AMP Bank is usually a financial institution operating in Australia which provides residential mortgages, deposits as well as self-managed superannuation finance produces. The institution also provides banking services and financial loans to different individuals across the region. In essence, the bank headquarter is in Parramatta, Australia (Insights Magazine 2018). It is one of the largest corporate and retail superannuation service provider as well as the largest life risks enterprise within Australia. Despite this, there are some revelation relating to the bank systemic misconduct which were surfaced during the era of Royal Commission hearings in the misconduct in superannuation, financial services and banking section by April 2018. Some of these misconduct included, unlawful deductions from the deceased client’s account, provision of inappropriate financial planning advices to the clients, repeated misrepresentations as well as misleading the corporate regulators, interference with independent report for the ASIC, breaching of the Corporation Act as well as misconduct in the financial planning process. With such, the paper presents evaluation of AMP Bank performance with particular focus on its insurance activities and financial planning in the year 2017. Additionally, the paper presents assessment of ethical performance of the chief accountant working in AMP insurance and financial planning. It also presents explanations of the key purpose of auditing and offers evaluation of the main responsibility of auditing in promotion of socially responsible results, stewardship and common goods. It is then wrapped with a conclusion of the overall situation being discussed.
According to the video, it is evident that AMP Limited acted in a manner that embedded stewardship, social responsibility and sustainability as well as common good on their insurance activities and financial planning (ABC News 2018). This is evidence in the fact that the Bank charged its customers for financial services advices they were not given. The company is also said to provide misleading claims or financial plans to its clients this could result to the senior executive being jailed (Financial Review 2018). According to a court hearing, AMP Bank head of the financial advice admitted that the bank had been charging clients feed for financial advices, which in real sense they did not offer nor which they did not have any intent of providing. Furthermore, in the video, AMP representative stated that AMP Bank had repeatedly lied to the regulators (ASIC) on financial planning and members of the leadership were fully aware of such event though they consciously selected profit over compliance (ABC News 2018). Such acts are said to embed stewardship since the staff responsible for keeping books of the accounts failed to do so and even failed to maintain proper accounting records (Insights Magazine 2018). Furthermore, the accountants produced financial statements that did not shows fair and true view of the bank. All these acts are said to embed socially responsibility, common good, sustainability as well as stewardship within AMP Bank’s operations.
Ethics is usually the moral or code systems that offers criteria for assessing the wrong and right. In other words, it is all about rules of conduct which guide the behavior. Ethical code regulates professional behaviors by spelling the dos and don’ts. In this scenario, some of the ethical performance of AMP Bank Limited accountants working at financial planning and insurance arms include unlawful deduction of the service fees from the deceased client’s accounts as well as charging customers for undelivered financial services (Financial Review 2018). Despite the accountants voicing concerns and having some knowledge that the act were in breach of ethical code and their duties, they unlawfully deducted the service fees with the aim of maximizing the bank profit at expense of customer’s best interests and at the expense of compliance with set law. Further, another evident of ethical performance of the AMP Bank Limited’s accountants is provision of inappropriate financial plans to the clients (ABC News 2018). This is contrary to the set laws and contrary to the APES 110 and APES230 code that requires them to ensure that appropriate financial advices are provided to the customers. There is also some evidences of ethical performance where the accountants are said to have made repeated financial misrepresentations, hence, misleading corporate regulators about the insurance services being offered by the bank (The Guardian 2018).
To be more specific, it is unethical for the accountant charging clients for financial advices they had not been given (Insights Magazine 2018). The accountants also acted unethically by lying to the corporate regulators and manipulating the external investigation. Lying to the corporate regulators was a breach of Corporations Act and breach of APES110 and APES230. Regulations are usually in existence in protecting clients from being unfairly treated; hence, lying to the regulators (ASIC) is a very serious offence committed by accountants. Basically, accountants working at AMP Bank insurance and financial planning arms acted unethically by doctoring the independent reports and lying to the regulators ASIC, which is against the set laws and regulations (The Guardian 2018). This is said to negatively reflect on its brand and diminishing attractiveness of the bank to different investors since it diminished actual outlook for this firm.
Auditing entails examination or assessment of financial report of a specific firm as presented in its annual report by an independent firm. With such, auditing is very crucial in any organization and in specific its play a crucial part in AMP Bank Limited in promoting stewardship, socially responsible outcomes as well as common good. In essence, the purpose of auditing in AMP Bank is to form view on whether information presented in its financial report reflects true and fair financial position of AMP Bank (Arens, Elder & Beasley 2013). To be more specific, auditing would be important in assessing whether profits in AMP Bank are properly assessed. This would enhance socially responsible outcomes and in turn enhance common good. According to ToughNickel (2016), auditing would have helped assessing AMP Bank financial statements to ensure that they are in conformity with the GAAP, which would have in turn helped in promoting socially responsible outcomes. Furthermore, auditing would have played a crucial role in providing useful information to the corporate regulators like ASIC regardless of the cost which would have been in turn useful in promoting common good and stewardship (Messier, Glover & Prawitt 2008). Basically, auditing would have been crucial in promoting stewardship in AMP Bank since its key role entails keeping books of the accounts and enhancing proper accounting records. It duty also including producing the financial statements which displays fair and true view of the bank and producing director’s report that is in line with financial statement and that contains specified information (Arens, Elder & Beasley 2013). This would in turn help in promoting stewardship and socially responsible outcomes.
Conclusion
In conclusion, AMP Bank Limited has a strong duty to play in order to bring in changes required in turning its culture around and restoring the community faith. In fact, the AMP Bank manages fund and provide advices on behalf of a good number of clients and has been referred to Fifth Pillar of Australian financial service sector alongside Big Four banks. Therefore, it is not that easy for such an institution to diminish inevitably if it fails to address the ethical cultural issues pointed above. In this regard, AMP Bank should attempt to address all the ethical issues reported above and in turn try to mend its reputation and brand’s name in order to return to its original position as one of the leading financial institution in Australia.
References
ABC News (2018), ‘Basic philosophy of ripping off the customer’: AMP under fire over fee-for-no-service: https://www.youtube.com/watch?v=lu7o06S7FGA (accessed 25th August 2018).
Arens, A, Elder, RJ & Beasley, MS (2013), Auditing and assurance services. Pearson Higher Ed.
Financial Review (2018), AMP – it’s either an ethical quagmire or a screaming buy; https://www.afr.com/opinion/columnists/chanticleer/amp–its-either-an-ethical-quagmire-or-a-screaming-buy-20180511-h0zyy5 (accessed 25th August 2018).
Financial Review (2018), Banking royal commission: The remarkable hypocrisy of AMP; https://www.afr.com/news/politics/national/banking-royal-commission-the-remarkable-hypocrisy-of-amp-20180420-h0z14g (accessed 25th August 2018).
Insights Magazine (2018), The Banking Royal Commission: an ethical investment perspective: https://www.insights.uca.org.au/features/the-banking-royal-commission-an-ethical-investment-perspective (accessed 25th August 2018).
Messier, WF, Glover, SM & Prawitt, DF (2008), Auditing & assurance services: A systematic approach. Boston, MA: McGraw-Hill Irwin.
The Guardian (2018), Banking royal commission: AMP says adviser with conflict a ‘grave concern’ – as it happened: https://www.theguardian.com/australia-news/live/2018/apr/23/banking-royal-commission-anz-amp-nab-evidence-live (accessed 25th August 2018).
ToughNickel (2016), The Nature, Purpose, and Scope of an Audit and Review; https://toughnickel.com/business/NATURE-PURPOSE-AND-SCOPE-OF-AUDIT-AND-REVIEW (accessed 25th August 2018).
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