Dsicuss about the Reasons For Collapse Of These Corporate Entities.
The discourse of the study aims to identify the proceedings which led to the insolvency of “ABC Learning, HIH Insurance and One.Tel”. The study has been able to focus on the different types of the reasons for collapse of these corporate entities. The main discussions of the study have further considered the identification of the various types of ethical issues as per CPA code of conduct. The next section of the discussion has been supported with the numerous types of the relevant material which are seen to be related to the evaluation of corporate governance per ASX rulings and related to the case with the companies considered for research. The final section of the research has discussed about the liabilities of the companies before they became defunct (Brown and Davis 2015).
“ABC Learning Center” encountered several problems which are identified in terms of outcome from the “subprime mortgage crisis”. This is further depicted to lead to the problems associated to the reason for debt repayments to overwhelm the company. Moreover, the auditors have unsuccessful to sign off the financial reports, thereby failure of the company to recast the preceding year’s reported profit. It has been also discerned that the company entered into “voluntary liquidation” in 2008, which was further taken over by “Goodstart Limited in December 2009”. The failure of ABC Learning was identified because of the significant nature of the drawbacks associated to inherent risks in the business. The evaluation of material misstatement made in the last three years since its failure is another reason. It has been also discerned that Australia has moved as per the communality-dominated childcare service in the previous three years from a “private dominated model”. However, there had been no definite mistake in the former model which has been able to acclaim about the sound model on addressing the early childcare services (George 2015). The failure of “ABC Learning” is also considered with the various types of the corporate social responsibility identified with the common good and stewardship, which are identified with increase in the government subsidy and stressing on the acquisition of the childcare centres instead facilitation of the childcare centers as a government entity (Nyland and Ng 2016).
The main demise of HIH insurance is depicted with the liquidators encountering more than $ 5.3 Billion in losses. The company was forced into liquidation due to several instances of mismanagement. The strategy team of the company failed to identify the long-term strategy and only focused on opportunistically. In addition to this, the sales of the company were not enough to run the operating expenses. There had been multiple cases of outright fraud and the accountants of the company are also responsible for such a failure. The result was followed with a series of disasters which eventually compelled the company into liquidation (Hessian 2014).
In case of One. Tel it has been discerned that the IT strategy needed upgrade and the company policy was not suitable for the later ambitions. Most importantly, it has been depicted that apart from IT failure the company also suffered from maintaining business ethos. The company was “worth $3.5 billion as on January 2001, and the share price doubled within days”. However, on February 2001 the HIH insurance’s director “Rodney Adler” sold “5 million shares for an amount of $ 2.5 million”. In the month of April and May, the problems became increasingly evident as “News Limited and PBL” reneged upon the agreement for to subscribing to a “rights issue at 5 cents per share to supply another $132 million”. Since then the company was insolvent laying off more than 1400 employees from 8 June 2001 (Callcut et al. 2016).
“APES 110 Code of Ethics for Professional Accountants (Code)” issued by the “Accounting Professional and Ethical Standards Board (APESB)”. APESB is identified as an independent body formed in the year 2006 with the initiative of “CPA Australia” and “Chartered Accountants” in “Australia and New Zealand (then the Institute of Chartered Accountants in Australia)”. Significant role of APESB is identified to develop and address the issue of “professional and ethical standards” pertaining to public interest which applies to the members of CPA Australia along with two other Australian accounting bodies. The code is identified to be grounded on the “code of ethics for professional accountants” circulated by “International Ethics Standards Board for Accountants (IESBA) of the International Federation of Accountants (IFAC)”. The important nature of the issues considered with the ethical theories are depicted with the breach of the Normative principles applied in ethics. All the members practicing Australia and abroad needs to conform with the code except they are being prevented by the applicable laws and regulations (Gallagher 2017).
It needs to be also understood that the breaches for “ABC Learning, HIH Insurance and One.Tel” is associated to the loss pertaining to the ongoing customers/service takers. It has been further discerned that the various problems raised are seen in terms of the loss caused in most of the financial areas with existing customers. The various types of the other considerations have been identified in terms of the ethical issues identified with the accountants of “ABC Learning, HIH Insurance and One.Tel”. The collapse of the organization is further seen to identified to be causing harm in terms of the associated issue related to anomalies in the reported data. The accountants of the company are further depicted to violate the code of “APES 110 Code of Ethics for Professional Accountants (Code) issued by the Accounting Professional and Ethical Standards Board (APESB)”. This aspect is seen to be depicted as per the failure to comply with the corporate governance practices and the concerns which hampers the position of the company in major ways (Howard 2015). The different considerations for the technical training for the accountants is seen to be depicted in terms of the majority of the ways which has been identified as the key problem associated to wrong casting of the report. The failure of the companies has been also depicted in terms of the breach of the ethical norms which has been considered with the material misstatement of the accounting information. Some of the different types of the other areas of the problems has been depicted with eh significant nature of the issues which are seen to be based on the significant nature of the problems based on the inaccurate computation of the financial statements (Klein and Li 2016).
The main applicable ASX rulings in the given case is seen with principles such as “continuous disclosure, periodic disclosure, securities, changes in capital and new issues, transfers and registration, restricted securities, transactions with persons in a position of influence” and significant transactions. The need for the continuous disclosure signifies that after an entity becomes aware of the information pertaining to reasonable person, the material effect on the price and worth of the entities safekeeping must be immediately informed to ASX. The periodic disclosures need the entities to satisfy the requirement for disclosing the financial statements “each quarter, half year and end of year”. ASX also requires annual report to be sent to shareholders of ordinary security and preferred securities. In addition to this, the entities should also note that “ASIC regulatory guide 28” deals with relief from dual lodgement of financial report. The principles based on securities states that the ASX listed entities are required to state both quoted and unquoted securities unless otherwise stated. The principal associated with changes in capital and new issues has been identified with entities finalizing the proposals with ASX listed securities and reorganizing existing capital. This includes reconstructions and buybacks. The explanatory note as per transfers and registration is related to reading the conjunction with operating rules of approved CS facility before proceeding with transfer and registration procedures. Restricted securities are associated with the restrictions which are enforced by the requirement that restricted securities may not deal for a specified time and the restrictions are enforced by the requirement that the holders of certificate given to a bank must comply with the ASX guide note 11. The principal as per businesses with persons in a position of influence scoreboard with acquiring and disposing of substantial assets by the entities to be approved by ASX. The significant transactions must adhere to the requirements in chapter 1 and 2 of the ASX official list.
In general, the noncompliance of the ASX corporate governance have led to the loss of credibility as the aftermath for the incident. This also led to delisting of “ABC Learning, HIH Insurance and One.Tel” from the ASX and recognition for receivership (Logan, Sumsion and Press 2015). Moreover, the role of the auditors had been evident in terms of the depiction of the several types of the issues which are seen to be associated to signing off the financial reports, thereby suggesting the need for recasting the profits and all the companies. (Newberry and Brennan 2013). The significant areas of the problems are further seen to be depicted in terms of the failure of the company to abide by the corporate governance as stated by the ASX.
The liability problems associated to “ABC Learning Center” in terms of liabilities depicted to be associated to the delay in “debt repayments” to overwhelm the company. Moreover, the auditors were unsuccessful to sign off on the financial reports citing “the need to recast previous year’s reported profits”. Ernst & Young, the external auditor of “ABC Learning Center” took a differentiated tactic from the “Pitcher Partners”, who was able to agree on the initial understandings reviewed by the management team of the company. It has been further discerned that the “management team” of the company was not able to earn a significant portion of the profit due to the failure of the auditors in recognising the inherent risk which was related to the valuation of the total assets and liabilities. The aftermath of the collapse of HIH insurance led to a total debt outstanding of $100 million. This quickly escalated to $200 million, and then $300 million in the subsequent months of liquidation. Although the total amount of liability for HIH Insurance was never announced, it is projected that the company lost additional “$ 800 million over the six months to 31 December 2000”. The most significant creditor for One.Tel has been depicted as Packer and Murdoch family who funded a credit of $280 million on March 2000. In addition to this, several types of other “Australian investors provided $340 million in funding”. Based on the financial report published on March 2000, One.Tel incurred a loss of $291 million and share price plummeted to below $1 (Miller and Orchard 2014).
Conclusion
The main findings as per Reasons to the liquidation of ABC Learning Center is depicted with debt reimbursements to overwhelm the company. Moreover, the “auditors” then not successful in signing off financial reports, thereby failure of the company to recast the previous year’s reported profit. It has been also discerned that the company entered into voluntary bankruptcy in 2008, which was further taken over by “Goodstart Limited in December 2009”. On the other hand, One. Tel’s IT strategy needed major upgrade and the company policy was not suitable for the later ambitions. Most importantly, it has been depicted that apart from IT failure the company also suffered from maintaining business ethos. The failure of HIH insurance is depicted with the liquidators encountering more than $ 5.3 Billion in losses. The company was forced into liquidation due to several instances of mismanagement. The strategy team of the company failed to identify the long-term strategy and only focused on opportunistically. In addition to this, the sales of the company were not enough to run the operating expenses. There had been multiple cases of outright fraud and the accountants of the company are also responsible for such a failure. “ABC Learning, HIH Insurance and One.Tel” is associated to the loss pertaining to the ongoing customers/service takers and responsible for breaching the “APES 110 Code of Ethics for Professional Accountants (Code) issued by the Accounting Professional and Ethical Standards Board (APESB)”.
References
Brennan, D., 2014. The business of care: Australia’s experiment with the marketisation of childcare. Australian Public Policy: Progressive Ideas the Neoliberal Ascendency, 151-167.
Brown, C. A., and Davis, K. T., 2015. The sub-prime crisis down under.
Callcut, R. A., Cripps, M. W., Nelson, M. F., Conroy, A. S., Robinson, B. B., and Cohen, M. J., 2016. The massive transfusion score as a decision aid for resuscitation: learning when to turn the massive transfusion protocol on and off. Journal of trauma and acute care surgery, 80(3), 450-456.
Gallagher, A., 2017. Growing pains? Change in the New Zealand childcare market 2006–2016. New Zealand Geographer.
George, T. P., 2015. Making an impact with service learning. Nursing2016, 45(12), 21-24.
Hessian, K., 2014. Rise of the new corporates. Rattler (Sydney), (110), 10.
Howard, C., 2015. Happy birthday kindergarten. Rattler (Sydney), (114), 6.
Klein, M. D., and Li, S. T. T., 2016. Building on the Shoulders of Giants: A Model for Developing Medical Education Scholarship Using I-PASS. Academic pediatrics, 16(6), 499-500.
Logan, H., Sumsion, J., and Press, F., 2015. The Council of Australian Government Reforms [2007–2013]: a critical juncture in Australian early childhood education and care (ECEC) policy?. International Journal of Child Care and Education Policy, 9(1), 1-16.
Miller, C., and Orchard, L., 2014. On escaping neoliberalism: concluding reflections. Australian public policy: Progressive ideas in the neoliberal ascendency, 351.
Newberry, S., and Brennan, D., 2013. The marketisation of early childhood education and care (ECEC) in Australia: A structured response. Financial Accountability & Management, 29(3), 227-245.
Nyland, B., and Ng, J., 2016. International perspectives on early childhood curriculum changes in Singapore and Australia. European Early Childhood Education Research Journal, 24(3), 465-476.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download