Account -Q43 Online Services

 

Assessment Details
Qualification code	FNS60215			Qualification Name	Advanced Diploma  of Accounting
Unit Code	FNSACC604			Unit  Name	Monitor Corporate Governance Activities
Assessment Type			Project/ Presentation		Term		3		Due Date
Trainer / Assessor’s Details
Full Name:							Date of Submission
Student De		tails
Student Name		Anmol karki				Student ID		201510438

 

Instructions to the Candidates

Pre Requirement for this task   Student must Review   •               Lesson materials provided in class •               Examples used in lessons. Instructions to Students    •               Please complete assessment task within the time frame given •               You must attempt all the requirements that are addressed within this assessment task. •               Copying or any kind of cheating is absolutely not permitted, if someone is found cheating or copying, will be debarred from the assessment and a disciplinary proceeding would begin. •               This assessment covers the following Performance Criteria PC’s Covered: 1.1, 2.1,2.2, 3.2, 3.3, 3.4, 4.1, 4.3

 

Assessment Description

 
This unit describes the skills and knowledge required to research corporate governance reporting trends, examine corporate governance standards and practices, and review compliance to develop and implement processes and procedures for meeting corporate governance obligations.

 

Assessment Instructions

 
On the following pages you will find the various types of information.

Students are to read the information provided in the questions prior to answering the questions. Students will be allocated time to complete this assessment in class under the supervision of the Trainer/ Assessor.

If you are not sure about any aspect of this assessment or would like to discuss your particular

needs, please speak to your assessor. Should you have a questions notify the Trainer/Assessor. The Trainer/Assessor will attend to you as soon as possible.

You must successfully complete all the questions included in this assessment tool.

 

 

 

Key Requirements

 

This assessment consists of two parts; Part-A (Case study) & Part-B (Short Questions & Answers set) and Part-C (Presentation). Please answer all the questions in the spaces provided or as instructed by your Trainer/Assessor during the allocated computer labs. You

Trainer/Assessor will advise you specifically when to work on your demonstration questions.

 

These task / exercises form part of your assessment for this unit; therefore it is essential that you complete these exercises.

 

When you complete each task / exercise, these need to be handed into the trainer to be checked.

 

Unless otherwise stated, the following group structure is relevant to all questions in this assessment.

 

PART – A

 

Case Study Question 1: on Business Planning Structure

 

You have the task of advising clients as an accountant. Amongst your clients’ is a family – with a mother and father both aged 50 (and with considerable wealth), and 4 children, aged 21, 18, 17 and 10. The parents wish to involve their children in their next business venture. The parents anticipate contributing $2 million of their own capital and having the venture borrow a further $2 million. The parents seek your advice as to how the venture should be structured.
 
The investments under considerations are
 
♦ a retail business

♦ a farm

♦ a speculative mining venture

♦ a long term investment portfolio

Required

 

1. Examine the relative advantages and disadvantages of the structures available in law for acquiring and conducting these proposed investments.

 

A retail business

Advantages
 

1. Owner of the business, can hire the employee and have his own profit or loss.
2. Can create the atmosphere and culture of business as you want
3. Limited liability

 
Disadvantages
 

1. Total responsibility towards own self.
2. Lots of expenses
3. Loads of competition

A farm
 
Advantages

 
1. Tax exemption
2. Can apply for government grants.
3. Can land to other farmers and share profit
4. Crop sharing and take a portion of dividend

 
Disadvantages
 

1. Invest heavily for protecting land from encroachers.
2. Profit is dependent in the quality of crops grown
3. Need to deal with the natural climate.

 
speculative mining venture
 
Advantages

 
1. It is only temporary arrangement among parties
2. Can assess to additional resources
3. Share risks and cost
4. Increasing opportunities of business includes financial goals.

 
Disadvantages
 

• Dealing with arrangements, cultures and management styles among the parties
• Either parties making poor tactical decisions may affect the desired outcome of the project
• Lack of commitment to the project by any of the parties.

 
a long term investment portfolio
 
advantages
 

1. Risk reduction
2. Assets choice
3. Lower maintenance

 
Disadvantages
 

1. Missed wind fall
2. Increase exposure

 

 
2. Issues to examine will include the relative complexity, flexibility, aspects of liability and suitability for financing purposes for each particular structure contemplated.

 

investment	complexity	flexibility	liability	suitability for financing purposes
a retail business	high	high	limited	suitable for local purpose for not earning high profit
a farm	high	low	limited	suitable
a speculative mining venture	low	low	unlimited	suitable when good partnership among each partner
a long term investment portfolio	low	high	unlimited	suitable for slowly gaining income for long term

 

 

Case Study Question2: Directors duties – to whom they owed? Corporate social responsibility

 

The Commonwealth government had written to the Corporations and Markets Advisory Committee (CAMAC) in March 2005 to consider and advice on the following issue: “… the extent to which the duties of directors under the Corporations Act 2001 (Cth.) should include … explicit obligations to take account of the interests of certain classes of Stakeholders other than shareholders. Under both the Corporations Act and the common law, directors have a duty to act in the best interests of the corporation …
 
In modern society, a great deal of business and other activities are conducted by corporate entities. Given the broad economic, social and environmental impact of these activities, there is an understandable interest in the legal framework in which corporations make decisions. A question that has been raised from time to time is whether the current legal framework allows corporate decision makers to take appropriate account of the interests of persons other than shareholders.”

 

With reference to the above quote

 

1. Which stakeholders can currently be considered to be part of “the company” for the purposes of the director’s duty to act in the best interests of the corporation? Discuss with reference to relevant precedents.

 
Primary stake holder (owners, investor, stoke holder)can currently be considered to be part of “the company” for the purposes of the director’s duty to act in the best interests of the corporation. Primary stakeholder invest their money as a capital, so they ill always think for the betterment of the company but where as director are just appointed, they may not always think in behalf of company.

 

2. Should directors duties, and corporate responsibilities, be extended to a wider group of stakeholders? What are the lessons from the James Hardie experience?

 
Yes director’s duties, and corporate responsibilities, be extended to a wider group of stakeholders.
 
The lessons from the James Hardie experience:
 
“”Directors are not able to rely upon the advice of management under section 189 of the Corporations Act in place of their own examination of a matter where the matter falls within the board’s responsibilities (which include considering strategic matters and approving significant disclosures to the market).
 
With regard to company announcements, the wording will affect the extent to which a director may rely upon external advice.  The more “emphatic” an announcement’s wording, the less room a director has to say that it was approved in reliance upon the opinion of someone else.””

 

 

 

Case Study Question 3
 

You are a consultant to the Executive Management Committee of Heavy Metal Incorporated (HMI), a large, publicly traded mineral exploration and development corporation with mines on several continents. Due to rising commodity prices, HMI has recently returned to profitability after several lean years including one year of substantial losses due to a mine explosion which resulted in loss of life and closure of the affected mine for six months.

 
You can read more about our case study assignment help services here.
 

 

Currently, there are significant strategic issues facing two of HMI’s other mines.

 

Mine 1. The workers at HMI’s mine in eastern South Australia have been on strike for four months, causing significant harm to the affected workers and local community. The mine and related facilities are not efficient, the wage base of the striking workers is at the high end for the industry and local corporate and employment taxes are also high.

 

During the strike, the mine has been earning significant revenue from its own hydro-electric facility as a result of diverting power that it would otherwise use for its operations, into the provincial electrical grid. These factors have combined to produce a profit for HMI of approximately $1 million per month since the strike started. A significant portion of these earnings is going into the executive bonus pool for distribution to senior management at year-end.
 
Recently some incidents of violence and vandalism have occurred on the picket lines despite injunctions obtained by the mine against the union Political pressure to settle the strike and return to normal operations is increasing.
 
Mine 2. This mine in also in South Australia and is nearing the end of its productive life due to exhaustion of the mineral body. The mine will close within 12 months with substantial loss of employment for a community that has become heavily dependent on the mine for economic benefits over the previous 15 years. In addition, there are significant environmental issues as a result of the open pit mine and adjacent tailings pond leaching into the surrounding water basin. HMI has budgeted $10 million in mine closure and remediation expenses to deal with these issues.

 

Complying with applicable mining and environmental laws in the jurisdiction would result in costs of $15 million to repair the site and environmental damage although the mine manager has been told that spending $5 million on mine closure combined with payment to a key political figure of $1 million would ensure that there were no legal actions taken against your corporation.
 
Independent consultants have advised that to close and remediate the mine in accordance with accepted international mining standards will cost approximately $20 million. Any expenditures over the $10 million budgeted for this expense will result in a financial loss for HMI and decline in share price which will substantially impact the value of the options portion of your compensation package.
 
The board of directors of HMI is generally aware of the situation at each of the mines and has requested a report and recommendations from management. The board has scheduled a meeting to hear and discuss your proposals for dealing with each of them.

 

Required

Prepare a memorandum to the board of directors of HMI outlining and supporting your recommended course of action for addressing the issues at the Mines 1 and 2.

 

The memo should include the following
 

1. Identify the corporate governance issues at HMI’s mines.
2. What measures are required to eliminate the shortcomings you have identified in (a)? Ensure you specify the requisite corporate governance requirements that must be adhered to.
3. Identify the management processes that can support corporate governance compliance.
4. Suggest ways to monitor compliance with corporate governance requirements.
5. Recommend the philosophy and approach of Heavy Metal Inc. to the shareholder paramountcy vs. corporate social responsibility debate and make recommendations to the board of directors on both of the above situations under separate headings.
6. What criteria would you use to establish corporate guidance failure?

 

 

PART – B Short Questions & Answers set 1: on Alternative business vehicles and Types of Companies

 

Q1.What factors are taken into account in determining whether or not a partnership exists?

 

Q2. What is “joint liability” and how does it differ from “joint and several” liability in a partnership?

 

Q3. How can a retiring partner avoid future liability?

 

Q4. Why is agency an important concept in partnership law?

 

Q5.Explain what a limited partnership is?

 

Q6.Identify four major differences between a public and proprietary company;

 

Q7.What requirements must a proprietary company satisfy to be classified as a small Proprietary company?

 

Q8.What types of companies may be registered under the Corporations Act?

 

Short Questions & Answers set 2: on Separate Legal Personality and Lifting the Corporate Veil

 

1. What does the expression “separate legal personality” mean?

 

2. What are the consequences of treating the company as a separate legal entity?

 

3. In what circumstances have courts pierced the corporate veil?

 

Short Questions & Answers set 3: on the Duties of Directors and Officers of the Corporation

 

1. Who enforces a breach of director’s fiduciary duties?

 

2. What are the company’s civil remedies for a director’s breach of common law duties?

 

3. Who enforces a breach of director’s duties under the Corporations Act?

 

4. Can directors be criminally liable under the Corporations Act?

 

 
PART – C

Prepare a presentation on one of the following topics. Maximum number of slides for the presentation should not exceed 20 slides.

 
Product Code- Account -Q43
 
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