... Executive Summary In this assignment Introduction The main purpose of this assignment is critical analysis the determinants and consequences of management approach to segment reporting. Entities are typically involved in different activities and operate across dispersed locations. The current accounting standard AASB 8, adopts a management approach to segment reporting. Operating Segments is primarily a disclosure standard and is particularly relevant for large organisations that operate in different geographic locations and in diverse business. Paragraph 1 of AASB 8 sets out the core principle: “An entity shall disclose information to enable users of its financial statements to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates.” (Australian Accounting Standards Board 2010) 1. Differences between AASB 8 and the old accounting standards on segment reporting AASB 8 ‘Operating Segments’ was required to be adhered to for the reporting period starting on or after 1 January 2009. This standard is typically shown as a management approach to segment reporting, replacing the old accounting standard AASB 114 which was more of an industry standard (Harmer, 2007). The source of the statistics used in compliance with AASB 8 are gathered for the purpose for internal management decisions, hence the reason why it is viewed as a management approach. The old approach differs in a sense that it...
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...REPORT RE: RECENT ACCOUNTING AND CORPORATE GOVERNANCE SCANDALS Contents INTRODUCTION: 3 CORPORATE GOVERNANCE 5 CORPORATE GOVERNANCE IN IRELAND 5 RESPONSE FROM REGULATORS TO THE MOST RECENT SCANDALS IN BANKING SECTOR 7 US CORPORATE GOVERNANCE at a time of Tyco scandal 8 RESPONSE FROM THE REGULATORS -SARBANES-OXLEY ACT 2002 9 AUDIT 10 EXTERNAL AUDIT 10 INTERNAL AUDIT 11 INTRODUCTION TO ANGLO IRISH BANK 12 The Scandals 12 Loans to Sean Fitzpatrick 13 Irish Life and Permanent Depositing Funds 14 Corporate Governance Situation of Anglo 16 Ernst & Young – External Auditor 17 Impact on Shareholders & The Public 18 Company Law, Financial Regulator, Accounting Standards IFRS and GAAP 19 TYCO INTERNATIONAL 20 DETAILS OF TYCO’S SCANDAL 21 ACCOUNTING ISSUES IDENTIFIED 22 THE CORPORATE GOVERNANCE WEAKNESSES AT TYCO 22 PERFORMANCE OF EXTERNAL AUDITORS 23 CONCLUSION 27 The Main Reasons for The Scandals 27 Steps taken afterwards-will they prevent similar events happening in the future? 33 END REFLECTION 36 Bibliography: 37 Appendices: 41 INTRODUCTION: Accounting and corporate governance scandals have been a growing problem in the recent years. Many believe that the blame for those scandals should be borne on two groups of people. Those responsible for managing a company and those whose duty is to provide assurance on the accounts prepared by the directors (auditors), both of whom failed to perform their jobs adequately...
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...Introduction Corporate governance could be defined as the system of regulating and overseeing corporate conduct and of balancing the interests of all internal stakeholders and other parties which are external stakeholders, governments and local communities who can be affected by the corporation's conduct, in order to ensure responsible behavior by corporation and to achieve the maximum level of efficiency and profitability for a corporation. (Jean, Anil and Mirko 2011, pp.10). Therefore, the corporate governance framework consists of explicit and implicit contracts between the company and the stakeholders for distribution of responsibilities, rights, and rewards; the procedures for reconciling the sometimes conflicting interests of stakeholders in accordance with their duties, privileges, and roles; and procedures for proper supervision, control, and information-flows to serve as a system of checks-and-balances. (businessdictionary.com 2012) Starbucks Company and British Petroleum Plc are chosen to explain and discuss on good corporate governance; meanwhile Enron is chosen to explain and discuss on bad corporate governance. Since Starbucks and Enron are incorporated in the United States of America (USA), therefore these two companies will be used to compare how they governance their company under principle of corporate governance of America. Corporate Governance in United States (US) In United States, after have various corporate scandals, corporate governance has rising...
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...The Role of Accounting Information in Assessing Corporate Performance in Nigeria. May,2012. Table of content. Abstract. Section 1: Introduction 1.1 Background to study 1.2 Problem Analysis 1.3 Aims and Objectives of the study 1.4 Significance of the study. 1.5 Research Questions 1.6 Hypothesis 1.7 Scope and limitation of the study. Section 2: Literature Review 2.1 General Review of Relevant Literature. 2.2 Theoretical framework 2.3 Conceptual Scheme/ Model Section 3: Methodology 3.1 Data and Statistical Tools for Analysis. Section 4: Presentation of Data Analysis Section 5: Discussion of Findings Section 6: Summary and Conclusions References. ABSTRACT. This study is an attempt to examine the role of accounting information on corporate performance. We critically examine the relevant literature that investigates the role of financial accounting information as the direct and indirect use of externally reported financial accounting data in performance assessment. Specifically, we focus on the role of accounting data in prevalent control mechanisms (primarily in executive compensation contracts) and the underlying causes that led to the shift of contracts towards option awards. Accounting information are among the most effective tools to reduce the incidences of corruption, from its supply side, because they promote values such as accountability, transparency, fairness and responsibility...
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...Hongtao Lu 41586561 Financial Statement Project of Corporate Accounting Individual report of Decmil Group Ltd Hongtao Lu (41586561) 16th April 2014 ACCT7104 Corporate Accounting Individual Financial Statement Project 1 Hongtao Lu 41586561 1. Introduction The purpose of this report is to identify the significant elements of changes of Australian accounting standards in the fields of Segment Reporting and Joint Arrangements/Ventures in last five year. The report will examine accounting methods used in Decmil Group Limited’s annual report in order to assess the compliance level of the financial statements. 2. For Segment reporting 2.1. Significant Elements of Changes in the Field of Segment Reporting From the old to the new consolidation suite, for segment reporting, significant changes of accounting standard were mainly from AASB 114 segment reporting to AASB 8 operating segment. The latest version AASB 114 was applied to reporting periods beginning on or after 1st July 2008 but before 1st January 2009 (AASB 2008, p.1). Its replacement AASB 8 started from 1st Jan 2009, and early adoption was acceptable (AASB 2010, p.1). Firstly, the most significant change is the identification method of operating segments. AASB 8 (AASB 2010, p.10) requires reporting entity to identify reporting segments whose performance is regularly examined by CODM for decision making purpose of allocating resources. In contrast, AASB 114 required that segments should be defined by...
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...BAC 3634 Corporate Accounting I Trimester 1 2015/2016 Group Assignment Topic: IFRS & IAS and The Practical Disclosure In Fraser & Neave Holdings Berhad Prepared for: Mdm. Haslin Binti Johari Prepared by: No. | Name | ID | 1 | Tan Se Man | 1102703355 | 2 | Wong Chin Ang | 1102703373 | 3 | Gan Hui Leng | 1102703420 | 4 | Neo Zi Sin | 1102703513 | 5 | Cheah Zhi Qin | 1112701231 | Table of Contents List of Diagrams I 1.0 Introduction 1 1.1 Economics of F&N Holdings Berhad 1 2.0 The Users of Financial Statements and Their Information Needs 4 3.0 Discussion of Standards Related to Consolidation and its Actual Presentation 6 4.0 Conclusion 14 Reference 16 List of Diagrams Exhibit 1 Group Structure & Summary of Ownership Interests in Subsidiary Exhibit 2(a) Disclosure of Ownership Interest in Subsidiaries Exhibit 2(b) Disclosure of Ownership Interest in Subsidiaries Exhibit 3 Consolidated and Separate SOPL Exhibit 4 Consolidated and Separate Statements of Comprehensive Income Exhibit 5(a) Consolidated SOFP Exhibit 5(b) Separate SOFP Exhibit 6 Consolidated SOCIE Exhibit 7 Separate SOCIE Exhibit 8 Consolidated and Separate SOCF Exhibit 9 Disclosure about Reporting Date Exhibit 10 Acquisition Method of Business Combinations Exhibit 11 Comparisons of Investment in Subsidiaries of 2 years Exhibit 12 Goodwill as Intangible Assets and Computations Exhibit 13(a) Goodwill Recognized...
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...1.1. TYPE OF SECURITIES SOLD * Offer For Sale The Offer for Sale comprises of 14,660,000 Heng Huat Shares representing approximately 7.12% of the Group’s enlarged issued and paid-up share capital which will be offered by the Offeror to selected investors. * Public Issue The Public Issue comprises of 46,500,000 Public Issue Shares at the IPO Price of RM 0.45 each which represents approximately 22.59% of the Group’s enlarged issued and paid-up share capital. In particular, the IPO of 46,500,000 Public Issue Shares comprises of: 1. Public Tranche : 7,000,000 Public Issue Shares will be made available for subscription by the Malaysian Public 2. Pink Form Tranche : 5,000,000 Public Issue Shares will be made available for subscription by eligible employees and persons who have contributed to the success of the Group 3. Placement Tranche : 12,200,000 Public Issue Shares have been reserved for placement to selected investors 4. MITI Tranche : 22,300,000 Public Issue Shares have been reserved for Bumiputera investors approved by the Ministry of International Trade and Industry (MITI) The Public Issue Shares at an offer or IPO price of RM 0.45 per share is payable in full upon application. The table below illustrates the summary of the allocation of Public Issue Shares. No | Categories | Number Of Shares | Enlarged Share Capital Upon Listing (%) | 1 | Public Tranche | 7,000,000 | 3.40 | 2 | Pink Form Tranche | 5,000,000 | 2.43 | 3 | Placement Tranche...
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...PROJECT 13-10 F5150N Managerial Accounting Corporate Valuation The financial statements of Lioi Steel Fabricators are shown below—both the actual results for 2010 and the projections for 2011. Free cash flow is expected to grow at a 6% rate after 2011. The weighted average cost of capital is 11%. a. If operating capital as of 12/31/2010 is $502.2 million, what is the free cash flow for 12/31/2011? b. What is the horizon value as of 12/31/2011? c. What is the value of operations as of 12/31/2010? d. What is the total value of the company as of 12/31/2010? e. What is the intrinsic price per share for 12/31/2010? Income Statements for the Year Ending December 31 (Millions of Dollars Except for Per Share Data) Actual 2010 Projected 2011 Net sales 500.00 530.00 after 2011 Costs (except depreciation) 360.00 381.60 FCF g rate 6% Depreciation 37.5 39.8 WACC 11% Total operating costs 397.50 421.40 EBIT 102.50 108.60 Less interest 13.90 16.00 Earnings before taxes 88.60 92.60 Taxes (40%) 35.40 37.00 Net income before preferred dividends 53.20 55.60 Preferred dividends 6 7.4 N I available for common dividends 47.20 48.20 Common dividends 40.80 29.70 Addition to retained earnings 6.4 18.5 Number of shares 10 10 Dividends per share 4.08 2.97 Balance Sheets for December 31 (Millions of Dollars) Actual 2010 Projected 2011 ...
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...Assignment 4. Required: 1. Evaluate Breezy’s Working Capital Management in 2002 and 2003. Do you consider there to be a deficiency or excess in Breezy’s working capital levels relative to the industry? 2. Calculate Days Inventory, Days Receivable and Days Payable for 2002 and 2003 (using average balance sheet amounts where relevant). What is the funding gap for Breezy in each of these periods? What does this mean in terms of Breezy’s growth strategy? 3. How can Breezy improve its working capital management? Make recommendations in relation to specific short-term assets and liabilities. Are there any risks/downsides to your recommendations? 4. To convince Brian about flaws (if any) in Breezy’s working capital management, a bottom-line impact needs to be demonstrated. Is it possible to attribute an approximate cost to the deficiency or excess as calculated in (1)? What is this approximate cost? 1. According to the formula of NWC we have it: | 2002 | 2003 | NWC | 390.000,00 | 755.000,00 | Current ratio | 3,79 | 4,28 | As according to the balance sheet definition of working capital (current assets minus current liabilities), NWC is an indication of the firm’s current solvency in repaying its creditors. So in 2002 and 2003 the company had NWC of 390.000,00 and 755.000,000 respectively. If we compare current ratios of the company with industry average numbers, we have quite good situation here. The industry...
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...Corporate Financial Accounting and Reporting Tim Sutton second edition Corporate Financial Accounting and Reporting We work with leading authors to develop the strongest educational materials in business and finance, bringing cutting-edge thinking and best learning practice to a global market. Under a range of well-known imprints, including Financial Times Prentice Hall, we craft high quality print and electronic publications which help readers to understand and apply their content, whether studying or at work. To find out more about the complete range of our publishing please visit us on the World Wide Web at: www.pearsoned.co.uk Corporate Financial Accounting and Reporting Second Edition Tim Sutton Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the world Visit us on the World Wide Web at: www.pearsoned.co.uk First published 2000 Second edition published 2004 © Financial Times Management 2000 © Pearson Education Limited 2004 The right of Timothy G. Sutton to be identified as author of this work has been asserted by him in accordance with the Copyright, Designs, and Patents Act 1988. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without either the prior written permission of the publisher or a licence permitting restricted copying in the United...
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...example, Shaw Communications Inc. reported total assets of $8.9 billion in 2009. Of this amount, only $2.5 billion is financed through shareholders' equity, with the balance, $6.4 billion, provided by debt in various forms. A sizeable portion of the debt is unearned revenue and deposits ($0.8 billion, or 9% of total assets) and long-term debt is 35% of total assets. Interest expense is reported at $237 million, eating up a significant portion of the reported $956 million in operating earnings. Appropriate measurement of these amounts is critical. This chapter reviews common liabilities, including both financial and non-financial liabilities. Technical measurement issues are reviewed in the context of bond liabilities. Chapter 13 will discuss accounting for share equity. Then, in Chapter 14, coverage returns to debt arrangements, those that have some attributes of debt and some attributes of...
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...[pic] SOUND FINANCIAL REPORTING IS A GOOD THING FOR BRINGING CONFIDENCE BACK TO THE CORPORATE WORLD Submitted By: Ahmed Shafiul Huq 801414063 Principle of Accounting (EIB505) Section: B Executive Master of Business Administration Submitted To: Mr. Mohammad Rakib Uddin Bhuiyan Assistant Professor Department of International Business Faculty of Business Studies EXECUTIVE SUMMARY A company’s financial reporting amalgamates important documents to create an effective spreadsheet to simplify the financial data of an organization. It captures much of the information that organizations prepare, publish, and use. Financial reporting plays an integral role in the capital markets and economic stability and growth, and efforts to enhance its quality are vital. A Sound Financial Reporting provides us relevant, meaningful, reliable, accurate and comprehensive reporting of management stewardship whether in the form of numbers or other operating data. It is increasingly important for businesses to be financially transparent and for governments to establish a sound regulatory environment for corporate financial reporting. Sound financial reporting can benefit business by some ways just like valuing business, easy to identify...
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...Length Research Paper Management accounting: An instrument for implementing effective corporate governance Mayanja MK and Van der Poll HM Department of Management Accounting, Unisa, Pretoria, 0003 South Africa. Accepted 28 September, 2011 Management accounting is not given sufficient emphasis, at the board level, as a provider of timely and relevant information to facilitate the execution of good corporate governance. Without management accounting information corporations in Botswana may find it difficult to create sustainable corporate governance. A qualitative approach using questionnaires and interviews were used to establish the extent to which management accounting tools are applied by the directors in the target companies. The research was carried out amongst listed companies on the stock exchange and the parastatal companies in Botswana. Furthermore documentation, for instance annual financial statements from the companies were reviewed. Most directors in the companies do not fully utilise the tools of management accounting in decision making. Management accountants have also failed to provide the relevant information to the board. To execute their duties efficiently, directors may need to call for the management accounting reports from the senior management level up to the board level and regularly use these reports to facilitate decision making. Key words: Management accounting, corporate governance. INTRODUCTION Management accounting, which was traditionally intended...
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...Journal II: Week 6 to Week 12 Corporate governance is ‘the system by which business corporations are directed and controlled’ (Mucciarone 2012). Milton Friedman argued that “corporate governance is to conduct the business in accordance with the owner or shareholders’ desires, which generally will be to make as much money as possible while conforming to the basic rules of the society embodied in law and local customs (Mucciarone 2012). I’ve learnt now that corporate governance is an integral part of our lives. This was evident during the collapses of Enron and WorldCom in the United States and the collapse of ABC learning in Australia. ABC Learning was a listed company on the Australian Securities Exchange, with market shares worth A$2.5million. In 2008, the company went into administrative receivership and was overwhelmed with massive debts. According to (Kruger 2009), it came to light that ABC Learning employed methods of financial reporting designed to artificially create apparent shareholder value, when, in fact, that shareholder value associated with the child-care licences (91 per cent of net assets) is based entirely on the future net cash flows of the company. ABC Learning’s profits increased rapidly through acquisitions, which should have raised questions about the underlying valuation of assets it acquired - especially given that 70 per cent of its assets were intangibles (Kruger 2009). Dr Philip Ross, the head of the school of accounting at the University of Western...
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...Introduction Good corporate governance (GCG) in a corporate set up leads to maximize the value of the shareholders legally, ethically and on a sustainable basis, while ensuring equity and transparency to every stakeholder - the company's customers, employees, investors, vendors-partners, the government of the land and the community (Murthy, 2006). GCG is a must for ensuring the required values to different stakeholder groups. It enhances the performance of corporations, by creating an environment that motivates managers to maximize returns on investment, enhance operational efficiency and ensure long-term productivity growth. Consequently, such corporations attract the best talent on a global basis. It also ensures the conformance of corporations with the interests of investors and society, by creating fairness, transparency and accountability in business activities among employees, management and the board (Oman, 2001). Again, GCG increase public confidence in a corporation, and lowers the cost of capital for investment. According to a McKinsey study (2002), over 60% of investors cite Good Governance practices in a corporation as a key factor in their investment decisions. Today, GG becomes a slogan and a pride. Here, we can uses accounting as a mean for establishing and retaining corporate governance. Accounting is a process of compiling information for reporting the internal affairs of any entity to different stakeholders at the end of a certain interval. It is defined as...
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