Commonwealth Bank, Australia
Chapter one: Introduction
Introduction to the topic of the research
While ethics is considered an integral part of auditing, it is a fact that internal auditors have always been more aware of the code of ethics in this field. Hence its importance and relevance has already been spoken of in the Code of Ethics, which is presented by many institutions and organizations who teach auditing to the most brilliant minds in the world. This focus on ethics in auditing from the very early phases is a sign of just how essential this factor is, when it comes to not only following certain principles, but also for the betterment of the economy within a country’s industry. Hence through this research, light will be shed on why ethics is absolutely vital for banking organizations, especially the ones with a considerable consumer base.
Overview of client organization
As a result, the Australian Transaction Reports and Analysis Centre had filed a suit with the federal court against the Commonwealth Bank. The suit accused Commonwealth Bank of not complying with the Anti-Money Laundering and Counter-Terrorism Financing Act for more than 53,700 times in total. Each of the times, the Bank incurred a maximum penalty of 18 million Australian dollars (US$14.3 million).
What real problem does the research seek to resolve and why is it important to research this topic?
At present, the Commonwealth Bank of Australia faces an intensive inquiry by the Australian Prudential Regulation Authority on charges of money laundering. The first series of arrests in connection with the alleged fraud had taken place in 2015 when two employees were found to be carrying stacks of money receipts of Commonwealth Bank. It was a major incident related to the Australian financial section, which made the government aware of the loopholes present in the system.
In such a scenario, the trust of Australian communities in banking systems has been badly damaged, particularly disturbing the loss of reputation of the biggest national bank in the country. In order to understand the causes, impacts, and procedures of such breaches without proper knowledge of authorities, this research has been carried out.
The literature review provides information from existing literature on a particular aspect. in this regard, a literature review helps one researcher to analyze the available research materials that are present in hard copy or soft copy. Available literature helps the researcher to conduct the research in accordance with the topic and it provides knowledge on the aim of the research. Therefore in this aspect, auditing industry-oriented literature will be considered as a valuable data source and the researcher will emphasize more on literature related to unethical breaches in the auditing industry. By analyzing the available literature, the research will provide information related to the above-mentioned aspects. Apart from this, the literature will help the researcher to recommend a rectification methodology to improve the current standards of the auditing industry of Australia.
Ethical issues in banking audit
Depending upon the auditing results, an organization gets financial support from the market.
Hence becoming a trustworthy advisor is one of the necessary things for the auditor, and in this aspect, he has to comprehend the demands of the investors and the internal management of the organization. People often state that there are challenges but overcoming the auditing-oriented issue is depending on the approach of an auditor. The final result submitted by the auditor will have a significant impact on the market reputation of the organization. An organization always seeks better public relationships by providing them adequate service at a reasonable rate.
Ethical issues in bank auditing
Since the banks of any country have to keep a certain deposit amount to the central bank of the country. Therefore in some cases and auditor gets the tempered file and fails to find the meddled section. Therefore this leads to the submission of wrong information related to the bank’s financial transactions (Houghton and Campbell, 2013). In this manner, the economy of a country faces depreciation and the investors get affected. Disclosure of file tempering coins questions related to auditor’s efficiency where the auditor has no knowledge of the matter. The management breaches the ethical considerations and an auditor faces the issue for a long time.
Impacts of noncompliance with ethical issues in Commonwealth Bank
Since it is essential for all the banking sectors to maintain all the rules and regulations and keep the record of each and individual transaction in an efficient manner for future references. The auditing staffs and accountants of all business organizations need to maintain all the documents of customers safely. Commonwealth bank generally faced civil obligations due to different financial issues in auditing. Hence according to the code of conduct of financial services, it has been recognized that all the business organization is encouraged amending or modifying their codes based on new frameworks. The ASIC has the power to approve the codes that are related to the country’s regulations.
The code of ethics generally enables the customers to stop passing different personal information to bank subsidiaries. Since all the financial sectors need to disclose it’s all the fees and banking sectors needs to keep all the debits and credits perfectly (Steen, McGrath and Wong, 2016). Now the digital technology also enables the banking sectors to provide every transactional message to the customers through the mail.
Recommending control measures to prohibit unethical breaches
Therefore auditing should be considered as a serious project, which will provide an opportunity to the investors who are looking for benefits from their investment.
Firstly, an auditor has to take an unbiased approach to conduct an audit. During the process, he has to consider every minute aspect that can have effects on the functionality of an organization. Auditors often get distracted from their responsibilities and get attracted to the luring offers of an organization. In these cases, an auditor should take necessary legal actions against the company, which is offering such inducement.
Chapter three: Research methodology
The research methodology is the foundation of research. Hence a researcher has to ensure that the selected methodologies for conducting the research are relevant to the objectives, otherwise, the final result of the research will not meet the requirements. Research methodology provides a logical interpretation of selecting the data collection method and findings of the collected data.
There are four types of research philosophies, which can be taken into consideration and they are positivism, realism interpretivism, and pragmatism.
Therefore In order to conduct services, the researcher will consider positivism research philosophy because it is a structured approach where large samples can be utilized. Conducting a quantitative data analysis is easier with this philosophy but it can also include qualitative data analysis.
The research approach is a vital aspect of research because it helps in breaking down the arguments to different levels.
Since the deductive research approach helps in logically interpreting the available theories, which are related to research. Hence inductive approach helps in establishing a new theory, which will not be helpful for this research. Hence that is why the researcher will not consider this research approach to be useful in this particular case.
Data collection method
Hence there are two types of data collection processes; primary data collection method and secondary data collection. Primary data collection relies on factual evidence where secondary data collection relies on journals, articles, and other printed data sources(Wilcox et al., 2012).
Therefore to conduct the research has considered primary data collection method.
Reliability and Validity
Hence the research is going to focus on the aspects related to the Australian banking sector. Hence the research will include the necessary elements and logical approach to meet the objectives. The use of relevant literature and an unbiased approach will make the research reliable for the future generation.
Therefore the above section has detailed the process through which the researcher is going to ensure proper research. In this regard, the researcher has selected different types of research methodology elements, which are reliable and acceptable to conduct the research in a proper manner. Following the above-mentioned procedures, the researcher will achieve the objectives precisely.
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Austlii.edu.au. (2018). CORPORATIONS ACT 2001 – SECT 336 Auditing standards . [online] Available at: http://www5.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s336.html [Accessed 28 Aug. 2018].