Problem-Solving in Accounting: A Key Skill for Effective Decision Making

This assignment discusses the importance of problem-solving in accounting and its role in effective decision making. It covers various types of accounting questions and provides answers to them. The assignment also explores the concept of corporate governance and its application in Crown Resorts.

Problem-Solving

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
PART A...........................................................................................................................................3
Question A1.................................................................................................................................3
Question A2.................................................................................................................................3
Question A3.................................................................................................................................3
PART B............................................................................................................................................4
Question B1.................................................................................................................................4
Question B2.................................................................................................................................4
Question B3.................................................................................................................................5
Question B4.................................................................................................................................6
PART C............................................................................................................................................7
Reflection.....................................................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Problem-Solving refers to a key skill and technique which can be used by the firms so
that they are able to identify their problems and can solve them in a highly effective manner . In
the context of large organizations, it becomes quite important that they are identified and solved
highly effectively. Thus in accounting, it is highly useful to take certain decisions which can be
quite helpful in the future. In this assignment, answers to different types of accounting questions
will be discussed.
MAIN BODY
PART A
Question A1
(a)For the year ended 30th June 2019 the Freedom Group's inventory stands at 120,211.
The Inventory of the company is 12.20 % of the Total Assets of the firm.
(b) For the year ended 30th June 2018 the Freedom Group's inventory is valued at 81,101.
Also the Inventory of the company is 10.58 % of the Total Assets (Annual Report, 2019).
(c) According to Note 11, the provision which has been made for the purpose of
impairment is 435.
(d) An asset is termed to be impaired when the future cash flows which are expected be
received from it are less than the book value at which it is shown.
(e)Net realisable value is a value which is received when a firm sells the particular asset
which is held by it.
Question A2
(a) For the year ended 30th June 2019 Trade and other receivables stand at 87,745. The
Trade Receivables are 8.90 % of the total assets.
(b) For the year ended 30th June 2018 Trade and other receivables stand at The Trade
Receivables are 8.20 % of the total assets.
Question A3
(a) If the Inventory write-off amounting to 60 million had been adjusted in the Financial
Statements for the year ended 30th June 2018 then it would have created an impact on the overall
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values. The value of the Inventory for the year ended 30th June 2018 would had been 21101.
Also the value of Retained Profits would had been reduced to 71531.
(B) If the Bad Debts amounting to 10 million are adjusted in the Financial Statements for
the year ended 30th June 2019 then it would have created an impact on the overall values. The
value of Retained Profits would had been reduced to 61531 as a result as the inventory
adjustments of the year financial year 2018 would had also been taken into account. Also the
value of Trade Receivables would had reduced to 77,745.
PART B
Question B1
Corporate Governance means a set of various types of rules and regulations which create
an impact on the structure of the companies. It is regulated by a number of agencies in Australia.
These are ACCC, ASIC and APRA. In an Australian Public Listed Company, it serves a purpose
because it can ensure that the company is able to fully satisfy its potential investors that it is a
reliable company which they can trust for the purpose of making an investment.
Question B2
Crown Resorts states that it seeks to add relevant value by making the use of Corporate
Governance Principles in a highly effective manner. It uses them appropriately and thereby it
ensures that it is able to achieve the goals and objectives which it has set for the future. The
Principles which have been set for the Annual Report 2020 have to be followed. For this purpose
there are a range of recommendations which have been provided.
According to the Recommendation 2.1 it has been recommended that a Committee is
created in the company which consists of several members. The name of this committee will be
People, Remuneration and Nomination Committee. The role of this committee will be to ensure
that develop the policies related to the selection of the Directors and also make policies related to
the remuneration of the directors. Also this recommendation provides for ensuring that in the
absence of a Nomination Committee the process which is applied to address different types of
issues has to be disclosed. The recommendation provides for details regarding the formation of
Nomination Committee and the way it must be formed. The Annual Report of Crown Resorts
state that the Nomination Committee will be formed which ensures the compliance of the
company with the Recommendation 2.1.
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Recommendation 2.2 states that an entity is required to disclose Board skills matrix in
which the skills of the Board of Directors will be recorded clearly. This will help in reviewing
the skills of the Board of Directors constantly and ensure that the rating is given to each
individual director on the basis of this skills matrix. These ratings are required to be viewed and
reviewed regularly. Further it is stated that a regular review of the skills matrix must be taken at
regular intervals so that the level of skills of the directors are assessed quite regularly and thus
the recommendations are provided if there is an improvement which is required in the skills
matrix. In the Annual Report 2020 of Crown Resorts it has been stated that Board Skills Matrix
will be formed so that the assessment of skills of the board of directors can be done. Thus this
confirms the compliance with Recommendation 2.2.
According to Recommendation 2.3 every listed entity has to to disclose the name of
directors to be considered for the post of Independent Directors. The interest, position and
relationship of the directors have to be described clearly in the board. Also the length of service
of each director has to be considered. This is required to select the directors fairly and to comply
with the Corporate Governance Principles which have been set for the company. In the Annual
Report 2020 of the Crown Resorts the name of different directors have been given and the status
of their independence is given. Therefore in this way compliance with the Recommendation 2.3
can be ensured.
Recommendation 2.4 suggests that the majority of the board of the company should form
of independent directors. This will help in acting in the best interests of the entity and will help a
lot in smooth functioning of the board. Thus the activities of the board will be handled smoothly.
It requires the directors to act in the best interest of the entity rather than giving priority to their
other interests. The Annual Report 2020 of the Crown Resorts ensures that majority of the
directors are Independent Directors. This therefore ensures compliance with the
Recommendation 2.4.
According to Recommendation 2.5 the Chairman of the board must be an Independent
Director and must not be CEO of the entity. This is to avoid having the same person on both of
these posts which may affect decision-making abilities. This therefore acts in the best interest of
the company. In the Annual Report 2020 of the Crown Resorts a particular section has been
provided which discloses that the Board Chairman must be independent. In this way compliance
with Recommendation 2.5 can be ensured.
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Recommendation 2.6 states that a listed entity must have a program through which the
directors can be inducted in the organization and there must be a periodic review of finding out
the requirement of having a need for existing directors that they take skill training for developing
and enhancing their skills professionally. The Annual Report 2020 of Crown Resorts also states
the Director Professional Development must be ensured. In this way compliance with
Recommendation 2.6 is ensured.
Thus all of these recommendations seek to add value by helping the company adhere to
the Corporate Governance Principles. In this way the company will be able to achieve its aims
and objectives in the right manner. Also by adhering to these principles the entity will be able to
enhance its focus on the working pattern to maintain smooth functioning of the Board.
Question B3
The Article contradicts the role of Nominations Committee at Crown Resorts. This is due
to the reason because according to the Article it has been suggested that the Nominations
Committee's members are not aware of the problems which are being faced by the members.
Also there has been a problem of communication not being done properly to the Risk Committee
.
There is also lack of fairness in the selection process of the different members of the
committee. This has been supported by the statement which was given by Geoff Dixon who as
the Former Director of Crown Resorts and ex-Qantas boss.
According to the statement which was given By Mr. Dixon it can be said that the
problems which are being faced at Crown Resorts are systemic in nature. This means that the
problems are deep-rooted within the system. This is thus creating problems as well as issues in
the management of the resort.
The implications of all this on the Nominations Committee and the Board as a whole will
be quite bad because this leads to a bad image for both in the media. This is due to the reason of
the role played by the members of the Nominations Committee in the Selection Process. Thus
this will affect the image as a whole.
Question B4
(a) Recommendation 2.3 provides for determining the length of service to be served by
the Board of directors. It has fixed the length of service to be served by them. According to it the
length of service to be served by each director has been fixed whether they are Independent
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Directors or Non-Independent Directors till 9th September 2020. Such a recommendation is quite
important in the Corporate Governance Principles of the company because it ensures that the
tenure of the service of directors is fixed and is reviewed regularly. It also gathers importance
due to the reason that such a principle also ensures that a periodic review of the performance of
the directors is done and Skills Matrix is used for the assessment of the level of skills of these
directors. It is provided in the recommendation that the independence of a director in an entity is
compromised when their independence from the management and substantial holders has been
compromised. Thus the recommendation points out at the independence which must be provided
to the directors working within an entity. By determining the length of service this can be done
so that the directors can take independent decisions. (Corporate Governance Principles and
Recommendations, 2019).
(b) The Annual Report 2020 of Crown Resorts states all the recommendations in the
different principles. The Company has largely met all these recommendations because by
following the recommendations the duration of service of each director whether independent or
non-independent has been fixed for a certain period of time. There haven't been any kind of
issues which haven faced by the company in the process of implementing this recommendation
effectively. The company has complied with the requirements of length of service of the
directors and has also ensured that its directors are able to take their decisions independently.
This is helpful for the best interest of the company. (Annual Report, 2020).
PART C
Reflection
I am a student who is studying in the university. In my course I am studying various
subjects. Among one of them is Accounting. It is a subject which deals with the financial data,
facts as well as information clearly. It manages the financial information in the right manner and
is also helpful in the analysis and interpretation of results.
Since starting the course my concept of accounting has changed. Earlier, I used to think
that accounting is just book-keeping in which the information is recorded and managed. But
there is also analysis and interpretation in it. Thus due to this reason my perception regarding
accounting has witnessed a change.
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I am now aware that accounting is not just book-keeping but is also helpful for the
management to derive conclusions and recommendations and take decisions which are required
for attaining the desired success in the future.
Thus I can conclude that by witnessing a change in my perception about accounting I am
able to learn it in a much better manner and I am now able to ensure that I take the right
decisions in the future by making the use of my accounting skills effectively and efficiently.
CONCLUSION
From the above report, it can be concluded that problem-solving is a skill which is
helpful in the identification of problems and solving them effectively so that they do not affect a
company's performance. By making its use the managers of an organization can make sure that
they are able to achieve the desired goals and objectives which they have set for the future.
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REFERENCES
Annual Report. 2020. [Online]. Available through:
<https://www.crownresorts.com.au/CrownResorts/files/03/03f7dcdc-cb6e-421b-b88a-
99d363a84181.pdf>
Annual Report. 2019. [Online]. Available through:
<https://ffgl.com.au/wp-content/uploads/2019/10/2-9188-FFGL-AR-2019-FINAL-1-updated-
pages.pdf>
Corporate Governance Principles and Recommendations. 2019. [Online]. Available through:
<https://www.asx.com.au/documents/asx-compliance/cgc-principles-and-recommendations-
fourth-edn.pdf>
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