Reference no: EM131984814 , Length: word count:550

Company Accounting Assignment

Assignment overview -

This is a team assignment where you are required to form a team of 3-4 students to work collectively on a group report. The objective of this assignment is to assist you to develop effective written communication skills, analysis skills and the ability to work as an effective member of a team.

Your team will produce a business report with the purpose of improving the knowledge of retail investors.

Related learning outcomes - This assignment assesses the following unit learning outcomes:

1. Demonstrate a comprehensive accounting knowledge in such areas as business combinations, consolidations, accounting for income tax, liquidation of companies and preparation of group financial statements

2. Apply critical thinking, problem solving techniques and presentation skills to individual and/or group activities dealing with financial accounting problems

3. Undertake independent research skills and communicate solutions utilizing relevant accounting standards, corporations' legislation and accounting and other relevant frameworks

4. Work collaboratively in diverse groups to develop appropriate and relevant solutions to accounting problems.

Rise and fall of Dick Smith: Lessons learned

Dick Smith Holdings Limited (also known as Dick Smith, Dick Smith Electronics or DSE), until 2016, was a well-known brand for consumer electronics goods. The company was founded in Sydney in 1968 by Dick Smith and owned by him and his wife until they sold to Woolworths Limited in 1982. Private equity firm Anchorage Capital purchased the Dick Smith business from Woolworths for $115 million in November 2012, paying just $20 million upfront, and floated the company on the ASX with a market valuation of $520 million 12 months later.

The retailer's share price began to lose ground in the second half of 2015 following two profit warnings and weaker than expected sales. Net profit after tax for the 2016 financial year had previously been forecasted to come in at between $45 million to $48 million, however, Dick Smith said in a trading update at the end of October that that figure was likely to be between $5 million and $8 million lower. At the end of November, Dick Smith revealed it was writing off 20% of its stock to the tune of $60 million.

On 4 January 2016, shares of Dick Smith Holdings last traded at 35.5 cents, which is a decline of more than 80% from the company's debut share price of $2.20 when it listed on the Australian Securities Exchange in December 2013. 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 Australia. McGrath Nicol were appointed as administrators by the company's board and receivers Ferrier Hodgson appointed by the creditors. CEO Nick Abboud stepped down on January 12th, 2016.

In its own company reports, Dick Smith Electronics 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, such as poor corporate governance arrangements and low transparency in financial reporting, also contributed to this failure.

You and each of your team members will need to:

Assume that you are a summer vacation intern at the Melbourne office of an international accounting firm and that along with some fellow interns you have been assigned to work on a group project to produce a report on Dick Smith Holdings Ltd for the period 2013-2016. Your team will prepare a business report including an executive summary. To avoid plagiarism, you are required to cite using the Swinburne Harvard referencing style whenever you include information from other sources in your work, and include a reference list at the end of your report. The report will reflect the personal view of your team based on research evidence, theory and original consideration.

The business report should specifically address, but not be limited to, an examination of the following matters: Just need to write 550 words on these two parts

1. Poor corporate governance arrangements and low transparency in financial reporting.

2. Appointment of administrator, receiver, and liquidator.

The report is expected to draw on:

• media reports (see some useful web links which will help you prepare your report)
• official websites of professional accounting bodies, accounting firms (particularly the Big 4), and other organisations
• reports issued by professional accounting bodies, accounting firms (particularly, the Big 4), and other organisations
• scholarly articles from academic journals.

Attachment:- Assignment File.rar