity that is required and is protected from all potential risks. There are several areas where administration monitoring is applicable, as shown in figure 3 of the Appendix. There are many internal conflicts that committee members have to deal with conflicts of interest between members. For reasons like this, companies such as Suncorp must be considering the benefits of external experts who will be responsible for resolving conflict issues. Internal auditors must sometimes consider the aspect of external competence. Internal auditors must ensure that the behavior of the top and bottom managers is linked to the administration's policies that the organization should follow.

Importance of risk management and Risk mitigation

Effective risk management strategies allow a company to identify the strengths, weaknesses, opportunities and threats of your project allow by planning for unexpected events, you can be prepared to respond if raised. For ensuring the success of projects of the company, it is important to be determining how the organization will be managing potential risks so you can identify, mitigate, or avoid problems when you need to. Successful project managers recognize that risk management is important, because achieving a project's goals depends on planning, preparation, results and evaluation to contribute to the achievement of strategic goals.

The main goal of risk management is to ensure that the company has been able to identify and mitigate risks before they affect the company in negative ways (Wiengarten, et al., 2016). The decision-makers of Suncorp will be able to come up with precise and confident strategies for managing risks well. Internal monitoring or auditing will help to ensure that management is able to treat the risks with adequate and effective control. The need for risk identification and addressing is very important for the organization to reduce the damage it can cause.

An agency can be carrying risk mitigation strategies that are different in ways which the management has to deal with risk. There are several stages to applying risk mitigation strategies. The first type is risk avoidance. This strategy removes the source of the risk. This national risk reduction is done for risky which is very harmful. The introduction of a project or the conclusion of a contract will be rejected in these national strategies. Risk acceptance is when the impact of risk is minimal and the firm does not take any action to reduce the impact of risk. Risk transfer relates to the transfer of risk effects to a different entity. Risk reduction is when considering specific measures to reduce risk so that the impact can be born. Suncorp will be adopting higher-end digital technology to ensure that security breaches do not interrupt the risk.

Risk Assessment

In figure 4 of the Appendix, the risk matrix is displayed. The matrix is connected to two axes. The horizontal axis represents the probability or probability of the risks, and the vertical axis shows the magnitude of the risk effect or the risk generated. An integral part of effective monitoring is to list all identified risks associated with an organization's activities. The two determinants must be considered with the weight. For medium and high-level risk, the mitigation process should be listed respectively and the level of risk should be assessed after the mitigation strategies are implemented (Aven, 2016). For risks where levels are still high, risk avoidance measures will be implemented. Low level risk will be taken and medium level risk will either be transferred or reduced. The risks can be transferred through an insurance policy. These are the considerations that should be made by the company Suncorp.

Conclusion and Recommendation

The survey highlighted the importance of monitoring to maintain the quality of quality administration. The report was adopted to improve the performance of financial service providing company, Suncorp. The company would be greatly benefited if it appointed a neutral committee that was responsible for identifying the flaws associated with existing corporate governance. Through impactful auditing, the company will be able to avoid any loss that could damage the company.

It is very important for the Audit Committee to ensure that the company is following the policy of effective remuneration. This will help to avoid the risk of losing skilled workers. Due to a loss of workforce, some employees may suffer loss of loyalty to these organizations. Employee job satisfaction must be considered as one of the areas of greatest importance.

Employees are important stakeholders and therefore the need to retain employees should be made clear in advance, so that the administration is involved and employees can look for other work forms in advance. All risks associated with the adoption of this disruptive technology must be considered and external auditors should be consulted at regular intervals. It is important to have surveys and interviews of employees and customers at regular intervals as an integral part of the monitoring process, so as to get a true picture of the organization's progress.

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