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Accounting and Auditing Reports

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Added on  2020-02-24

Accounting and Auditing Reports

   Added on 2020-02-24

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Q 1.Analyze and discuss whether the ASX Listing Rules would permit the Proposal for the capital rising in the report prepared by Jack Good?Answer: - NO, Australian Stock Exchange (ASX) posting organization would not allow Proposal for the capital ascending in the report arranged by the Jack Good. Jack Good needs toraise the funding to expand the association. So he proposes to issue new offers. The report he gets ready was great at one side yet it would not follow the all the rules of Australian Security Exchange.As per ASX posting rules requires an association needs to meet ASX showcase list. 1The Company must fulfill least criteria, for example, 1. Must fulfill least standard of Structure, size, and number of an investor. 2. Securities must be the issue which is reasonable for new and existing security holder. 3. Investor premium must be exhibited before securities are quoted.4. Financial information should be produced in accordance with Accounting and Auditing reports. 5. Securities issue must be fair to new and existing shareholder. Meeting criteria for listing Admission criteria Requirement1.Number of ShareholdersMinimum 400 investorsOrMinimum 350 investors and 25% unrelated partiesOrMinimum 300 investors and 50% unrelated parties Profit2. Or Assets$1 million net profit over past 3 years+ $400000 net profit over last year.$ 3 million net tangible assetsOr$ 10 million market capitalization1 Module 5, ASX listings and rules.1
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Continuous DisclosureAccording to Australian Stock Exchange 2rule 3.1 general obligations on a listed company to disclose material information timely in the market. Australian Stock exchange also required that company should provide true information.Periodic disclosureIn addition to disclosure the report ASX- listed companies are required to disclose periodic information timely:-1. Half yearly report2. Quarterly report3. Annual reportAfter investigation the reported plan by Jack Good I infer that he had not considered the outcomes:- Jack get the ready to report in which he orders investor in two gatherings that too is group A who was the current investor and have a voting right and second is group B who was the new investor and don't have voting right. As indicated by his proposition Group a gets 60% of any profit announce and rest for Group B. He had not disclosed its financial report clearly.At the point when United set up a budgetary report of 2016/2017 they find, there is sure increment in cost of capital because of which there is ascending in the cost. Jack shows a bogus report of benefit since he knows whether reveal the genuine figure of benefit it might influence the cost of the organization's offer. So he misleadingly builds the benefits of organization. By the late October share showcase ends up plainly mindful of United organization has money related emergencies and the market cost of joined offer dives? 2 Module 6, ASX market integrity and corporate governance2
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As expressed before United has recorded organization with Australian Stock Exchange so Jack Good has not confronted any troubles for issuing new offers in advertising. Jack leads a deceptive arrangement of corporate Act 2001 Australian Securities and Investment CommissionAct 2001. He had not unveiled this data to Australian Stock Exchange. This case is much the same as Australian Wheat Board; it likewise exhibits a false yearly report. To whom should the data unveiled:- The organization needs to unveil just to ASX, does not have to reveal to the overall general public. An organization must reveal in the development to the overall general public in advertising after got recognize from ASX3. Posting decides 19.12 have expressed that, once the director and investor must mindful of the data, they should affirm that ASX would mindful with the data or not. If not then it is the duty of director or investor to illuminate the ASX promptly. For the recorded organization, Australian Stock Exchange recorded guidelines should completely comprehend so as to proceed with a run. The organization would delegate one individual who is organization secretary who specifically speaks with Australian Stock Exchangeon posting rules. For this situation Jack and Company secretary, Kerry (organization secretary) conceals data from ASX and precluded the section from claiming ASIC part in the organization. Organization secretary is the one individual who chooses whether the data uncover or not.ConclusionJack Good prepares the report for the welfare of company by issuing the share in a market but he had not discussed the issue of new share with Australian Stock Exchange. If he discusses earlier his report and gets various alternatives that are possible.Australian Security Exchange prepares to give in- principle advice to the listed company on the application of listing rules. Firstly it suggested that wavier is need or not, secondly, it can be helpful in managing time.3 Davidson A, 2011 disclosure obligations to the ASX and to your D&O insurer.3
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Any advice given by the Australian Stock Exchange is confidential and not disclose to market.Australian Security Exchange does not charge any fees for providing advice to the listed company.Jack Good had not discus with ASX about the issue of new share. He has to take the lesson from the4 Australian Wheat Board, between 1999-2005 AWB faces the same problem. The directors and other officers had not disclosed financial records timely in the market and present a false report regarding their profits. After this director and other officer charged with the penaltyfor hiding real report of mislead market. Question: (i) Advise the directors, the CEO and the CFO of any potential liability under the Corporations Act 2001 (Cth) with respect to matters concerning the annual report. Consider if any potential defenses are available. Reply: - The Corporations Act 2001 (Cth)5 expressed that organization chiefs and alternate officers of the organization have practiced their power and release their obligations with care and determination. These obligations are:- • Make the judgment in accordance with good faith• Not to have an individual intrigue when making any judgment. • Judgment is to the greatest advantage of the company [s 181] chief and another officer must exercise their energy to make the judgment in compliancewith common decency for the welfare of enterprise and for the legitimate reason. [s 182] they are disallowed from utilizing their position for the welfare of their own. 4 Geisker J, 2010, ‘ the AWB shareholder class action – lesson in continuous disclosure’5 Corporation Act 2001 , ss 180-1844
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