Reference no: EM133542078

Case: Auditing in the Real World Issue1: The HIH Collapse and their Model for the Internal Control Committee Background and Context: The main companies in the HIH Insurance Group were placed in provisional liquidation on 15 March 2001. The collapse of HIH is likely to be the largest corporate failure in Australia to date. The losses and hardship inflicted on the Australian community by this corporate failure have significantly contributed to the current insurance crisis. HIH had a corporate governance model, but the Royal Commission found that HIH failed to review the model to assess its suitability for changing circumstances in the insurance industry. HIH altogether lacked an identifiable long-term strategy and, accordingly, developed only opportunistically. The company's decision to re-enter the US market typifies this, premised as it was upon purely anecdotal evidence and following a well-reasoned strategic decision to withdraw from the market only a few years earlier. The decision to purchase FAI without due diligence, the expansion into the UK market and the Allianz joint venture - a woeful decision with patently predictable yet thoroughly crippling effects on HIH's vital, insurance-premium income stream were examples of problems and reasons for such high-profile corporate failure. You are required to dig deeper into the heart of the problems and answer: where were the auditors? Issue 2: HIH-Style Conflicted Service Providers Background and Context: HIH broke every rule in the book regarding conflicted service providers being on the board. It is argued that at HIH, there were conflicted service providers. Under s324CD, a 'conflict of interest situation' exists either where 'objective and impartial judgement in relation to the conduct of the audit' is not possible or where a reasonable person 'would conclude' that such judgement is not possible. You are required to perform scholarly research and explore the facts to confirm that there was a "conflict of interest situation" at HIH. MPA510 - Assignment - TIIS T2, 2023 3 Issue 3: ASX Corporate Governance Council Principles and Specific Guidance in relation to Audit Committees Context: Visit the webpage of the Australian Security Exchange dealing with corporate governance.

Download the ASX Corporate Governance Principles and Recommendations (4th Edition). The problem requires students to use the Internet to research:

1. The purpose of ASX Corporate Governance Principles and 2. the Specific guidance in relation to audit committees.