ACCOUNTING AND CORPORATE GOVERNANCE Part B Case Study on Two Companies: Coles Supermarkets and the Woolworths Group Limited

Running head: ACCOUNTING AND CORPORATE GOVERNANCE
ACCOUNTING AND CORPORATE GOVERNANCE
Name of the Student
Name of the University
Author Note

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Table of Contents
Part A...............................................................................................................................................2
Part B...............................................................................................................................................5

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Part A
Case study on two companies: Coles and Walmart
Manner of Disclosure
The Coles Supermarkets and the Woolworths Group Limited can be stated to be primary
companies which have their presence in Australia. These companies are also listed under the
Australian exchange. As these are lawful companies of the country of Australia, these companies
are supposed to abide by all the laws as well as regulations as present in the country. Moreover,
they will also be required to disclose the information about their different policies, practices and
their procedures which are being followed in the organization. These Corporate Governance
policies and practices are required to be submitted in the annual reports of the company so as to
provide the different stakeholders with an opportunity to understand about the company and to
ensure that all rules have to be abided by. These reports are usually submitted on the company`s
website.
Indicators of the companies
Corporate Governance
Indicators
Woolworths Group Limited Coles Group Limited
Number of directors in the
company
22 23
Percentage of non-executive
directors in the company
63% 45%

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Percentage of independent
directors in the company
27% -
Name of the CEO Brad Banducci Michael Chaney
Summary of the statement
as given by the company
The CEO has given a brief
information about the
financial performance of the
firm and has also highlighted
the manner in which the
company has performed in
the past few days.
(Woolworthsgroup.com.au,
2018). With this, the CEO has
also provided a brief
information about the
different initiatives which
Woolworths has taken over
these past few years. In the
same manner, the focus of the
year 2019 has also been
stated by the company which
assists in the understanding of
how the company envisions
for itself in the long run and
The chairman of the company
has provided the brief
highlights of the firm
belonging to the year 2018.
He mentioned the manner in
which the company has been
able to find success in the
long run and gave appropriate
details on the manner in
which these operations have
been carried out. The brief
details of all the groups had
been provided which was
then followed by the detail on
the prospects which the
company has attained for
itself and intends to attain in
the long run of the firm
(Wesfarmers.com.au, 2018).

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the manner in which the firm
is carrying out its different
corporate social
responsibilities.
Percentage of shares held
by the executive directors of
the company
5% 4%
Percentage of shares held
by block holders and
institutional investors of the
company
57% 48%
Analysis of the annual reports and understanding of the corporate governance indicators
Therefore, from the particular analysis, it could be understood that the data and procedure
disclosure as provided by both the companies can be stated to be quite satisfactory in nature.
Woolworths has followed a particular format with respect to its annual statements and hence,
their procedure can be stated to be very transparent in nature however, the reporting of the Coles
group has not been very transparent in nature and their reports may confuse certain investors
with respect to the details which are given by them for their different investors (Williamson,
1988).

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Part B
Essay Topic: The role of corporate Governance in Accounting
Introduction
Corporate Governance can be defined as the predefined set of regulations as well as the
regulations which a company is expected to follow in order to carry out the different operations
of the firm. The main aim of the corporate governance is to ensure that the organization is able to
balance out the interest of the different stakeholders and ensure that, the suppliers, financiers,
government as well as the shareholders are able to manage their supplies in the right manner.
Aasb.gov.au (2018) states that the concept of corporate governance aims to provide a body of
framework to the different firms with the objective to support their needs and define to them the
different processes which can be carried out by them. This will allow them to perform well and
carryout the disclosure in the correct manner as required by the firm. It is understood that if there
exists any ramifications with respect to the corporate governance rules and regulations which are
required to be carried out them and this also has to ensure that the positive image of the brand is
uplifted in the eyes of the different customers (Paul Pacter, 2013). Hence, the particular essay
will throw light on the different ordeals of corporate governance and the continuing trends which
take place in Australia.
Analysis
Corporate governance is often considered to be a serious affair in Australia and hence,
the different Australian organizations as present in the country would be required to ensure that
they abide by all the rules as well as the regulations so as to ensure that the firm is successfully
able to manage the long term relationships with the different customers as well as the different

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investors which will assist the business in securing a strong code of ethics (McGregor, 2012).
For this reason, the given section will make an analysis of the different practices which an
organization carries out with respect to the corporate governance, lay down the different
practices which may lead to a corporate failure, understand the new approaches to the concept of
corporate governance and lastly, highlight the role of the Clerp 9 and ASIC so as to ensure that
Ethical reporting and integrating reports can be well understood.
Practices in relation to corporate failure
Very often the different operations as linked to corporate regulation can be largely linked
to the corporate failure which may be faced by an organization with respect to the fact that the
management when under the strict set of rules and regulations tends to act in a manner of
distortion which leads to long term problems (Shleifer & Vishny, 1997). The case is the same
for many organizations as present in Australia whereby the management often faces certain
difficulties with respect to the fact that the strong regulations as imposed by the Corporate
governance tends to negatively harm the decision making procedure and puts the stake of the
different members of the organization exposed. Moreover, with respect to these rules, the
organization is unable to ensure that, they engage in long term relationships with the different
customers. According to Mattessich (1977), there are a large number of reasons why the
organizations often suffer from the issue related to the corporate failure. The primary reason
behind this failure is that, there are poorly designed packages, usage of various share options,
risky executive behavior and the greed for the profit which makes these different directors
engage in the wrong aspects due to the achievement of the goals. In lieu of this, there also exists
techniques like aggressive earning management procedure, sharing of share prices and other such

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practices to increase the values of the accounts are often undertaken. These were very relevant in
the case of Enron, Xerox as well as Ahold (Sterling, 2014).
Approaches to the corporate governance
Gompers and Metrick (2003) have stated that the subject of corporate governance has
been resolving considerably and as time passes each organization has been coming up with a
new technique of abiding by the rules of corporate governance. These procedures can be stated to
be the procedure of appointing new committees and independent directors which will then allow
the companies to perform well and carry out the different operations easily. In addition to this,
the regulations have also changed the risks as well as the benefits of the directorship so as to
ensure that the firm is able to benefit from these operations at large. Companies are now under
the planning that, the non-executive directors are required to be hired so as to see to it that the
management of the different organizations does not turn out biased towards their own returns and
that there takes place no frauds (Wesfarmers.com.au, 2018). The different organizations have
now aimed to ensure that, the directors who are new and are being hired will have experience
and a wide set of skills so as to ensure that they are being able to assist the different firms easily
(Laux & Leuz, 2009). Therefore, the Australian regulations as well as the different companies
have now adopted these new approaches which will assist them in improving their operations.
Roles of ASIC and Clerp 9 in Australia
The ASIC can be stated to be the Australian Securities and Investments Commission and
has come up with a new framework with respect to the rules and regulations which the different
firms have to abide by. This regulation which they have come up with can be stated to be the
Corporate Disclosure: Strengthening the Financial Reporting Framework (CLERP 9). In this

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regulation the regulators have provided various frameworks as well as guidelines which will
assist the firms in creating a positive image for itself (Freeman & Reed, 1983). These guidelines
have been presented in association with the Corporate Law economic reform program which will
assist in ensuring the different business regulations which the firm would be required to take care
of and maintain in order to promote consistency in the different operations and assist in the
transformation of the different businesses. The CLERP stands with the objective to present a
justified legislative framework which will be quite flexible in nature, will be cost effective in
nature and allow the different market participants with an equal opportunity. Moreover, it will
also remove the different barriers and bring consistency in the markets.
Independent directors
Eng and Mak (2003) state that the different independent directors are those individuals
who have been appointed as a Board member to judge the different operations of the firm but
must be something of an eminent personality and be able to maintain integrity and consistency in
the organization. They must be different individuals with adequate experience and must not
possess any pecuniary relationship with the different members of the firm. These members
cannot be any promoters of the firm and none of their relatives must be appointed in a
managerial position of the firm as this reflects biasness. Therefore, from the given study as done
on the Independent directors it can be implied that these individuals bring about a positive
environment in the firm and see to it that all corporate rules and regulations are being followed
within the realm of the organization. Lastly, these individuals also prevent the permanent board
members to engage themselves in fraudulent activities of the firm and ensure that in case they are
able to sense any such activity in the organization, it can be reported to the shareholders and that
their trust is not broken (Core, Holthausenc & Larcker, 1999). Moreover, the independent

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directors are also responsible for looking out for the different regulations and laws so as to
ensure that the accounting standards as maintained in the firm are practiced in the right manner
and abide the prescribed framework. For this reason, the role of the independent directors off the
firm cannot be ignored as they assist the firm in practicing their operations consistently in the
dynamic business environment.
Ethics and integrated reporting
The integrated and ethical reporting can be defined as a new reporting standard which is
being used by the companies and will allow the firm to enrich the superiority of evidence which
is accessible to the diverse investors and also allow the different companies to build a cohesive
and integrated framework. This will allow the firm to ensure that they are being able to maintain
the accountability of the firm and see to it that, an ethical approach to the overall reporting is
adopted. This will allow the enhancement of the operations and also ensure that the financial
capital can be created adequately (Bebchuk, Cohen & Ferrell, 2008). The main purpose of the
entre operations is to ensure that the information as being provided to the different investors can
be stated to be authentic in nature and with the help of this, all the employees are able to assure
long term success.
Other related developments
Therefore, it can be largely assumed that the arena of corporate governance has become
largely popular and in Australia various laws as well as the regulations have been passed for the
different firms in order to assist them in the particular procedure and to allow them to conduct
lawful operations as well. Due to the technological advancement, various procedures have
become digitalized and with respect to this, the accounting systems and obligations with respect

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to the same have also become digitalized and hence, this has supported transparency in the firm
and additionally ensured that the firms are able to maintain a good record with respect to the
same (Asic.gov.au, 2018). In addition to this, to make the particular system more transparent in
nature, the Independent directors have been hired who will assist the firm in becoming more
stable.
Conclusion and Recommendations
Therefore, from the analysis as undertaken in the particular essay it can be largely
understood that, in order to gain success in the long run, it is important for a firm to undertake
initiatives which will certify that, they can easily accept to the requisites of the corporate
governance. The corporate governance has presented a particular set of binding procedures as
well as the protocols which would go a long way in assisting the firms to achieve success in the
long run but these often clash with the other internal plans which are being undertaken by the
firm and it is due to this reason why the companies often start engaging in malpractices. It is in
this given scenario that the role of the Independent managers becomes largely crucial because
their activities ensure that the firm will be able to attain transparency and be able to carry out the
different activities easily. The governmental body of ASIC has introduced various Clerp 9 and
similar policies which serve as a useful framework and assist in ensuring that corporate
governance can be followed easily. The essay scrutinized the role of the concept of corporate
governance in Australia.

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