assmt of monitor corporate governace activities

Document title: Assessment 3 Version 1.0 Page 1 of 10 Resource ID: FNSACC624

FNSACC624

Monitor corporate governance activities

Assessment 3

LA023832

Document title: Assessment 3 Version 1.0 Page 2 of 10 Resource ID: FNSACC624

What you have to do This assessment consists of five (5) tasks. All tasks are compulsory.

The OLS learning resource together with suggested reading, research and web tutorials will assist you with completing this assessment.

Competency requirements Students must achieve a satisfactory result in each task.

If you do not satisfactorily complete any of the tasks, you will be required to do a gap assessment or a resubmit of the entire assessment. Please note you will not be able to attempt the assessment more than twice without approval.

To achieve a satisfactory result in these topics you must achieve the following results for each task:

Task Element of competency Satisfactory/Non Satisfactory

1

1.1 Establish corporate governance standards and practices

2.1 Analyse organisational practices to identify corporate governance obligations and performance

2.2 Examine queries from statutory and other regulatory authorities for corporate governance failure to assess change effects on internal control procedures

2.3 Assess content and structure of reports, returns and processes for review to evaluate policies being followed by organisation

3.3 Establish management processes to support corporate governance

3.4 Establish reporting plans to ensure completion of compliance requirements within scheduled time frames

Satisfactory/Not Satisfactory

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Task Element of competency Satisfactory/Non Satisfactory

2

1.1 Establish corporate governance standards and practices

2.1 Analyse organisational practices to identify corporate governance obligations and performance

2.3 Assess content and structure of reports, returns and processes for review to evaluate policies being followed by organisation

3.1 Analyse and monitor internal control procedures to determine performance indicators for compliance with corporate governance requirements

3.2 Evaluate information technology systems to determine their use and suitability for recording data from operations and transactions for corporate governance obligations

3.3 Establish management processes to support corporate governance

Satisfactory/Not Satisfactory

3 3.2 Evaluate information technology systems to determine their use and suitability for recording data from operations and transactions for corporate governance obligations

Satisfactory/Not Satisfactory

4

1.1 Establish corporate governance standards and practices

2.1 Analyse organisational practices to identify corporate governance obligations and performance

2.2 Examine queries from statutory and other regulatory authorities for corporate governance failure to assess change effects on internal control procedures

2.3 Assess content and structure of reports, returns and processes for review to evaluate policies being followed by organisation

4.1 Assess achievement of performance indicators and review against key result areas

4.2 Monitor compliance preparation processes and review in line with corporate governance requirements

4.3 Analyse failures in compliance to diagnose shortcomings and to improve processes, in line with corporate governance requirements.

Satisfactory/Not Satisfactory

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Task Element of competency Satisfactory/Non Satisfactory

5

1.1 Establish corporate governance standards and practices

2.1 Analyse organisational practices to identify corporate governance obligations and performance

2.2 Examine queries from statutory and other regulatory authorities for corporate governance failure to assess change effects on internal control procedures

2.3 Assess content and structure of reports, returns and processes for review to evaluate policies being followed by organisation

4.1 Assess achievement of performance indicators and review against key result areas

4.2 Monitor compliance preparation processes and review in line with corporate governance requirements

4.3 Analyse failures in compliance to diagnose shortcomings and to improve processes, in line with corporate governance requirements.

Satisfactory/Not Satisfactory

Result

- Assessment result: Satisfactory (S) / Not satisfactory ( NS)

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Instructions The following information applies to all tasks in this assessment.

• Before you begin these tasks you should:

o Access and read the online resources, including relevant sections/and topics on Assessment 3 on the OLS as per the Study Guide.

o Read the specified sections of the Corporations Act 2001 (Cth) and any relevant cases. These can be accessed on: http://www.austlii.edu.au/au/legis/cth/consol_act/toc-C.html

• For all tasks in this assessment you should:

o Complete your answers in Microsoft Word and submit this file on the OLS. Take care not to over-deliver content. You should demonstrate that you have a sound analysis and understanding of each task. Some responses only require a sentence at most and others a paragraph.

• For all the tasks in this assessment:

o You are not expected to write the sections of legislation word for word. You should read the sections and analyse them to gain a general understanding of basic corporate law principles affecting corporate governance

o You are not limited to the OLS resources and independent research is encouraged provided you properly reference these sources using either the APA or Harvard Referencing style. Any Reference/Bibliography required are to be presented as an overall Reference at the end of this Assessment. Footnotes are not required.

• For this assessment, you must:

o Demonstrate an ability to access, research and critically analyse information contained within the Assessment, on the OLS and information that the learner researches independently.

o Read and analyse resources to produce a written response using clear language, with correct terminology, grammar and spelling to convey meaning. A guide as to length is provided with each question. A paragraph is ten lines or less on an A4 portrait sheet. All answers must be submitted on the template provided in New Times Roman format font size 12.

o For Tasks 2 and 4 you must read and examine the ABC Ltd Case Study found in the learning resources provided and the find and research the information on APRA’s Inquiry into Commonwealth Bank (CBA) Final Report 2018: Section A.

o You must answer each task satisfactorily and not make any material errors to be assessed as satisfactory for this Assessment.

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o You must provide reasonable evidence of the required correct knowledge and performance evidence to be assessed as satisfactory.

o You will be assessed in this assessment as either satisfactory or not satisfactory.

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Task 1 Jack is a director of Colour Image Pty Ltd, a graphic arts company which specializes in printed fabrics. Incorporation of the company was registered on the 1 February 2015. At a board meeting in 20 January 2017 it was decided to send Jack overseas to study design and explore new screen printing techniques and Jill his wife was appointed as the second director. Jack was away travelling on behalf of the company for six months. He missed all board meetings during this time. In May (while Jack was still overseas) Colour Image Pty Ltd incurred a debt, as a result of which the company became insolvent. The company balance sheet valued its goodwill at very high levels based on its research and development costs. However the company has now been placed in liquidation and the liquidator is seeking compensation from all directors. Jack has asked for advice on his possible liability for insolvent trading under the Corporations Act, 2001 and any defences, which may be available to him. In your answer, you must provide evidence to answer on each of the following points:

a) Define and explain insolvency and examine the best accounting basis for judgment for a Court, management or accountant to make an assessment of solvency/insolvency. Write no more than three paragraphs.

b) Recognise eight common indicators of insolvency. Point form is satisfactory.

c) Explain legal liability for insolvent trading (i.e. a director’s duty to prevent insolvent trading, and failure to prevent incurring of debt: ss 588G (1) & (2)). Write no more than one paragraph.

d) A legal defence that may be available to Jack. Write no more than one paragraph.

e) Assume Colour Image Pty Ltd is required to lodge financial reports with the ASIC and the

financial year ends on 31/12 each year. Prepare a timeline of the common forms /resolutions/returns which Colour should lodge with ASIC to ensure the company’s compliance with the Corporations Act 2001. Write no more than three paragraphs. Any diagram or timeline excluded.

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Task 2 Read the ABC Case Study in the learning resource on the OLS and provide evidence in short answers written response to answer the questions below.

a) Identify and explain at least two (2) financial performance indicators and at least one non-financial performance indicator for the company for the period between 2001 to 2007. Write no more than one paragraph.

b) Compare these performance indicators described in 2 (a) against the (poor)

performance indicators of the Company in 2008. Describe the major differences? Write no more than one paragraph.

c) Identify and explain in detail five poor corporate governance practices that led to the

company’s eventual collapse. Three (3) of these practices must be accounting issues/poor accounting practices and the other two must relate to the failure of management processes and information systems to support and implement good corporate governance obligations. Write no more than five paragraphs.

(d) Identify three internal and two external stakeholders affected by the poor corporate governance processes displayed by the ABC Learning Group Limited and their potential liabilities and losses. Write no more than two paragraphs.

(e) Explain how ABC Learning Limited’s business strategy, management processes and

culture contributed to their corporate failure and failure as an ethical corporate citizen. Write no more than four paragraphs.

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Task 3

a) Evaluate an accounting software system you have used or had access to and make an evaluation of its use, suitability and advantages for recording data from operations and transactions for corporate governance obligations. Write no more than two paragraphs.

b) Examine how integrated accounting software systems may benefit better monitoring

of corporate governance and employee records. Write no more than two paragraphs.

Task 4 “Commonwealth Bank has agreed to pay $700 million and legal costs to resolve proceedings brought by AUSTRAC after admitting to breaching (inter alia) anti-money laundering and counter- terrorism laws.” Source: 4 June 2018 headline from News.com.au Article: Largest fine in Australian corporate history (Accessed 30 August 2018) On 28 August 2017, the Australian Prudential Regulation Authority (APRA} announced it would establish a Prudential Inquiry into the CBA group. This was following a number of incidents in recent years that have damaged the reputation and public standing of the CBA group. The purpose of the Prudential Inquiry, contained in the Terms of Reference, was to examine the frameworks and practices in relation to governance, culture and accountability within the CBA group that have contributed to these incidents. The Panel provided its Progress Report on 31 January 2018 and its Final Report in 1 May 2018. You are required to access APRA’s inquiry into the Commonwealth Bank of Australia (CBA)’s Final Report: Executive Summary and Section A: Governance (p 3-27 and p47) by accessing the following link: https://www.apra.gov.au/media-centre/media-releases/apra-releases-cba- prudential-inquiry-final-report-accepts-eu. It is also recommended that you locate and examine CBA’s annual report for 2017. Using the Final Report and at least two other independently identified sources, prepare a written report:

a) Describing the structure of the Board of directors of the CBA including its

composition/standing Board Committees and the various roles of the Directors. Write no more than four paragraphs excluding charts and diagrams.

b) Identify and explain three areas of misconduct /breaches of various laws by CBA arising from their conduct in this instance. Write no more than three paragraphs excluding charts and diagrams.

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c) Analyse CBA’s failures to adequately monitor and diagnose, shortcomings and

improve processes, in line with good corporate governance principles and to properly manage compliance and management risks as highlighted by the APRA inquiry. Write no more than six paragraphs excluding charts and diagrams. Provide an adequate bibliography as part of your answer. You should acknowledge all independently researched sources using either the APA or Harvard referencing method.

Task 5

Research and prepare a short written summary report. Access the following link: https://financialservices.royalcommission.gov.au/Pages/default.aspx Find, identify and explain in a written report four detailed examples of poor corporate governance as outlined to the The Royal Commission into the Misconduct in the Banking, Superannuation and Financial Services Industry was established on 14 December 2017 by the Governor-General of the Commonwealth of Australia, His Excellency General the Honourable Sir Peter Cosgrove AK MC (Retd). Write no more than six paragraphs.