Accounting Theory and Analysis of Curtin University: Virgin Australia (Term Paper Sample)

Virgin Australia
Table of Contents TOC \o "1-3" \h \z \u Section-A: Multiple Choice Questions PAGEREF _Toc431838588 \h 2Section-B: Essay Writing: PAGEREF _Toc431838589 \h 2Introduction: PAGEREF _Toc431838590 \h 2Analysis of the Statement: PAGEREF _Toc431838591 \h 2Role and responsibility of Committee PAGEREF _Toc431838592 \h 4Conclusion: PAGEREF _Toc431838593 \h 4References: PAGEREF _Toc431838594 \h 4Section-C: Research Analysis: PAGEREF _Toc431838595 \h 4Ans.-1: PAGEREF _Toc431838596 \h 4Ans.-2: PAGEREF _Toc431838597 \h 5References: PAGEREF _Toc431838598 \h 7
Section-A: Multiple Choice Questions
Ans.-1: c) KMPG charged $734,000 in non-audit service fees
Ans.-2: c) 70.06
Ans.-3: b) Maintaining adequate banking facilities
Ans.-4: d) All of the above
Ans.-5: d) All of the above
Ans.-6: c) John Borghetti
Ans.-7: d) All of the above
Ans.-8: d) None of the above
Ans.-9: d) None of the above
Ans.-10: d) All of the above
Section-B: Essay Writing:
Here in this essay section I am going to discuss whether the corporate governance practice of the disclosure requirement in the annual report 2014 of Virgin Australia Holdings is poor or not.
Introduction:
As per the annual financial report of Virgin Australia Holding Limited company outlines the main corporate governance policy and practices applied throughout the financial year 2014, and required disclosure in this regards has been made. ASX corporate governance council recommendations support the corporate governance policy of the company and disclosure requirement practices. However, if an investor analyzes the entire financial report and making comparison with the other company’s financial report then, the quality of disclosure can be identified, the detailed analysis of the corporate governance practice of the company can be verified as under.
Analysis of the Statement:
Virgin Australia has total 8 principal for corporate governance. Principal 1 is related to laying of foundation for management and oversight. For this principal Virgin Australia have three corporate governance documents (P.1, Corporate Governance statement). For proper management it issued document with the name of Board charter which describe the responsibility of senior management and role of senior management in strategic guidance. The corporate governance requirement has been applicable to any organization by the virtue of corporations act and such organization must adhere to its provisions mandatorily. Corporate Governance generally levies the responsibilities on the top management of the company and special committee which has been framed for looking after the special business policy of the company; for example Internal Audit Committee. Board committee is also established for audit and risk management, remuneration, management and nomination and safety and operational committee. They conclude in the board meeting to maintained minimum 50% female in board. Hence maintenance of 50% female in board is one of the best steps of the company to grow female participation.
Second principal of corporate governance is about the structure of board where Virgin Australia targeted to increase the value of board composition, which describes the independence of board for proper decision for the organization. Nomination committee of virgin recommended the size and composition of board for election and reelection of director in committee.
Third principal of corporate governance of organization for ethical and responsible behaviors of committee and management of organization, it describes the code of conduct which directors and management should use while they serve their service to the origination. Code of conduct of Virgin includes the equal employment opportunity for nullify the partiality in the organization, Matter related to EEO policy in the workplace for effective working of workers of the organization. It also includes the gift policy which defines the parameter for acceptance of gift. In the code of conduct of the organization includes the whistle blower policy for any wrong done with the employee and protect their right. It also describes the security trading policy which binds all the employee and directors of the group for non involvement in trading of security of VIRGIN (Sustainability document, N.D). It bound for all the related person of the company to trading only in case of open or week period only. Nominee director protocol of code of conduct describes the protocol provided to nominee director of the organization.
Fourth and fifth principal of corporate governance of organization is about the safeguarding of corporate reporting. It describes the methods of preparation of financial statement and integrity on the financial statement, the internal and external function of audit, the risk and risk profile and compliance with legal function, regulatory requirement and policy of the organization. It regularize under the Section 295A of corporation Act, 2001. It also describes the process of attendance of external auditors in the board meeting of company.
Sixth principal of corporate governance is about the respect of right of security holders.
Seventh principal of corporate governance is about the recognition and management of risk. It describes the risk management system for the origination. For recognition of risk, Virgin forms the committee of safety of operational risk review. It describes the safety, health and security risk for maintenance of safety and internal control in the organization. As per the risk management framework of the New Zealand on risk management 31000:2009, audit of company should be reviewed annually. It also describes the policy for internal audit in the organization.
Principal eight is about the responsibility of remuneration committee, which describes the remuneration structure in the organization. It also describes the hedging arrangement in the organization. So, overall corporate governance of Virgin covers all the area of corporate governance for proper management and proper governing. Company has formed the committee for review of all the policy and procedure describe in the corporate governance document. Committee includes the independence director and non executive officers of the organization ( Michel Janda, 2014).
Role and responsibility of Committee –
Audit and Risk Management Committee - It assesses and reviewed the integrity of financial reporting. Audit risk and management committee is also responsible for, monitoring and evaluation of performance of external and internal audit, including qualifications of the audit report, independence of external auditor and audit fee for internal as Ill as external audit. They also reviewed the risk of management processes, policies and profile, including the appropriateness of insurance cover.
Remuneration Committee – It control and check the remuneration of directors. Make policies for employee on superannuation. Recommend to the Board for diversity objectives.
Nomination Committee – Responsible for nomination of member in the board for planning and ongoing development of organization.
Safety and Operational Risk Review Committee – This committee is responsible for check the safety and security in the organization. They monitor the serious kinds of investigation in the company.
In the same manner virgin formed the committee to review the policy and adoption of policy by management in routine working. Corporate governance document describe the procedure, policy and rules should be followed by the Virgin in working and their application routine business.
Conclusion:
There are various stakeholders associated with an organization having made investment in the entity, so corporate governance policy is also beneficial for those groups having interest in the organization. Therefore Corporate governance document which has been formed by Virgin is Ill developed which covers all the area of governance like employee benefit, security measure and risk assessment. Corporate governance describes the committee responsible for review of policy issued by company. Corporate governance is important for the organization as it helps to find mitigate the problem which is nearly occurred in the business like employee problem, remuneration problem, risk and security issue and stakeholder’s issues. So, based on such analysis I am not in agreement with the statement given for poor corporate governance adherence by Virgin Australia and little disclosure of required information.
Section-C: Research Analysis:
Ans.-1:
There are certain disclosures in the annual report of the company required to be made which specifically address to stakeholders of the company. There are certain factors of assessing the materiality of the impact of such factors to stakeholders required to be considered in the annual report of the company and required to make disclosure in the annual report about the impact of such material factors as per the corporate governance practice.
Example-1:
Stakeholders are affected by the business of company in the different areas like impact on the society and community, effects on the environment, the safety areas, etc., the stakeholders theory explains the impact of materiality with which such the business of the company is going on. The annual report of Virgin Australia Holdings identified by the airline stakeholders the following area and different factors; e.g.; the environment area covers reduction of climate changes, recycling of the waste and other resources of the organizations, control in the noise of the aircraft, etc. So far as commercial factors are Concern Company giving assurance on the quality of product, on time performance in the service, customer satisfaction, growth in the financial performance of the company, etc. The safety areas of th...