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ACC5502 Accounting and Financial Management: Stakeholder Theory


Question 1 30 marks

Retention of workers has been the main topic of interest in the media during 2020. Some organisations have come under scrutiny for inappropriate practices in terms of how staff were managed and protected during the COVID-19 event. In the past year there have been many reports in respected media outlets such as The Australian, Financial Review, The Guardian, Sydney Morning Herald, Courier Mail and other media outlets about the fact that some major retail and hospitality chains, have not complied with PPE requirements or supported staff as best they could financially and in terms of well-being throughout a difficult year. You are to select 2 organisations (one could be the organisation for which you work) and source 3 articles or reports for each toillustrate best and worst practice as they navigated 2020 and COVID-19. Use the information to answer the questions below:

(a) In the case of each organisation what were the circumstances that led to claims of lack of support of staff? 4 Marks

(b) Define Job keeper. What impact (if any) did Jobkeeper have on staff retention and wellbeing during this period for each organisation? 4 Marks

(c) In relation to the principles of business sustainability performance select three of these principles (for each organisation) which appear not to have been followed during 2020 and justify your answer with examples? 6 marks

(d) In terms of business sustainability theories, in particular stakeholder theory: List 4 key stakeholders of each organisation and discuss why they might be interested in publicity surrounding the organisation’s failure to manage staff interests correctly. 6 marks

(e) Discuss two ethical philosophies or theories that are relevant to business decision making and discuss how they have been applied in the organisations you have chosen as it managed its way through 2020. (max 300 words) 6 marks

(f) As a manager, and as a result of the readings and reports you have consulted to answer this question, what 4 points would you emphasise as you reflect on learning from an unusual year in 2020. 4 marks

Note: You must correctly reference or attach the articles you use to answer the questions.1 Mark

Question 2 38 marks

  1. 1. Define the terms ethical practice and corporate governance. Describe how they are related? 3 marks
  2. Provide and describe an example of where lack of correct ethical practice has led to poor corporate governance with implications for performance of an organisation in recent years. 3 marks
  3. Refer to the financial reports of JB HiFi Ltd for 2020 Answer the following questions:
  4. In terms of their corporate governance statement, what governs how they operate?1 mark
  5. For each of the following stakeholders give an illustration of a note or a section of the report that would be of interest and useful for decision making purposes. State why the information is useful.

(i) Suppliers to JB HiFi Ltd

(ii) Customers

(iii) Prospective investors

(iv) Australian Taxation Office 4 marks

  1. As per chapter 5 of the textbook the financial report obligations of an entity involve the preparation of four financial statements. What are they and describe what each is designed to report. 2 marks
  2. State the accounting equation in $ terms for JB HiFi at the end of the financial year. 1 mark
  3. What are the two largest sources of revenue for JB HiFi in $ terms? 2 marks
  4. How is this revenue measured? And when is it recognised? 2 marks
  5. What has shown the biggest increase in 2020 the online or instore sales and what information supports this. What implications (if any) has this for business going forward into 2021. 3 marks
  6. What is the biggest single expense item in $ terms for JB HiFi in 2020? 1 mark
  7. Provide figures to indicate whether cash flow at the end of 2020 improved or declined from 2019 and why? 1 mark
  8. What is the largest non-current asset the company owns and state its opening and closing net book value? 2 marks
  9. What method of depreciation is used to write off property, plant and equipment? 1 mark
  10. Does JB HiFi list any intangible assets? If so give one example. 1 mark
  11. List two current assets and two current liabilities of JB HiFi. Explain why monitoring the ones you have chosen is important. 2 marks
  12. Why do you think some items such as ‘borrowings’ and provisions’ appear as both current and non-current liabilities? 1 mark
  13. In terms of triple bottom line what information did JB HiFI disclose about the environmental and social dimensions of their performance? What does this tell you about the entity? 3 marks
  14. Which accounting firm audited the financial statement and what opinion was issued? 2 marks
  15. How are the operations of JB HiFi financed? 1 mark
  16. Would you invest in JB HiFi and why? 2 marks

Question 3 32 Marks

Happyland Toys commenced as a family business five years ago. In order to retire the owners have decided to sell their business. They present the following Balance Sheet for prospective purchasers at 31st March, 2020. You are interested in purchasing the business and take the

  1. The motor vans are at cost. Depreciation of $19000 has not been written off.
  2. The inventory is measured at cost price. Net realisable value is $38000.
  3. The business also has a bank overdraft of $4000 which has been included in the Loan
  4. The profit of $28600 is the reported profit for the current reporting period.
  5. The capital figure represents original capital contributed of 65000 plus profit for previous years.
  6. The goodwill figure was used to ‘balance’ the Balance Sheet.
  7. Interest Payable on the Loan of $3200 has not been recorded.
  8. GST Paid on Purchases of $3000 has not been recorded.


  1. Discuss the effect of each of the notes in terms of acceptable accounting practice and indicate what the actual figure in the Balance Sheet should be. 11 marks
  2. Prepare a new classified Balance Sheet which reflects more accurately the financial situation of the business. (Use the accounting equation OE = A-L to find the correct equity figure). 15 marks
  3. Discuss three limitations of the Balance Sheet as a financial report. 3 marks
  4. What other information would you need to access to make a decision about the viability or otherwise of Happyland Toys. List 3 things and say why they are important considerations. 3 marks


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