Write essay on factors that corporate collapse

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Reference no: EM131668821

Assignment -

On 4 January 2016, the value of shares in Dick Smith Holdings having fallen by more than 80% since they were listed on the ASX in December 2013. A halt in trading was requested. The following day, Dick Smith Holdings Limited (and associated entities) was placed into administration by its major creditors National Australia Bank (NAB) and HSBC Bank. Dick Smith Electronics, in its own company reports, attributed failure to cyclical factors specific to the company, namely unexpected weakness in sales and constraints on its ability to finance inventory investment. But market analysts have suggested that structural company-specific factors; in particular, poor corporate governance arrangements, low transparency in financial reporting and internal control system was also contributed to this failure - which is to some extent, auditor responsibly to assess.

In Australian Auditing standard, ASA 315, it requires that auditors must have good understanding of the entity and its environment, including the entity's internal control system, which includes, but not limited to:

(a) Relevant industry, regulatory, and other external factors and the applicable financial reporting framework. (Ref: ASA 315, Para. A25-A30)

(b) The nature of the entity, including: (i) its operations; (ii) its ownership and governance structures; (iii) the types of investments that the entity is making and plans to make, including investments in special-purpose entities; and (iv) the way that the entity is structured and how it is financed to enable the auditor to understand the classes of transactions, account balances, and disclosures to be expected in the financial report. (Ref: ASA 315, Para. A31-A35)

(c) The entity's selection and application of accounting policies, including the reasons for changes thereto. The auditor shall evaluate whether the entity's accounting policies are appropriate for its business and consistent with the applicable financial reporting framework and accounting policies used in the relevant industry. (Ref: Para. A36)

(d) The entity's objectives and strategies, and those related business risks that may result in risks of material misstatement. (Ref: ASA 315, Para. A37-A43)

(e) The measurement and review of the entity's financial performance. (Ref: ASA 315, Para. A44-A49)

Based on Dick Smith Electronics' published information, research articles and Auditing standard ASA 315, write down a short essay on the (i) factors that might have contributed to this corporate collapse and (ii) identify which of these factors should have been identified (if any) by the auditor.

Essay requirements:

  • The essay is to be written in the style of a formal (ie. academic) essay. For further information on formal essay writing please refer to: Fleet, W., Summer, J. & Smith, B. 2006, Communication Skills Handbook for Accounting, John Wiley & Sons Australia, Milton, Queensland.
  • You can use quality/credible journal articles to support your understanding. The quality of journals can be assessed by reference to the Australian Council of Business Deans (ABDC) 2016 journal rankings (A*, A, B, C in order of declining quality) in the Assessment folder in Blackboard.
  • You MUST use the Harvard system of referencing. For further information on the Harvard system of referencing please refer to: Fleet, W., Summer, J. & Smith, B. 2006, Communication Skills Handbook for Accounting, John Wiley & Sons Australia, Milton, Queensland. And Swinburne University of Technology, 2013, Harvard Style Guide: In-text references, Reference lists and Bibliographies [online], accessed 12th August 2017.

Attachment:- Assignment.rar

Reference no: EM131668821

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Reviews

len1668821

10/5/2017 4:43:57 AM

You MUST use the Harvard system of referencing. For further information on the Harvard system of referencing please refer to: If you use quotes, please provide appropriate reference for it. Essay must be formatted as follows: 1.5 line spacing; Font: Times New Roman 12 point and Margins: Top, Bottom, Left & Right all 2.54cm. You are required to submit both an electronic copy of your essay (using Turnitin) and a hardcopy of your essay: Unless both the electronic copy and the hardcopy are received, your essay will not be marked and you will receive a score of zero (0).

len1668821

10/5/2017 4:43:50 AM

Clearly indicate which tutorial group you are from (Tutor’s name and tute day/time). Word Limit: 2,500 (+/- 10%) – excluding appendices (if used) and reference list. Weighting: 20% towards your final grade in this unit. Complete your essay in time to generate a Turnitin report: First reports can take 24 hours; subsequent reports can take up to 48 hours; Matched content must be specifically assessed by you to determine whether it has been appropriately cited in your essay; Please be aware that plagiarism constitutes academic misconduct, punishable under Swinburne’s Student Academic Misconduct Regulations 2012.

len1668821

10/5/2017 4:43:44 AM

Professional standard for: Spelling, Grammar & expression and Essay structure. Introduction provides a clear context and structure for the body of the essay. There is clear evidence the essay is planned. Response indicates an excellent grasp of the unit. Case is well chosen and used. Conclusion links the case with the topic. The topic is specifically referred to, and the reader is in no doubt the topic has been addressed. Minimum of 8 academic references cited (including 4 or more journal articles); AND… There is clear evidence the student has a very thorough understanding of the Harvard referencing standard – and has demonstrated this through application to the in-text citations and reference list.

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