FNSACC403B Make Decisions in a Legal Context(1) (1)

Assessment Task 1 – Written Questions


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Question 1-In your own words, briefly define civil law


In your own words, briefly define criminal law


What are the two main categories of law in Australia?


Question 2: Under the doctrine of the separation of powers, the Commonwealth government is separated into three branches. What are they and who controls them?


Question 3: Give a brief definition (in your own words) of the following legal terms:

  1. Appellant


  1. Class Action




  1. Doctrine of Precedent


  1. Judge


  1. Jurisdiction




  1. Respondent


  1. Summons



  1. Tort


Question 4: What are the three sources of legislative power which exist between the Commonwealth and the States? In your own words, briefly describe their powers.


Question 5: In April 2006, the Australian Securities and Investments Commission (ASIC) released the enclosed booklet entitled Better regulation: ASIC initiatives. This document outlines a number of regulatory enhancements ASIC intends to deliver. What are ASIC’s six priorities as listed in the above booklet?



Question 6: Why was the Financial Reporting Council established?


Question 7: What is monetary policy and who is responsible for it?


Question 8: The Corporations Act 2001 includes the Financial Services Reform (FSR) Act. What are the four major changes on the way financial services are regulated due to the FSR Act?


Question 9: The CLERP 9 Act contains a number of important reforms to the existing corporate governance provisions in the Corporations Act. What are the main reforms of the CLERP 9 Act?


Assessment Task 2 – Case Study

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Review the following article from ABC News on the Qantas Takeover Bid.

ACCC examines Qantas takeover bid

15 December 2006, ABC News Online

Australia’s competition regulator is seeking industry feedback as it launches a review of the Qantas takeover bid.

The Australian Competition and Consumer Commission (ACCC) says it has started its market inquiries into the $11.1 billion takeover offer for the airline.

It will take a close look at the possible impact on customers, suppliers and competitors in both the passenger and freight markets.

The ACCC has noted that one member of the bidding consortium, Macquarie Bank, holds a 49 per cent interest in Sydney Airport and that other consortium partners also have air transport interests.

But the head of the ACCC, Graeme Samuel, says Macquarie’s involvement might not be a problem.

“The bidding vehicles or the bidding entities that are being used in respect of the private equity acquisition and Sydney Airport are two entirely different entities with different shareholders and that may well mitigate any competition concerns that might arise from that common participation from Macquarie,” he said.

The competition watchdog wants to receive written submissions from other industry players by January 29 and will be seeking talks with aviation industry participants in the coming weeks.

Question 1: Which Parts of the Competition and Consumer Act 2010 have been identified as of concern?



Question 2: What is the difference between compliance and risk management?


Question 3: What are the financial consequences of a breach of Restrictive Trade Practices provisions under the Trade Practices Act?


Question 4: What is the name of the association that oversees the rules and policies associated with Australia’s trillion dollar over-the-counter markets?






Critical Assessment Task 3 – Case Study


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Review the following article dated 7 December 2006 from Risk Management Magazine on the growth of internal audit.


Internal audit growth, influence on the rise

Internal audit is more influential and better resourced than ever, with growth in team size continuing, a new study of the profession has found.


Despite significant growth in function size over the past few years, 38 per cent of internal audit chiefs polled by Ernst & Young (EY) said they increased the size of their internal audit teams this year. Similar growth was recorded last year, and reflects increased coverage of internal controls and more involvement in the oversight of risk management frameworks.


According to EY’s Craig Jackson, Oceania leader for risk advisory services, the growth was being partly driven by a greater need for assurance, particularly from audit committees, which are looking for comfort that all risks are being effectively managed in the tighter regulatory environment.


“The chairman needs to have comfort that, at all levels in the organisation, there is an understanding of the internal audit and risk management functions within the framework of each business within the organisation’s goals and objectives,” he said, adding that internal audit has a key input to strategic management. “The value derived from the internal audit … review enables senior corporate management to manage business risks whilst protecting and enhancing shareholder value.”


The EY study also unearthed areas of conflict in internal audit, Jackson said. “This year’s survey shows that while internal auditors see their primary role as providing assurance, the business increasingly sees them as consultants and advisors,” he said. Management is keen to extract more value from the function, Jackson added, using it to identify opportunities to improve business performance.


Some internal auditors had been concerned that the progress made by the profession in recent years in terms of growth – the Institute of Internal Auditors’ [IIA] membership grew by 20 per cent in 2006 – influence and salary, could be reversed. However, the finding that 83 per cent of management executives see the function as a consultant and adviser – up from 66 per cent last – suggests the sea change in internal audit is not temporary.




“This [the 83 per cent finding] shows that internal audit’s unique vantage point over the business is clearly recognised by management who want to extract maximum value from their business-wide perspective,” Jackson said.


Coinciding with the increasing importance of the internal audit function, the study also documented an increasing focus on risk management generally. Jackson said internal audit was very much involved in the increasing focus.


“Internal audit is having greater involvement in strategic, financial operational and compliance controls and is being asked to oversee the identification, management and monitoring of risk across the organisation,” he said. Nearly 80 per cent of respondents said risk awareness has increased in their organisation and cited increased focus on risk by risk and compliance or audit committees as evidence.

In terms of working with others, the most common use of internal audit is to support fraud investigations, a consistent finding over the past three years. However, far from just being involved in financial audits, respondents to the survey – which included CFOs, CEOs and chief audit executives – said internal audit is also involved with business risk, IT risk and ethical and environmental issues.


While the study had generally good news for internal auditors, there were some issues. One potential problem is the ongoing conflict inherent in the work of some internal audit functions. With close to two-thirds of respondents to the study reporting that internal audit provides independent assurance over risk management practices, while also developing and assisting in the oversight of risk management in nearly half of the responding organisations, the potential for tension is clear.


“These results illustrate the perpetual challenge facing internal audit departments, that of objectivity and independence, and the ongoing balance between the dual roles of adviser and policeman,” Jackson said.


There were also concerns that not enough institutions are commissioning independent reviews of their internal audit functions. Just under 30 per cent of respondents have commissioned such a review, despite the IIA’s International Standards for the Professional Practice of Internal Auditing mandating that an external quality assessment be performed by 1 January 2007.






Q1 How is the role of internal audit changing within the organisation?


Q2 List two responsibilities of an Audit Committee.



Q3 Do a research online and find out five elements that should be contained in an Audit Committee’s charter (committee objectives for example can be one of them)


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