1. List and briefly describe the three general areas of responsibility for a chief financial officer (CFO) of a selected non-financial company which is listed on Australian Stock Exchange (ASX). Explain how those responsibilities can affect ultimate objective of the company. The name of company you choose should start with the first letter of your first, last or middle name. (1500 words)
2. If the efficient-market hypothesis is true, the pension fund manager might as well select a portfolio with a pin.” Explain why this is not the case. (500 words).
This report is about the responsibilities of the Chief Financial Officer of the company Technology one Limited. The report has discuss about the roles and the function of the Chief Financial Officer and how that role affects the objectives of the Technology one Limited. There is an details about the company and the approaches that the company adopts, and then the responsibilities of the CFO. This report has also discuss about the efficient market hypothesis and also the roles of the fund manager.
Technology one Ltd.
It is the biggest enterprise of an Australia which is a software company and has located in 6 countries. This company actually provides the solution for the transformation of business and creates an easy life for the customers. Technology one Ltd. is that company which offers the best software which can be easily used by the customers. More than 1000 corporations, department of the government and authorities of the statutory body have operated by the software of the Technology one Ltd.
The vision of this company is to create transformation for the business and make the life so easy for the customers. This company made best products and delivered that products and services to the customers for making their life easy.
Approaches of the company
Vision of the enterprise
They actually experienced about the single power as well as the integral solution of the enterprise and made it on an advanced single stage with the view of logical and feel.
They actually deal and get engaged with the various markets and provide solutions to customers and solutions are preconfigured with the practice and implement the streamline and decreases time, cost and risk.
The power of one
In the case of investment in the company of Technology one and in a solutions, there is an advantage for being in a direct relationship with the company and with each of the steps along with the company. They are not using the partners for implementation as well as resellers of the value added. This company is fully responsible for building, marketing, sales, implementations, supporting and running the solution of an enterprise which provides to the customers for their success and guaranteed for the long term.
The power of evaluation
They have adequate investment in research & development every year that means they provide the strong and the continuous competitive advantage to the customers with the help of the solution of an enterprise and adopts and develop by the accepting the new technology, concepts and do innovative things.
Simplicity, not complexity
As per the expectations of customers as well as their preference taste, the software accepts the solutions and delivered to customers which are absolutely easy to use without any complications (Technology one Ltd, 2016).
Technology one Ltd. which is the leading provider of the software solution in Australia has made the announcement that Mr. Edward Chung is now the operating officer for the corporate shared services. For the growth of finance, accounting, administration, legal, human resources and other functions of the corporations which are linked with the development of the business of Technology one Ltd, the new post has made for this growth and development.
In the earlier times, the chief financial officer of Queensland Rail, Mr. Edward have the experienced about this professions and leads to a large number of teams to deliver the function of corporate support which is the requirement for the successful organizations. There is the introduction of the new role for the operating officer in order to create the support for the business model of products at the house of the company. Technology one has just organized its business in a different way to focus on the products, so that each of the products will be best in its class. The model of the new business are concerned about the management of each product according to the division, focuses on the requirement of research and development, sales, consulting and support for the leader of the market along with the common support of the corporations which has been provide to various products.
Edward have the responsibility to deliver the functions of the shared corporate which involves the finance, accounting, legal, human resources and the function of the administration for the business of the technology one. MR. Edward play role for the development of the commercial framework to deliver the processes which have to be effective, automated, low cost and complementary for the expansions of the business.
Mr. Edward has just played the role at technology one as the position has responsibility for playing his role in the company. Mr. Edward has just effected from the entrepreneurial spirit and also from the business model of the company, planning about growth and the record of the twenty years about its success because it’s the leading enterprise of the software companies in Australia.
Mr. Edward has experienced and a sharp executive and performs its responsibility for the company, and he is the best asset for the company. His appearance in the company will change the business for the product model of the house which will create the position of the Technology one in the market as the leader for the products in enterprise and provide services to the customers.
Mr. Edward has the responsibility for operating officers which leads to the consulting, research and development, sales and marketing and the development areas of the business for the company. This month, the technology one has created the record of profit which is increased by 22% and become $19.8 million (Technology one Ltd, 2016).
Mr. Edward also has various responsibilities which have to perform by him. These responsibilities are:
CFO has to take care of the position of the cash flow of the company and should recognize the sources and the uses of the cash and maintenance of the funds, security, and other valuable things. Mr. Edward can also make or adopt the accounting policies and procedures for the collection and the credit, purchasing, bills payment and other obligations of the finance.
It is also the responsibility of the CFO for understanding the liabilities of the company. The legal contracts, tax obligation, contingent liabilities, insurance and the expectations of the board of directors, all this have to take care by the CFO.
Company performance
Mr. Edward has to recognize the business model of the company in order to attract customers and converts the effective and efficient operation for the measurement of the performance. The CFO uses the tools such as balance sheet, income statement and ratio analysis of the financial statements to achieve the company objectives which are expected and the financial performance.
Department supervision
Mr. Edward is also responsible for the departments of the accounting, finance, human resource and information technology. He is also responsible for the accounting and financial functions of the company with the help of job description, policies, and procedures and methods.
Financial relationships
The CFO creates and maintains the relationship with communicating the investment bankers, financial analyst and shareholders coordinate with the presidents. The arrangements of the banking and agreements of the loan and maintain adequate sources of the funds or capital from the borrowings of the commercial banks and various lending institutions. They actually do the investment of the companies fund and stock plan option.
Finance or raising capital
CFO will create the executive programs for the requirements of the capital of the company which involves the obtaining of the debt and equity capital and the maintenance of the financial arrangements. He will prepare the plans about the business which will for the long term in the market for the maximization of the profit and take the alternatives for any problem regarding the financial requirements.
The CFO has to approve all the contractual agreements which are related to the financial obligations which include raw material, IT assets and services and other implementations regarding the promises of the financial resources.
Record control
The CFO also does the financial aspects of the transactions of the company which involves the bids of the real estates, contracts, and leases. They also cover the insurance coverage and sure to maintain the suitable financial records and to prepare the financial reports of the financial year as per the requirements. The CFO also ensures the compliance of the company and the financial regulations and standards such as Sarbanes-Oxley, IRS tax code, and the GAAP.
Shareholders Relations
CFO do the analysis of shareholders of the company which is related to the policies, procedures, and information which includes the reports which are annually as well as interim to the shareholders and the board of directors and give the suggestions to the presidents regarding review of the policies, procedures, or program whenever it is needed.
Budgeting and expense control
Budgets are the real estimation of the company which is about the investment, and it is also the responsibility of the CFO to take care the process of budgets, and the collection of the inputs is also done, and the comparison is done between the actual performance and the estimated budget. It is that procedures in which the CFO might fall from his responsibility and control over the budget (Bismanualz, 2016).
It is the theory of investment which means that it is not possible to beat the market as the efficiency of the stock market create the prices of the existing shares and give all the relevant information. As per the efficient market hypothesis, the trading of stock is done at its fair value on the stock exchange and provides an opportunity to the investors to either buy the stock at fair value or sell the stock at the high price. It is important for investors along with the financial managers to know the changes in the stock and its related information. It is concerned about the basic issues which is related to the finance that the reasons for changes in the price in the security market. It is also referred to the random walk theory (Mackinley, 2005).
Investors tried to recognize the securities which are undervalued and assumes that the prices of these securities will rise in the future and specifically the value of that stock which has the chances to rise as compared to others. Many investors think that their performance will be excellent and affects the market and break the records and create the new records in the market. But for this achievement they have to analyze the market and do the forecast and the methods of valuation for the decision of investment.
The efficient market hypothesis recommends that the profit earn from the stock movements is not easy. The price changes or fluctuates because of the information which is just arrived in the market. If the adjustments of the prices are made so fast without having any biased information, then it is called as efficient market, and that leads to the securities in which its current price disclose the availability of the information at the certain period. For the fall or rise in prices of the stock have no other reasons except this (NPRA, 2011).
The pension fund manager does the investment in the funds and the assets as per the provisions of the National Pension Act, 2008. The fund manager diversified the funds in different securities in order to maximize risk and acquired the best returns as per the investments. The maintenance of the books of accounts on the transactions has done by the pension fund manager.
The efficient market hypothesis is not implied about the selection of that portfolio which is done along with the pin because the manager has to sure about the diversification of the portfolio. It has to notice that the various stocks and its diversification may not be from the same industries. It must be taken care about the risk associated with the securities is suitable for the customers but in the case of the pension fund, the decision for the investments must be less risky (Betson, 2000).
References
Technology.one.Ltd. (2016).about us. retrieved from 6 September 2016 from
https://www.technologyonecorp.com/about-us
Technology.one.Ltd.(2016).technology one appoints new operating officer, corporate services.retrieved from 6 september 2016 from
https://www.technologyonecorp.com/about-us/media/news/articles/technologyone-appoints-new-operating-officer,-corporate-services
Bizmanualz.(2016).what are top 10 CFO responsibilities.retrieved on 6 september 2016 from
https://www.bizmanualz.com/be-a-better-boss/what-are-the-top-ten-cfo-responsibilities.html
Mackinley.C.(2005).market efficiency.
Betson.F.(2000).role of pension fund manager.
The. pension.regulators.(n.d).roles and responsibility.retrieved on 6 september 2016 from
https://www.thepensionsregulator.gov.uk/trustees/role-trustee.aspx
National.Pension.Regulatory.Authority.(2011).guidelines for pension fund managers.retrieved on 6 september 2016 from
https://npra.gov.gh/Registration/GUIDELINES-FOR-PENSION-FUND-MANAGERS.pdf
Pensions.allianze.trust.(2016).appoint pension fund managers, custodians and other service provider.retrieved on 6 september 2016 from https://www.pensionsalliancetrust.com/Function/appoint-pension-fund-managers-custodians-and-other-service-providers.html
Clarke.J.Jandik.T& Maldeker.G.(n.d).the efficient market hypothesis.
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