Liquidation: Downfall of ABC, HIH and OneTel

qwertyuiopasdfghjklzxcvbnmqwerty
uiopasdfghjklzxcvbnmqwertyuiopasd
fghjklzxcvbnmqwertyuiopasdfghjklzx
cvbnmqwertyuiopasdfghjklzxcvbnmq
wertyuiopasdfghjklzxcvbnmqwertyui
opasdfghjklzxcvbnmqwertyuiopasdfg
hjklzxcvbnmqwertyuiopasdfghjklzxc
vbnmqwertyuiopasdfghjklzxcvbnmq
wertyuiopasdfghjklzxcvbnmqwertyui
opasdfghjklzxcvbnmqwertyuiopasdfg
hjklzxcvbnmqwertyuiopasdfghjklzxc
vbnmqwertyuiopasdfghjklzxcvbnmq
wertyuiopasdfghjklzxcvbnmqwertyui
opasdfghjklzxcvbnmqwertyuiopasdfg
hjklzxcvbnmrtyuiopasdfghjklzxcvbn
mqwertyuiopasdfghjklzxcvbnmqwert
yuiopasdfghjklzxcvbnmqwertyuiopas
FINANCIAL ACCOUNTING

Liquidation
Executive Summary
The downfall and failure of organizations in Australia proves to be an eye opener for other
organizations and a teaching lesson. The downfall of HIH, OneTel, ABC learning clearly
indicates the need for strong audit policy and corporate governance. In this report, the major
emphasis is on these three organizations. The downfall of all the three organization has
studied and discussed in the report. As per the report the weak areas has been in the process
of corporate governance and weak management.
2

Liquidation
Contents
Introduction...........................................................................................................................................3
Liquidation............................................................................................................................................3
 ABC downfall................................................................................................................................3
 HIH Downfall................................................................................................................................4
 OneTel Downfall...........................................................................................................................5
Recommendation...................................................................................................................................6
Conclusion.............................................................................................................................................8
References.............................................................................................................................................9
3

Liquidation
Introduction
The foundation of ABC Learning has held in 1988 and by the year 2000, it had more than 30
branches. ABC Learning developed from one seedling to a huge tree after being enlisted in
2001. In Australia, it had around 660 centers while 2238 centers all over in United States,
United Kingdom, and Australia. As per CPA (2012) there were various reasons behind the
company’s failure out of which the madness for ruthless extension and accession were the
main ones. Also, the recorded assets and goodwill were roughly overestimated which resulted
in issues related to accounting. The auditors also faced difference of opinions. Since 2007 the
company was largely indebted to an extent that it had to rearrange finances with the bank
CPA (2012). Repayment of long-term loans in the short term also crashed the cash flows.
Because of being subjected to unethical operations in financial aspects was highlighted the
value of shares also fell down suddenly. Finally, as a result of all this, the company wounded
up.
Liquidation
 ABC downfall
ABC, the giant in childcare centre galloped to a strong and promising start however, could
not sustain in the market owing to various factors. Matter of improper management together
with lack of vision led to the downfall. Improper management and lack of proper risk
management technique created the downfall (Kruger, 2009).
ABC Learning stood tall and expanded in the atmosphere that was challenging and
competitive at the same time. This accounted for the enormous growth of the company in a
short period of time. Being the first corporate daycare and childcare center in Australia it
grew very fast over a short period of time. It also witnessed 300% increment in its share price
in a time of five years from listing. A lot of factors including economic were behind the
company’s failure. A lot of improper management was seen in ABC as it focused largely on
profit-making by whatever means possible. There was a lot of complaint with regards to poor
quality and inefficient personnel. Thus, the company started failing. As per Livne (2015),
ABC was careless about its management and its performance which resulted in a severe
setback. The company ignored mismanagement and financial troubles that were as a result of
its focus on ruthless acquisitions.
4