Part One (60 Marks)

Read the following article which discusses various ethical issues associated with the Dick Smith Electronicscollapse.

Part one of this assignment requires you to apply elements of ethical decision making models to a contemporary corporate issue. This section of the assignment will be marked based on the quality of your discussion and research.

Instructions

You are required to research the Dick Smith Electronics case and use relevant sources to answer the following questions. You should use a mixture of academic articles, newspaper articles and other relevant financial commentary.

  1. Determine the facts of the case.
  2. Identify and discuss the main ethical issues that arise from the Dick Smith case?
  3. Determine the norms, principles and values relevant to the case (Hint: you may like to look at contemporary theories such as agency theory, stakeholder theory and social contract theory).
  4. Identify stakeholders affected by Dick Smith’s collapse.Describe each stakeholder, their probable concerns and how they are likely to be affected.
  5. Identify the accounting issues that have been reported in regards to the Dick Smith collapse.
  6. Consider the Dick Smith case in relation to the Australian regulatory environment for corporate governanceand present your opinion on the current framework.

Part Two (40 Marks)

Refer to the 30 June 2016 financial reports of Qantas Australia Group on their web site:

  1. Answer the following questions using the consolidated financial report and the notes to the consolidated financial report for the year ending 30 June 2016 (20 marks):

a)Compare the director’s report and director’s declaration. What are the key features of each of these? Why are both reports required?

b)State the accounting equation at the beginning and end of the year.

c)Which accounting firm audited the financial statements and what opinion was issued?

d)Did the auditor provide any other services to Qantasduring the year? If so, provide specific details of what these services were?

e)What is the largest asset the company owns and state its opening and closingnet book value? What valuation method is used for this asset?

f)What depreciation method is used for the company’s property, plant and equipment?

g)According to the financial statements what is the largest source of revenue for Qantas? What does the “other” revenue category consist of?

h)How much did Qantas recognise as an expense for finance costs during 2016. Has this increased or decreased since 2015? Suggest a possible explanation for this change?

i)The directors of Qantas declared a fully franked dividend during 2016. How much was the dividend in total, and how much was the dividend per share?

j)Compare the net profit with the net cash flows from operating activities. Which amount is larger? Provide an explanation for this.

k)Have the directors identified any contingent liabilities for the group? If so what are they and how have these been disclosed?

l)Qantas has reported Unredeemed Frequent Flyer revenue as a liability. Construct an explanation for what this represents.

2. Calculate the following ratios for Qantasfor the year ending 30 June 2016 (20 marks):

a)return on equity

b)return on assets

c)profit margin ratio

d)asset turnover ratio

e)current ratio

f)debt to equity ratio

g)interest coverage ratio

h)debt coverage ratio

i)price earnings

j)dividends per share

General Requirements:

  1. Answer each question using a heading indicating the question number. Part one and part two of the assignment should be answered within the same word document.
  2. Full referencing is required in accordance with the Harvard Referencing style. PLEASE NOTE – when a reference is given the tutor must supply the source of the reference and how where it relates to the text submitted. As an example

Is the answer given is

“The value of justice is a substantial value which is not portrayed in the case of Dick Smiths Electronics. They fail to disclose the real worth and the financial statements to the stakeholders which are information asymmetry because even the administrators are not examined about the status of the company. Therefore, they have no justice when they fail to explain the actual values of their business and provide the financial statements which are their responsibility (Patel, 2016).” The tutor must give the reference such as Patel, J., 2016. The relationship between Investment Popularity and Accounting Information: Evidence from the UK Equity Crowdfunding Market but also supply the extract from that reference that shows the correlation of the answer to that reference This is critical in validating the submission.

  1. There is no specified word length for this assignment. However, be as concise and efficient in your writing as possible. You should not require more than a maximum of eight1.5 spaced A4 pages (12 point font).