Student no 11580510

Bhandari Ashish

ACC568

Question 1:
Scenario for AAA model:
CCCL (private oncology clinic for treatment of cancer) use two relatively old linear accelerators.
Linear accelerators used have adverse radiation impact on patients. The CEO of CCCL, had
approached the Belinda Battersby(Audit firm)without charging fee as gesture of goodwill to
provide good opinion on linear accelerators and have requested to show that the accelerators used
are fit to use.
Facts:
The facts in this case are the adverse radiation impact of linear accelerator on patient. The auditor is
requested to provide good opinion on the linear accelerator.
Ethical issues:
In this case ethical issues are whether or not an auditor should accept the request. If auditor accepts
the request he/she would be acting illegally. He would be negligent to his professional duties.
Principles rules and values:
Shareholders and other public users expect auditor to have responsible and honest and faultless
reports to make sure that the company is not giving the false and unfair view of its financial
situation at respective year. The main duty of auditor is to investigate the financial accounts of
company. Anything that avoids or interfere the duty of auditor is the failure of auditors duty to
shareholders and other users of those accounts.

Alternatives:
First alternative is to accept the request of the CEO and provide the report that shows the linear
accelerators are fit for use. Second alternative is to present the flawless report that clearly explains
how adversely the radiation impact in patients.
Comparing values and alternatives

Student no 11580510

Bhandari Ashish

ACC568

To accept the request gives company the loyal client but it will avoid the audit to give unbiased
report. To refusing the request is maintaining the impeccable integrity of the duty.

Access the consequences:

The MSHG is large client so to refuse the request might cause the firm to lose one of the biggest
clients but it will lead to the true view of the company to the share holders and other users. To
accept the request would be interfering to the auditor from his duty to provide true and fair view but
it will help company to take advantage of the linear accelerator that it is providing to the company.
Decision:
Auditors have their duties. These duties of auditor would maintain the sustainability of the market.
The true and fair work of auditor might impact the company but performing the duty with biasness
is not legal. If auditors do not act unbiased the act would be illegal. Thus on the behalf of
responsibility of the audit to society Belinda Battersby should provide the report that shows the
adverse impact of radiation.

Student no 11580510

Bhandari Ashish

Question 2:
(report)

ACC568

Student no 11580510

Bhandari Ashish

ACC568

Independent Directors for Corporate

Governance

Submited by
Ashish Bhandari

Submitted to
Lu Jiao

Student no:11580510

Subject: ACC568
4

Student no 11580510

Bhandari Ashish

ACC568

Independent Directors for Corporate Governance

Summary
It is widely accepted that independence is critical to the effective operation of any board.
Independent directors bring many benefits to a board, including the ability to exercise objective
judgement, avoid conflicts of interest and assist in managing competing demands, said John
Brogden, the AICDs Managing Director & Chief Executive Officer. (Kahler, 2015)
Independent directors have different value in corporate world. There can be argument about
directors which have untenable conflict of interest where they are the major owners and
beneficiaries of the business that they are direct and govern. Independent directors interests are
artificial compared to executive peoples who are more aware of the company performance and have
more experience. Their thoughts are unaffected by self interest as their interest in company
performance is disconnected. But independent director are selected to provide specialist skills and
add diversity to the board to change the culture of a unitary board. They also provide an
independent appraisal; separation of ownership and control. Independent directors have corporate
experience and leadership qualities to provide expertise, explicitly to support the CEO. Thus to
reduce the audit risk good governance is necessary which is more effective when there are
independent directors.

Student no 11580510

Bhandari Ashish

ACC568

Table of Contents
Summary

1.1 Introduction

1.2 Se Independent directors:

1.3 Corporate Governance

1.4

Corporate governance and independent directors:

1.4.1

Change in Australian corporate governance and independent director

Conclusions and recommendation

10

References

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Student no 11580510

Bhandari Ashish

ACC568

1.1 Introduction:
Corporate governance is broad term. It traces the relationships, policies, rules, system and
processes exercised within organization. The governance is the skeleton of a company are
shaped by diversified factors, both external and internal. Internal consist of constitution,
organization policies etc and external consist of laws, regulations, community expectations
etc. The main objective of best corporate governance is to meet their individual
circumstances and needs- helping to accelerate the performance of the company and also in
same time aiding conformance with requirements like organizations constitution, policies,
controls and procedures as well as with applicable external regulation and laws.
Thus, the good corporate governance can be insured if there are independent directors. The
effectiveness of the board and board performance reflects the governance. The way of
application of governance is the determinant of the governance. The most important factor of
the good governance is independency of directors.

According to National Australian Bank Directors are satisfied to be independent if directors

are independent of management and free of any business or other relationship that could
materially interfere with or could reasonably be perceived to materially interfere with the
exercise of his/her unfettered and independent judgement. (National Australia Bank, 2015)
The member that is hired from the outside of the company as the board of directors is
independent director. He/ she is independent director because he/she have not worked with
company for a period of time he/she is not the present manager and is not generally tied to the
companys existing way of doing business.

Student no 11580510

Bhandari Ashish

ACC568

1.2 Independent directors:

According to National Australian Bank Directors are satisfied to be independent if directors
are independent of management and free of any business or other relationship that could
materially interfere with or could reasonably be perceived to materially interfere with the
exercise of his/her unfettered and independent judgement. (National Australia Bank, 2015)
Independent director are someone who is outsider have no involvement in organizational
activities and is hired as directors. So, independent directors are sometimes know as outside
directors. The outside directors are not the part of organizations management team. These are
sometimes referred as independent or non-executive directors.
According to ASX supported by ASIC, An independent director is one who is not a
substantial shareholder owning 5 per cent or more, has not been employed in an executive
capacity within the last three years, and has not been a principal of a material professional
adviser or a material consultant to the company within the last three years. These
characteristics collectively help to define ignorance of company affairs and lack of
motivation -- negligible "skin in the game".

1.3 Corporate Governance:

Who controls the organization? It is the question whose answer is corporate governance.
Corporate governance is the external as well as internal factors like constitution, rules,
relationship, laws etc. It is the broad term. It traces the relationships, policies, rules, system
and processes exercised within organization. The governance is the skeleton of a company
are shaped by diversified factors, both external and internal. Internal consist of constitution,
organization policies etc and external consist of laws, regulations, community expectations
etc.
The main objective of best corporate governance is to meet their individual circumstances
and needs- helping to accelerate the performance of the company. Thus, the good corporate
governance can be insured if there are independent directors. The effectiveness of the board
and board performance reflects the governance. The way of application of governance is the
determinant of the governance. The most important factor of the good governance is
independency of directors.

1.4 Corporate governance and independent directors:

Independent director in an organization will ensure the global standard and help to maintain
the transparency of the company. Before the 1970s, boards of directors were presumed to be
management in committee, helped by people who could make a specific contribution for
example, by having useful contacts or an understanding of the industry, says Professor
Robert Austin, head of corporate HQ advisory at Minter Ellison (Twitter @minterellison)
Looking back to the recent corporate collapse in the globe has made change in thoughts about
regulation and policy. That change made the requirement of independent directors.

Student no 11580510

Bhandari Ashish

ACC568

1.4.1 Change in Australian corporate governance and independent director:

With global changes in 2003 Australian securities exchange also recommended to companies
about the major directors of the company should be independent directors. And the fact that
fails to maintain the independency of directors must disclose the fact in Annual Report.
Good corporate governance is governed by independent directors. Independent diretors
thoughts are unaffected by self interest as their interest in company performance is
disconnected. But independent director are selected to provide specialist skills and add
diversity to the board to change the culture of a unitary board. They also provide an
independent appraisal; separation of ownership and control. Independent directors have
corporate experience and leadership qualities to provide expertise, explicitly to support the
CEO. Thus to reduce the audit risk good governance is necessary which is more effective
when there are independent directors.

Student no 11580510

Bhandari Ashish

ACC568

Conclusion and Recommendation:

Independent directors are the basis of the independent decision because the independent
directors are not related to business. Their performance is not biased. They have only interest
that company gives them as salary and benefits. This self interest is independent of the
business so the decision, policies , rules and relationships made are likely to be more
governing that will ensure the good corporate governance.

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Student no 11580510

Bhandari Ashish

ACC568

Referencing:

Kahler, A. (2015, June 26). Australian Institute of Company Directors.

Retrieved August 18, 2016, from Company Directors:
http://www.companydirectors.com.au/general/header/media/mediareleases/2015/independent-directors-are-essential-for-good-governance-ofsuper-funds

National Australia Bank. (2015, July 31). National Australia Bank. Retrieved
August 17, 2016, from National Australia Bank:
https://www.nab.com.au/content/dam/nabrwd/legacy/about-us/corporategovernance/Director-Independence-Standards.pdf

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