Corporate Failures in Australia: Role of Liabilities and Corporate Governance

FINANCIAL ACCOUNTING
STUDENT ID:
[Pick the date]

Executive Summary
There has been a concern amongst investors regarding the rise in incidents of corporate
failure in Australia. The most common reason stated for the same is liabilities. In order to
understand and analyse the extent to which liabilities tend to lead to corporate failure, three
major cases of corporate failure in the recent history have been taken. The various
circumstances leading to failure for these companies has been critically analysed. It has been
highlighted that the real cause of failure for these company is the sharp reduction in net assets
which remains misreported since long owing to unethical management and corporate
governance failures. As a result, there is a need to strengthen the corporate governance
framework for which various measures have already been undertaken in the 21st century.
However, going ahead more measures are required coupled with emphasis on ethics training
and ethics education in educational institutions so as to raise the ethical standards.
1

Table of Contents
Introduction...........................................................................................................................................3
Ethical Conduct Improvement...............................................................................................................3
Corporate Bankruptcies.........................................................................................................................4
Poor Corporate Governance – Pivotal issue.........................................................................................5
Recommendation...................................................................................................................................6
References.............................................................................................................................................6
2