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Running head: Research & Analysis - Individual
Research & Analysis – Individual
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Research & Analysis - Individual1
MEMORANDUM
TO: The Board of Directors
FROM: The Consulting Firm
DATE: 22 January 2020
SUBJECT: Management accounting issues relating to Woolworths Supermarkets
The aim of this memorandum is to elucidate the key Management accounting issues
experienced by the leader of Australia’s retail business, Woolworths Supermarkets.
Management accounting can be referred to as the interpretation of the accounting data and
information by the managers and administration of company to help themselves in taking
more prudent decision. This memorandum brings such a key managerial accounting issue
before the eye of the Board and suggest some remedial measures by using managerial
accounting tools and techniques.
One such key managerial accounting issue that can be highlighted concerning
Woolworths Supermarkets is "employee dissatisfaction”. The main identified management
accounting issue “employee dissatisfaction” was caused when thousands of workers were
underpaid and the amount of this underpayment was roughly around $300 million. A fair
work Ombudsman was appointed by the government to inspect this massive issue. This case
of under payment of wage was brought before the stock exchange where the main
management lag can be portrayed as a breach in the management accounting as they did not
inspect their labor department as long as 9 years which concerned around 5700 staff.
However the number of the unpaid workers would be increasing in future as the investigation
further rolls out. Woolworth will find further lag in its payment process as it further initiates
its internal investigation of scrutinizing its payment records to determine the additional

Research & Analysis - Individual2
number of former staffs who may also be underpaid and were not detected on account of
transfer or change previously.
According to the appointed Ombudsman, Sandra Parker, it was a surprise to her when
she found out that a prestigious retail chain like Woolworth was classified with the group of
big firms who have this wage under payment allegation against their names like
Commonwealth Bank, Wesfarmers, Qantas Airways Limited and many more. The fair work
Ombudsman is entrusted with the responsibility of bringing into notice all issues relating to
Woolworth that breached the “Workplace laws”. This management accounting issue of
“employee dissatisfaction” out of underpayment of wage, attracted comments from eminent
personalities like Tony Bourke, the Labor’s employment spokesman who demanded for a
parliamentary level investigation.
Critical analysis of last two years data, could not find any significant events relating
to this underpayment of wages so, this case of employee dissatisfaction holds its roots way
back in 2010 and the retail market leader did not communicate this matter of to the “Fair
Works Ombudsman” till proper disclosure was made before the ASX. “Enterprise bargaining
agreement” is the principal law that started this investigation, so the main affected parties to
this under payment of wages were mainly the workers or staff who worked in the different
departments of Woolworth’s Supermarkets. This management accounting issue can be
termed as an absolute failure in the management of Woolworth as it was identified on
account of a complaint made from a staff and not out of the efficient management and this
caused wide spread resentment among the staff and at times reported high labor turnover for
Woolworth.
The main threats to the organization on account of such a massive management
accounting issue could be lack of motivation among the employees which will directly affect