Corporate Accounting Case Study Assignment on Small Business Guide and Financial Reporting Regulation in Australia

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Corporate Accounting
Semester 2
Case Study Assignment
I. Assuming that you are the director of a small proprietary company, find the ‘small
business guide’ on the Corporations Act 2001 and learn of your rights and obligations
under the Act for managing your business. Prepare a brief report for 3 topics from the
following lists.
1. The meaning of registration, including shareholders’ and directors’ liabilities
2. Rules for internal management of a company
3. Company structure and setting up a new company
4. Continuing obligations once the company is set up
5. Company directors and secretaries
6. Annual financial reports and audit
7. Disagreements within the company
8. Companies in financial trouble
1. The meaning of registration, including shareholders’ and directors’ liabilities
Registration shall mean the following:-
(a) A separate legal entity with its own power;
(b) Liability of shareholders is limited; (Anon., n.d.)
(c) Liability of director for dues shall be limited to breach of duties;
(d) Continuous existence as going concern;
(e) Liability of director as guarantor/ security over assets which are personal.
2. Rules for internal management of a company
There are certain rules which are mandatory and certain are provisional/ replaceable
depends on enterprise. Further, there are special rules for one director companies.
A company shall not be required to have separate internal rules of its own. The
company may harbor the benefits of the standard prescribed under the Corporations
Act. Thus, if the company shall be required to have its own constitution if the company
wants to do addition or deletion to the standard prescribed under the corporation act...
3. Company structure and to set up a new entity
The drivers of small companies shall have two options:
(a) Buy Shelf Companies;
(b) Set up a new company.
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In case, the operators wish to acquire a company instead of not going for turmoil and
hardships of setting up a company. They can go for option 1.
In case the operators propose to set up a company, the following steps are involved:
(a) Application to ASIC for registration shall be made;
(b) At least one shareholder requirement;
(c) The company shall come into existence once ASIC registers a completely filled
form.
II. Case study B
Select 3 organisations from the following lists and prepare a brief report of their roles
in the regulation of financial reporting in Australia.
(a) the Financial Reporting Council (FRC)
The responsibility of FRC is to oversee the effectiveness of the reporting in financial
statements in terms of the financial reporting framework established.
The main points shall be the following:
(a) Overseeing the setting process of accounting and auditing standards applicable for
public and private sectors;
(b) Giving overall review about the quality of Audit conducted by the auditors so that
the overall review helps to create a general framework. .
(c) Financial Reporting framework shall also monitor international accounting and
auditing standards development, and uniformity and unison way of accounting and
auditing standards for worldwide use and shall further advance these standards
adoption.
(d) FRC, a statutory body, under Part 12 of the Australian Securities and Investments
Commission Act 2001 (the ASIC Act).
(b) the Australian Accounting Standards Board (AASB)
III. Case Study D Research on AASB 3
AASB 3 does not apply to all business combinations. Prepare a report of those business
combinations excluded from the scope of AASB 3.
Answer:
Australian Accounting Standard adjudges AASB 3 shall apply to a transaction or
transactions or other event which falls within the purview of a business
combination. The above AASB 3 shall not be relevant to:
(a) Accounting treatment in the books of accounts in case of a joint venturer
arrangement set up.
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