Accounting Analysis of Murray River Organics (ACC3AUD) Report

This report presents an accounting analysis of Murray River Organics (MRO), a prominent Australian organic food company. The analysis covers MRO's operations, including its product range, sales channels, and financial performance in 2018. It examines the company's compliance with ASX Corporate Governance principles, particularly Principle 4, focusing on the integrity of corporate reports. The report references the 2018 annual report to assess the audit committee's structure, the disclosure of financial information, and adherence to accounting standards. Key areas of focus include the company's retail, wholesale, and export sales, the impact of acquisitions, and the verification processes used to ensure the accuracy of financial statements. The report concludes that MRO generally complies with the specified corporate governance principles, based on the information available in the annual report.

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Accounting Analysis

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Running head: Accounting Analysis
Table of Contents
Answer 1..........................................................................................................................................3
Answer 4..........................................................................................................................................3
References........................................................................................................................................5

Running head: Accounting Analysis
Answer 1
Murray River organics is one of the most renowned firms of Australia which is involved in
growing, manufacturing, processing and selling of organic food products. It started its operations
in the year 2010 in Merbein, Victoria. At present it is operating over 4900 hectares of land and
holds the largest organic dried vine fruit properties in Australia. The areas of operations include
providing extensive range of organic products which is packed and distributed from the food
manufacturing and distribution facility in Dandenong in South, Victoria (Murray, 2018).
MRO group provides its products majorly to the customers through four channels including
National retail, wholesale and industrial, export and fresh fruit holding 71%, 13%, 9% and 7%
sales respectively in the previous year. In the year 2018 retail sales was decent but the wholesale
and industrial trade went below expectation due to inventory accuracy issues. Dried fruit sales
increased by 38.4% but faced quality issues. Even the sales of fresh fruits were less than sales of
2017. Citrus sales increased by $1.778 million from the previous year due to acquisition of the
Nangiloc property in 2017. Majorly the citrus sales are from Nangiloc, Colligan and Gol Gol
farms (Murray, 2018).
The other area of operation includes sales of organic products wholesalers who further supply the
dried vine fruit to the producers of bakery products, cereal products and confectionary. It also
exports its fresh fruits like wine grapes, table grapes and citrus across Europe, Asia and the US to
the producers of wine (Kieso, Weygandt & Warfield, 2019).

Running head: Accounting Analysis
Answer 4
According to Principle 4 of ASX Corporate governance principles and recommendations there
should be appropriate process for a listed company to substantiate the integrity of the reports of
the companies. Recommendation 4.1 focuses on having an audit committee chaired by
independent director and should disclose all the material facts relating to the committee
including its charter of the audit, qualification of its board members and number of meetings
hold by the committee and members attending it (Zeff, 2016).
Recommendation 4.2 suggests that the board of the listed company should check that the
financial statements comply with the accounting standards and provides clear and fair picture of
financial performance of the company.
Recommendation 4.3 focuses on disclosing its processes to verify the integrity of the corporate
reports if it is not audited or reviewed by external auditor. As per the annual report 2018, the
director report provides full disclosures of charter, qualification and experience of members of
the audit committee. Andrew Monk is being the chairperson of the audit committee. Under the
section directors meetings it discloses the number of meetings held and attendance of members
(Murray, 2018).
The financial performance of the company stated in review of operations fully comply with the
generally accepted accounting standards stating clear facts relating to net profits, depreciation,
working capital, cash flow etc. It has fully disclosed its processes in notes to financial statement
to verify the integrity of reports. Therefore we can conclude that according to annual report
released by Murray River organics is complying Principle 4 of ASX corporate governance
principle (Libby, 2017).

Running head: Accounting Analysis

Running head: Accounting Analysis
References
Kieso, D. E., Weygandt, J. J., & Warfield, T. D. (2019). Intermediate accounting. John Wiley &
Sons.
Libby, R. (2017). Accounting and human information processing. In The Routledge Companion
to Behavioural Accounting Research (pp. 42-54). Routledge.
Murray, (2018). Annual Report. Retrieved from
https://www.murrayriverorganicsinvestors.com.au/resources/pdf/MROG_Annual_Report
_2016_2017_5.0_single_pages.pdf
Zeff, S. A. (2016). Forging accounting principles in five countries: A history and an analysis of
trends. Routledge.