ANZ Bank Client Evaluation - Case Study Example

ANZ Bank Client Evaluation Report Name Institutional Affiliation Instructor’s Name Date Executive Summary. A client auditing report is an assessment of the risks involved and the benefits accrued from giving attender to the given client. This audit report will assess the viability and the potential ability of the ANZ Bank to be given the tender by a upped auditing firm, the applied, frankom is an auditing firm specialising in conducting g external auditing of different companies financial status while giving accounting and financial reports where required. The ANZ Bank is the client applying for the Francom auditing tender. The assessment of the ANZ Bank as the client to be tendered will include the assessment of Theban risks involved, these risks will entail the ability if the bank to fail to fulfil its mandate as well as any possible losses to be incurred by the bank winning the tender. However, the benefits of this tender will be greatly discussed in this paper to determine well the basis of the Francom auditing firm awarding the tender to the ANZ Bank. This paper, however, conducts the ANZ Bank client assessment for tendering process, while giving recommendation o if the bank is well suited to be given the tender. The Process of Assessing a New Client. According to Brad et all (2010 pp. 67), the process of assessing a new client in a tendering process for the audit form includes a series of steps. These steps are linked s the determining factors which enable the winning tender to be given the contract. In the case of the ANZ Bank and other tendering applications, the following criteria will be used it give the winning tendering applicant the contract. i. Pricing, the correct tender must have the correct pricing, which is reasonable to the financial status of the tendering company. In such case, the tendering company may opt the cheaper tender owing to the other factors. However, the cost in terms of pricing in tendering is always inversely proportional to the quality. A good tender offers a reasonable prolong, not expensive and bot cheap, to march completely the quality expected and the tendering company (Carmichael et all, 2012 pp. 45). Cheap pricing always produces poor quality of contract work. ii. Relevant experience and past performance. An experience in the tendering fields is highly required for any professional perfection of the auditing contract awarded. The experience helped the company winning tender well perfect the auditing contract given. An excellent past performance steers the tendered company to well perfecting the contract awarded (Gup, 2009 pp. 112). iii. Understanding and compliance with the requirements. The requirements of the tendering company are a requisite in the company. This effect make the tender winner be able to understand all then let areas of the contract. A contract awarded to a company not recognising the requirements will end up not perfecting some key aspects of the contract, for instance, in auditing, the company must be perfect in financial reporting and not account (Hull, 2015 pp. 23). The Appling Company should similarly demonstrate clearly how it intends to understand and comply with the company stated requirements. iv. Technical skills. Any application for the tendering process is evaluated upon the nature of skills and the ability of the company to skilfully conduct the work stated. The most skilful company in the stated fields of tendering is well selected, pending other factors (Carolan, 2014 pp. 43). v. Resource availability. Any company applying for the tender must be able to access the required resources stated. For instance, an auditing form must be in the acquisition of the key models for auditing, as well as the relevant and qualifies auditors and accountants to provide the human resource for the contract awarded (Hill et all, 2015 pp. 89). vi. Management skills and systems. A tendering process must be able to well manage the operations of the contract provisions. This effect entails the ability of the applying company to sustain project managers, as well as other personnel to well direct the tasks and the operations involved in the tendering contract. The company with an exemplary management system is well preferred for this category (Lewis et all, 2015 pp. 121). vii. Proposed methodology. Any company applying for the tendering process must clearly state the methodology it intends to use so as to perform its mandate if it is awarded the contract. A relevant and the sustainable, methodology well stated is preferred for any tender seeking to win the tendering contract (Rajagopal, 2010 pp. 33). Banking Audit Requirements for the ABZ Bank. As Lewis et all (2015 pp. 121). Assert, all banks are entitled to auditing in their course of their financial year, there are three types of a banking auditing. The first if the concurrent auditing, which occurs immediately as the transaction occurs, all transactions are followed by an audit of the entire financial system. The second is the internal auditing, which is done by the internal auditors with the help of the banking accountants of a certain bank. The last auditing, which OD the main auditing process, it’s the statutory auditing, done by a legal statutory auditor. This is the type of auditing wit requirements for any banking institution. The following are the requirements. a. Annual auditing. This is the editing done on the banking financial system after the end of the banks a financial year, different banks in different regions of the world have different reporting calendars. In this case, every bank has to conduct an audit of its financial system afloat once in every year. This financial auditing must be done by a statutory auditor, an external auditor appointed to conduct the auditing process (Lewis et all, 2015 pp. 21). b. The auditing process is the most important financial activity, with all accountant required to submit any form of financial information as required by the chief statutory auditor, the auditor should therefore not be intimidated on the reporting by any senior accountant. The process and the audit should be independent (Louw, 2012 pp. 66). c. Shareholder dividend is the expected results of the auditing process, as the financial statements such as the profit and loss account as and the balance sheets provide the auditor with the financial states of the bank, hence, allow for the management allocate effectively the dividend to the shareholders (Louw, 2012 pp. 66). d. The statutory auditors should not be made internally, but rather be appointed by a larger financial institution, preferably the country central bank. This gives the auditor the ability to work effectively without any form of institution. The statutory auditor should be coming from the larger financial system, or appointed by the institution. e. The statutory auditing for the bank does not essentially look at the nitty-gritty in the banking transactions. There are many to be looked up by the concurrent an internal auditing processes (Louw, 2012 pp. 66). This auditing process majorly riles on the concurrent auditing. f. This auditing process majorly looks at the major transactions of the banks such as the loans, advances, compliances as well as the CRRs, and the SLR. These represent the banking major transactions representing lump sum amounts of money in and out of the bank account. Banking Audit Risk Assessment In the ABZ Bank, there are some auditing risks associated with awarding the bank the contract, these risks are not worth taking, but they are subject to address before the contract. The following are the four business audit risks associated with the ABZ Bank tendering contract. i. Financial risk. The financial risk associated with the auditing contract at the ABZ Bank are the loss of finances regarding resources. Changes in financial position of any auditing company is not a worth taking risk, with many organisational greatly involved getting immense losses. A negative response from any external regulator is the possible negative outcome from this financial risk (Moore & Emmerich, 2015 pp. 78). Other associated financial risks include the loss of grantors, loss of clients due to a degraded financial system, as well as a low company rating in the market. ii. Compliance risk. Compliance risk resulted when the company warded the tender does not comply with the stated company requirements as well as regulations. The banking risk associated with this risk may involve the bank was not giving the required compliance information on the non-monetary policies, monetary policies as well as the interest rates (Moore & Emmerich, 2015 pp. 78). iii. Reputation risk. The A company id at a great risk of spoiling its reputation from the involvement of unreliable and irresponsible banking auditing, the auditing company is however exposed to a greater risk of losing its rapport over the other auditing companies, which intern make it lose the auditing customers. iv. Operational risks. One of the operational risks of auditing of a high potential to arise in the ABZ Bank auditing is the loss of the auditing company productivity. Any negative effect impacting on the auditing firm many negatively lower its reputation hence lower its productivity. This risk is highly associated with the ability of an auditing firm to loose most of its human resource to another firm, a factor which can arise from negative auditing or incorrect auditing of the ABZ Bank (Moore & Emmerich, 2015 pp. 78). The incorrect or unreliable auditing in the bank can arise from the bank not giving the correct information, or give vague data on the transactions previously recorded. A failed internal price is risk associated with the operational risk as well the reduced man power and external event recognition. Accounting Auditing Issues of the ABZ Bank That May Be Of Concern. As Nestle (2013 pp. 17) assert, upon the analysis of the AB Z Bank, some issues were evidently able to impact negatively in its auditing, the following are the issued from the ABZ Bank; i. Changes in the general business and the economic conditions. The ABZ Bank is negatively affected by the business set up in the Australian and the New Zealand sectors. The business sector in these two countries id negatively dropping, owing to different and many entrants into the market. Similarly, there is an economic change in these two countries, which is greatly a negatively impacting the operations and the performance of the ABZ Bank (Nestle, 2013 pp. 17). The effect results in the disruption of the local and the domestic market, where the ABZ Bank serves. ii. Stiff competition forms other many Australian and New Zealand banks. There is stiff competition from many banking institutions in the region, with many financial institutions opening up in the area, this is making the ABZ Bank lose many clients for the minor credit offering institutions. The loaning agencies of the credit facilities of great competition for the ABZ Bank as well as other major banking institutions in Australia and New Zealand (Nestle, 2013 pp. 17). iii. Changes in the monetary policies. There are great changes in the monetary policies of the Australian market, and similarly, the New Zealand markets, some of these monetary changes include=e the government regulations to the extent of charging for the interest rates. The government has substantially regulated the interest rates in different credit facilities, negatively impacting on the ABZ Bank (Reynolds, 2011 pp. 90). iv. The sovereign risk may greatly destabilize global financial markets. There is an increasing sovereignty of many international financial institutions accredited by the international monetary fund. These banks gain sovereignty and enter in great impacts the Australian and the New Zealand financial industries (Nestle, 2013 pp. 17). This great disabilities the global markets shifting the market shared to their favors. Being international and world-shaking companies. v. The weakening real estate markets in both the Australian and the New Zealand markets. Real estate sector is a very contributory sector in the Australian financing. The sector greatly impacts on the profit making and the market performance of the ABZ Bank, which offers the best terms for the real estate banking clients, the sector is, however, lowering in productivity, hence lowering the ABZ Bank performance in the market (Lewis, 2015 pp. 49). vi. Liquidity and funding risks. The ABZ Bank is facing several liquidity risks after the main finding bodies of the bank seem to defect negatively from offering their assistance to the financial institution. The level of funding in the banking activities are lowering to impact negatively on the bank performance (Pride et all, 2015 pp. 46). vii. Regulatory changes and the failure to comply with the government regulations. There are different regulations set by the government in different banking sectors, which are negatively affecting the market performance of the ABZ Bank. Some of these regulations involve about the non-monetary policies as well as the interest rates (Kumar, 2015 pp. 51). viii. Risks of receiving regulation fines and also the sanctions. The ABZ Bank risks facing some financial sanction for failing to comply with the provisions of some of the contracts it's involved in. The bank is facing breach of contract fines with different brand names it signed contracts with (Pride et all, 2015 pp. 46). Limitations of the study. This research is only limited to auditors as well as the accountants of the ABZ Bank in Australia and New Zealand. The respondents of the report project were the only employees of the bank who were willing to give consent. Outsiders and other bank employees were nor accepted to take part in the study. The study was additionally limited to those employees of the auditing firm who were willingly able to give consent. Those giving out information did so freely and voluntarily willing to offer the required help. Conclusion and Recommendations. The audit tendering process of the ABZ Bank is a selection to award the tender on the bank auditing. The bank has several positive impacts that may positively help the auditing firm. However, there are associated risk which are facing the banks and which may negatively impact on the awarding the ABZ Bank the contract in the tendering process. These risks need a great reevaluation to make sure they won’t tint the image of the auditing company involved. This report, however, has the following recommendations for the ABZ Bank and the tendering process of awarding the ABZ Bank the contract tender. i. The ABZ Bank should be compliant with the provisions of the statutory law, as well as the government laws so as to reduce the chances of sanctions from the external companies it has contracted with. ii. The bank should induce a more competitive strategies to win back the competitive advantage it has in the Australian and the New Zealand societies. iii. The bank should comply with the government interest rates and the reserve bank of Australia’s monetary and non-monetary regulations. iv. The bank should induce inn attracting more funding organizations to keep its financial edge competitive in the Australian and the New Zealand economies. v. The bank should reevaluate its application terms in auditing so as to win more tenders in auditing firms. References. Brad low, Daniel D., and David B. (2010) Hunter. International financial institutions and international law. Alphen aan den Rijn, the Netherlands Frederick, MD: Kluwer Law International Sold and distributed in North, Central, and South America by Aspen Publishers. Page 67 Carmichael, Jeffrey, and Michael Pomerleano. (2012) The development and regulation of non-bank financial institutions. Washington, D.C: World Bank,. Print. Page 45 Carolan, M. (2014). Cheaponomics the High Cost of Low Prices. Hoboken: Taylor and Francis. Page 43 Gerber, K. (2011). Marketing communication. Cape Town: Pearson Education South Africa. 41 Gup, Benton E. (2012) Banking and financial institutions a guide for directors, investors, and counterparties. Hoboken, N.J: Wiley,. Print. Page 112 Hill, C., Jones, G. & Schilling, M. (2015). Strategic management theory. Stamford, CT: Cengage Learning. 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