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Optimizing BHP's Operations Through Audit Risk Assessment and Marketing Strategy

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Introduction : Individual Assignment Major Audit Risk Areas Assignment Sample

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Company profile

Evaluate the audit risk areas of the BHP group also known as the leading resource company and an effective marketing strategy helps to develop commencing operations. The resource allocation techniques are effectively managing how to maximize operational efficiency across the country. Apart from that, the inventory management of the organization is necessary to develop companies’ financial growth which is efficiently using some crucial technological equipment. The company was established in Melbourne in 1985, gradually holds hundreds of physical stores spread over Australia and is successfully listed in ASX (Bhp.com, 2022). In order to, successful acquisition of business techniques is always mandatory for the individual business industry. The company also known as mining and chemical is gradually increasing more capability to enhance business solutions. In order to, a successful business strategy always used by the company and that gradually increases the revenue by 12.89% respectively in the financial year of 2020.

The performance of BHP Group vs Industry

In the financial year of 2020, the company generated revenue of $8.19 billion through the continuous expansion of innovative tools and technology. At the same time, the challenging situation is creating major barriers for the business organization which is efficiently managed by the BHP Group. In 2020, the overall retailer sector suffered from tremendous pressure due to economic downturns, making the relatively healthy performance significant and obvious. Based on the Industry Performance Report (2020), the revenue in the computer and software retailing sector decreased by 1.81 percent between FY 2018 and FY 2019. In order to, identify the current financial structures of the business is necessary and that improves effective risk management which helps to protect an organization and create more value (Venter & van Eck, 2021). The company is also known as a leading resource that maximizes future opportunities by sharing reputable services which is reduce wastage. 

In order to, measure the business service, as well as utilities, is important which is efficiently managing reputable process activity across a single operation. BHP Group's strong performance, therefore, signaled potential risks, since this is not a necessity seller like supermarkets. However, investors should be alert to the potential audit risks when taking into account the overall economic environment, although the company's performance in FY 2020 remained strong, which is a positive sign for investors (Canning, Dwyer & Georgakopoulos, 2019). The major audit risk areas of the organization also identify how to achieve profitable outcomes by using maximum resource allocation. Apart from that, minimizing the resource allocation techniques in the business is mandatory which is necessary to achieve profitable outcomes during the challenging situation. It is the risk that a materially misstated financial statement is disclosed in a company's financial report, but the auditor gives an unsuitable audit opinion, as per the Australian Auditing Standards ASA200 (2019). In order to, meet the financial structures of the business most business organizations are trying to identify how to become improves sufficient cash flow in the business.

Potential business risk areas

Stock risk analysis

The market risk as well as liquidity risk also involves the stock market risk that is systematically involved in the business organization. In the financial year of 2020, the company also faced major financial risk due to the pandemic situation which is increased price fluctuations that directly affect the current market situation of BHP Group Limited. In order to identify the current market situation of the business the company uses maximum resource allocation which is effectively identified before investing in a stock. International peers’ analysis of this organization has determined productivity and performance regarding comparative analysis. Visualization of camel market capital and beta of BHP group and other pairs evaluate the national productivity and performance regarding comparative analysis that BHP group has performed If it is operational activities with huge potential organizational benefit. In order to, successful investing is important for the individual business organization which is trying to identify how to maximize the financial resources to improve its capital structure (Boiral, Heras-Saizarbitoria & Brotherton, 2019). Identification of Beta value of BHP group indicates 1.6 that provide impact on operational benefits and identify stock Price movement in different situations at presenting organizational structure price improvement provide financial benefits to investors. The major audit risk areas are also involved in the business during the pandemic situation and the market risk is also involved at the same time. According to the financial statement of the organization, the business operation also uses minimum resource allocation which technically reduces market risk.

Falling Chinese demand

Commodity demand for commodities is largely driven by the Chinese market. A report by BHP Billiton notes that China accounted for 61% of global seaborne iron ore demand, 39% of the copper demand, 40% of nickel demand, 43% of aluminum demand, 48% of energy coal demand, and 10% of oil demand in 2020. In order to, decreasing the global market demand directly affects the financial position which reduces the current financial position of the market. Apart from that, the BHP group also identifies the potential risk of the business which is efficiently identifying how to manage the major financial risk of the business (Martínez?Ferrero, García?Sánchez & Ruiz?Barbadillo, 2018). In order to, use innovative business strategy potential that can effectively fulfill innovative requirements. At the same time, the commodity cycle of the business is affected by the common situation and business demand is gradually falling during the same time which directly affects the financial performance of the business.

Apart from that, falling Chinese demand directly affects companies' financial performance. The remaining reserves of the business organization are decreasing and the estimated amount depends on price fluctuation. Identifying the current market situation of the organization and identifying the total expenses and revenue are also important and are able to generate the total earnings of the business (Michaelides, Rose & Garg, 2019). According to the financial report of the company's Industry Performance Report (2020), the revenue in the computer and software retailing sector decreased by 1.81 percent between FY2018 and FY2019. At the time of demand fluctuation, the company uses an innovative strategy which is necessary for global market growth. Upgrading the financial performance of the business compared to the exceptional challenges is also mandatory as that focuses on how to maximize the positive requirements of the business.

Environmental compliance

 The environmental impacts of mining are unquestionable. Furthermore, corporate social responsibility, safety, and health issues must also be considered. Compliance today is a costly and complex process compared to the more relaxed standards of the past, and regulation is likely to become tougher, not looser, in the future. Apart from that, the company always uses minimum resource allocation which is important for the business (Al?Shaer & Zaman, 2018). Leading a business organization during a challenging environment BHP Group uses an innovative strategy which is to identify how to constantly develop the current market position. In order to identify how to maximize financial performance it is mandatory to constantly develop the financial structures of the business. The environmental boundaries gradually decrease the financial performance of the organization which utilizes the maximum resource allocation techniques. Apart from that, operational disclosure is unable to fulfill company corporate social responsibilities and skilled employees are always dealing with the common situation.

Identifying environmental compliances is necessary for the individual which is needed to improve more energy sources that are required for business. Through our focus on operational and financial excellence, ever-more sustainable production and use of our commodities, and the creation of broader social value, we believe BHP will play an important role in achieving a cleaner and a more prosperous world while creating greater value for our stakeholders through doing so. In the financial year of 2020, almost $12044 is considered as net debt which is reduced in 2021 as compared to the previous year which is $4121 respectively. Apart from that, involving the climate solution in the business, most business organizations are trying to identify how to maximize the maximum return which is effective for the business.

Risk in the commodity cycle

Individual investors recognize how to maximize their financial ability by improving the commodity cycle but sometimes fluctuation in pricing involves a difficult situation in the business. The corporate strategy of the business organization is always used to resolve the potential outcomes which are improving investors' interest to generate revenue (Mui, 2018). In order to, the company searches for the long time contracts which are continuously improving the trading relationship with the investors. BHP will play an important role in achieving a cleaner and a more prosperous world while creating greater value for our stakeholders through doing so. At the time of demand fluctuation, the company uses an innovative strategy which is necessary for global market growth. In order to identify the commodity cycle in the business it is mandatory to be able to identify efficient structures. Managing global economic growth is identifying how to manage the financial performance of BHP Group. 

The risk commodity cycle, explains as well as examines the research difficulties which is to draw a conclusion based on the effective performance. Commodity risk is faced by individual business organizations which are efficiently managing all the financial resources of the business. Commodity risk management is an effective factor for the individual business organization and various strategies are involved such as hedging, forward contract as well as options contract (Vincent & Wilkins, 2020). A commodity is able to meet the business risk and efficiently focus on the structured approach. Most business organizations are trying to identify how to maximize the important requirements which are efficiently managing all the financial resources of the organization.

Major audit risk area 1: Source of income

Audit risk is the probability that the financial statement of the company contains a maximum error in the financial planning. Apart from that, audit risk is defined as the financial risk of a financial statement that is truly representative of the actual financial position of a business. In order to identify the source of inherent risk is crucial it is determined to identify all the financial activity during the period (Hoang & Phang, 2021). Despite the pandemic as well as lockdown situations are directly affecting the current market position of Bhp Group and the financial performance has decreased by 9.54% respectively in the financial year of 2020. However, the pandemic directly impacts the business organization which is necessary to predict the future market position of the Bhp Group. In addition, sometimes material misstatement involves major difficulties in the business which involves high risk in the business.

All business transactions are getting complicated during the time of the pandemic and efficiently managing how financial resources are involving technological development. The company has already misreported during the same time and is trying to be controlled by the management. The internal control of the business is efficiently identifying how to maximize the financial resources and improving the financial reporting. BHP will play an important role in achieving a cleaner and a more prosperous world while creating greater value for our stakeholders through doing so. The detection of risk is a crucial factor in every business and giving the correct opinion of the experts is mandatory to deal with a complex situation. Continued operational efficiency is necessary which maximizes the future scope by attracting individual investors. At the same time, individual auditors are failing to identify the reason for misreporting of financial statements. In addition, poor auditing procedures are unable to deal with misreporting of financial statements, and sometimes wrong audit procedures can be used by the individual audit committee.

Implications in financial performance

The high-performing culture, as well as the leading economy of the business organization, is mandatory which is control of almost 80000 contractors and employees. In order to, continuing operational efficiency is always important for the business and identifying the revenue and other income of the business is necessary to maximize more profit from the operation. BHP Group also identifies the potential risk of the business which is efficiently identifying how to manage the major financial risk of the business (Ji et al. 2018). Profit from the operation after continuing the operation is mandatory to improve the leading capability which is managing the challenging situation in business. In order to identify the current financial structures of the business is necessary and that improves effective risk management which helps to protect an organization and create more value. In the financial year of 2021, total revenue is almost $60817 million. The revenue level of the business also increased as compared to the previous year.

The profit from the operation is almost $25906 million in the same financial year which is $14421 million in the financial year of 2020, and that also increases due to high performing culture as well as a high-performing culture which efficiently improves the financial structure. Technology helps us to improve frontline safety, increase productivity, reduce cost, build capability and accelerate value creation. In order to leverage technologies such as cloud computing, cloud storage and smart analytics to enhance decision-making and advance mining technologies to automated equipment. In order to, identify the financial structures of the organization which is to maximize the efficiency level. In order to increase the primary attributable to higher average realized prices of copper and iron are achieved the recorded volume which is mandatory for the annual production. Managing the audit procedure of the organization is important and efficiently identifies how to maximize the sufficient structure of the business. In order to identify the current financial structures of the business is necessary and that improves effective risk management which helps to protect an organization and create more value. BHP organizational productivity has been Operated through ceiling of materials selling materials to customer that increase revenue of this organization. In order to financial structure of this organization has been operated by cost managing activities that provide financial benefit to this organization by minimizing the cost. Operational activities in this organization have been operated through other income like investment that improve organization profitability. Financial statement also performing organization productivity compare to financial expenditures that evaluate operational profit of this organization around $25906 million in financial year 2021.

The total expenses are almost $34.5 billion in the financial year of 2020 and that also increased the impairment charges in the business. Most business organizations identify how to generate more revenue in the business by reducing unusual expenses. Despite the pandemic as well as lockdown situations are directly affecting the current market position of Bhp Group and the financial performance has decreased by 9.54% respectively in the financial year of 2020. minimizing the resource allocation techniques in the business is mandatory which is necessary to achieve profitable outcomes during the challenging situation (Barr-Pulliam, 2019). It is the risk that a materially misstated financial statement is disclosed in a company's financial report, but the auditor gives an unsuitable audit opinion, as per the Australian Auditing Standards ASA200 (2019). In order to, decrease estimating revenue reserves is also mandatory for individual business organizations are mandatory to identify to measure their current financial position. The overall condensate of the business is involved by the remaining reserves which is reflecting the financial performance of BHP Group.

Audit procedure

  • Inquire the management about the cash handling policy and the different types of account policy
  • Determined the list of the bank accounts along with the balances and location of those banks
  • Mach the balances as per the provided list and identify all the financial activities
  • Reviewing the policies related to the bank and cash to easily identify the weakness of the internal control system
  • In order to, inquire about the misappropriation of cash and bank to identify the fraudulent transactions done from the accounts (Ballou, Greiner & Raffetto, 2021)
  • Identify the confirmation of the bank balance and verify the loans along with the balances
  • After reviewing the bank reconciliation statement carefully matching the general ledger which is an effective way to identify misappropriation
  • Inquire about the unreconciled items which are necessary to understand the impact
  • All the audit procedures have to be appropriately documented and obtain the results for the conclusion drawn.

Audit risk area 2: Interest-bearing liabilities and net debt

At the end of the financial year 2021, interest-bearing liabilities reach $21.0 billion while cash and cash equivalent were $15.2 billion during the same time. At the same time, the net debt also increased by $7.9 billion which increased as compared to the net debt position on 30 June 2020. In order to, improves the financial structure of the business identifying the position of net debt is also mandatory and efficiently identifies the individual investors. In the financial year of 2020, almost $12044 is considered as net debt which is reduced in 2021 as compared to the previous year which is $4121 respectively. In order to identify the current financial structures of the business is necessary and that improves effective risk management which helps to protect an organization and create more value. Identify the exceptional item also necessary for the individual business organization and that efficiently maximizes the major return. In order to, identify the generated cash in the business also mandatory and efficiently manage the effective financial resources of the business which is important to minimize the debt rate. Date of this organization has been determined to understanding financial burden carry by BHP organization. According to financial statement provide information regarding debt that indicate organization using external dates for business pension and continuous flow of working capital. Financial statement also impacted on profitability of this organization because interest cost has been consumed by BHP group. Basic earnings per share have evaluated return to earth investors that present organizational performance and view towards investors. Positive return toward investors increasing earnings per share evaluate Comments of organization is constantly going that attract investors for further investment. In order to identify the current financial structures of the business is necessary and that improves effective risk management which helps to protect an organization and create more value. Improvisation of capital my further investment through capital market provides financial flexibility to BHP group for business expansion and operating business with lack of external babes.

In order to, identify the net debt position of the organization is necessary which is efficiently managing all the financial resources of the business. Continued operational efficiency is necessary which is maximize the future scope by attracting individual investors. In order to identify the total expenses of the business organization individual organizations efficiently maximize the future opportunity to generate more revenue in the business. Apart from that, price fluctuation is also important for the business, and that reflects the higher loyalties for the business. In order to, meet the financial structures of the business most business organizations are trying to identify how to become improves sufficient cash flow in the business. The higher realized price rates are also mandatory for individual business organizations to identify the generating revenue during price fluctuation (Bonyuet, 2020). Based on financial resource of BHP group has operated organizational profitability improvisation of different types of investment in different business segment. Productivity of this organization helps to gain revenue growth in financial years because of acquisition different companies

In order to, improves the continuous growth of the business is necessary that efficiently manage all the financial resources. The combined calculation of the net debt determined the company's financial leverage and identifying the long-term, as well as short-term debt obligations, is important for the business. Productivity in this organization has disclosed possibilities of future gain through business operation expansion. According to process of productivity organization has been of cars is beneficiary in in marketing approach that evaluate organizational productivity regarding benefits with minimum cost consumption for operational activities. The consolidated income statement of the business is important to attribute the operational efficiency. In order to, identify all the financial pieces of information is also mandatory for the business and recognize the net operation cash flows is necessary. Numerous alternative performance measurement systems are also involved by the company which is controlled by the IFRS (Haapamäki, 2018). Consolidating financial statements is also mandatory for the business and efficiently measures the financial performance of BHP Group. BHP Group also identifies the potential risk of the business which is efficiently identifying how to manage the major financial risk of the business.

Conclusion

Based on the above discussion it can be concluded that the financial performance of BHP Group is incorporated with the investment community. The strategic report of the organization is necessary and APM provides useful information which is effective for future scope. In order to, substitute for the statutory requirement necessary and operating performance of the organization is efficiently measured by the net operating cash flow. The consolidated income statement of the business is important to attribute the operational efficiency. In order to, identify all the financial pieces of information is also mandatory for the business and recognize the net operation cash flows is necessary. 

The financial performance of the organization is necessary to measure the profitability of the business. In addition, measures of companies' financial outcomes are necessary for the business and companies' profitability and liquidity to identify the financial position. In order to, maximize the profitability of the organization is mandatory for the business and is attributable to the business. The total expenses of the organization almost decreased by 12.89% and that identify from the financial reports. In addition, inflecting higher loyalties in the organization is necessary for the business and efficiently managing all the financial resources. Multi years asset integrity program is designed to improve the reliability of the operations. The key development areas are necessary which is operating which is reflecting s strong operational performance.

Reference list

Al?Shaer, H. & Zaman, M., (2018). Credibility of sustainability reports: The contribution of audit committees. Business strategy and the environment, 27(7), pp.973-986. Retrieved from: https://eprints.ncl.ac.uk/file_store/production/225105/D85F06AD-8CAF-4925-B7D4-EE972044E5EA.pdf

Ballou, B., Grenier, J. H., & Reffett, A. (2021). Stakeholder perceptions of data and analytics based auditing techniques. Accounting Horizons, 35(3), 47-68. Retrieved from: https://zicklin.baruch.cuny.edu/wp-content/uploads/sites/10/2019/12/Brian-Ballou-Stakeholder-Preceptions-of-Data-and-Analytics.pdf

Barr-Pulliam, D. (2019). The effect of continuous auditing and role duality on the incidence and likelihood of reporting management opportunism. Management Accounting Research, 44, 44-56. Retrieved from: https://repofeb.undip.ac.id/1088/1/1-s2.0-S1044500518300635-main%202019-12-27%20%28Elsevier%29.pdf

Boiral, O., Heras-Saizarbitoria, I., & Brotherton, M. C. (2019). Assessing and improving the quality of sustainability reports: The auditors’ perspective. Journal of Business Ethics, 155(3), 703-721. Retrieved from: https://www.researchgate.net/profile/Olivier-Boiral/publication/315696463_Assessing_and_Improving_the_Quality_of_Sustainability_Reports_The_Auditors%27_Perspective/links/59da58e3458515a5bc2b4199/Assessing-and-Improving-the-Quality-of-Sustainability-Reports-The-Auditors-Perspective.pdf

Bonyuet, D. (2020). Overview and impact of blockchain on auditing. International Journal of Digital Accounting Research, 20, 31-43. Retrieved from: http://www.uhu.es/ijdar/10.4192/1577-8517-v20_2.pdf

Canning, M., O’Dwyer, B., & Georgakopoulos, G. (2019). Processes of auditability in sustainability assurance–the case of materiality construction. Accounting and Business Research, 49(1), 1-27. Retrieved from: https://www.tandfonline.com/doi/pdf/10.1080/00014788.2018.1442208

Haapamäki, E. (2018). Voluntary auditing: A synthesis of the literature. Accounting in Europe, 15(1), 81-104. Retrieved from: https://www.occ.pt/dtrab/trabalhos/xviicica/finais_site/67.pdf

Hoang, H., & Phang, S. Y. (2021). How does combined assurance affect the reliability of integrated reports and investors’ judgments?. European Accounting Review, 30(1), 175-195. Retrieved from: https://hrcak.srce.hr/file/312268

Ji, X. D., Lu, W., & Qu, W. (2018). Internal control risk and audit fees: Evidence from China. Journal of Contemporary Accounting & Economics, 14(3), 266-287. Retrieved from: https://livrepository.liverpool.ac.uk/3024738/1/Audit%20fees%202018.pdf

Martínez?Ferrero, J., García?Sánchez, I. M., & Ruiz?Barbadillo, E. (2018). The quality of sustainability assurance reports: The expertise and experience of assurance providers as determinants. Business Strategy and the Environment, 27(8), 1181-1196. Retrieved from: https://www.researchgate.net/profile/Emiliano-Barbadillo/publication/323691704_The_quality_of_sustainability_assurance_reports_The_expertise_and_experience_of_assurance_providers_as_determinants/links/5cd2e28ba6fdccc9dd94946b/The-quality-of-sustainability-assurance-reports-The-expertise-and-experience-of-assurance-providers-as-determinants.pdf

Michaelides, M., Rose, M., & Garg, M. (2019). Climate?related Risk and Financial Statements: Implications for Regulators, Preparers, Auditors and Users. Australian Accounting Review, 29(3), 599-605. Retrieved from: https://incp.org.co/Site/publicaciones/info/archivos/2019%20Australian%20Accounting.pdf

Mui, G. Y. (2018). Defining auditor expertise in fraud detection. Journal of Forensic and Investigative Accounting, 10(2), 168-186. Retrieved from: http://www.o-wallstreet.com/media/Syllabi/Summer%202020/Undergraduate/ACC4125_E1.pdf

Venter, E. R., & van Eck, L. (2021). Research on extended external reporting assurance: Trends, themes, and opportunities. Journal of International Financial Management & Accounting, 32(1), 63-103. Retrieved from: https://onlinelibrary.wiley.com/doi/pdfdirect/10.1111/jifm.12125

Bhp.com, 2022, About us. Retrieved from: https://www.bhp.com/ [Accessed on: 15th November, 2022] 

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