Unit:
Submission Date:
Weighting: Instructions:
ACC307–Accounting Theory
6 Dec 2014 before 4.00 pm
The assignment is worth 40% of the total unit weight.
Students are required to complete three case studies.
Your answer must be both uploaded to Moodle in word file and
handed over a printed copy with signed coversheet.
You need to support your answers with appropriate Harvard / APA
style references where necessary.
Only include information in your appendixes that has been
directly referred to in the body of your document.
Include a title/cover page containing the subject title and code and
the name, student id numbers.
Please save the document as ACC307AT1_first name_Surename
_Student Number Eg:ACC307AT1_John_Smith_20140000
1
Case Study 1 (1000 words)
Read the following article titled“Government names 250 carbon tax paying firms”and answer the following questions:
Whichtheoryofregulationcanbeusedtoexplainthegovernment’scarbontaxpolicy?
Do you think Independent MP Rob Oakeshotthas been “captured” by businesses in rejecting a
floor price on carbon?
Which theory of regulation can be used to explain the actions of Former NSW premier Kristina
Keneally to urge Prime Minister Julia Gillard to dump the carbon tax policy?
Companies such as ALCOA, BHP Billiton, Boral and La Trobe University are among about 250 companies that will pay the carbon tax when it is introduced on July 1.
The Clean Energy Regulator has today published an initial list of 250 ”liable entities” that will face the $23 per tonne tax. However, a further 80 companies have also notified that they are likely to face the new tax in the 2012 2013 financial year.
It says these companies and facilities will account for more than 95 per cent of emissions covered by the carbon price mechanism. The list will continually be updated.
Other entities listed by the regulator today include the Brisbane City Council, BlueScope Steel, the City of Armadale, Rio Tinto and Thales.
The government has been estimating that about 500 companies would pay the carbon tax.
“I think we’ll come in underneath 500 but it is a matter for the regulator to determine,” Climate Change Minister Greg Combet said.
Mr Combet said the initial list was based on greenhouse emissions reporting by companies over the last four to five years.
Oakeshott threat
This comes as Independent MP Rob Oakeshott is threatening to block a key element of the government’s carbon scheme.
Mr Oakeshott was a member of the multi party committee that developed the scheme but says he wants the floor price on carbon scrapped because it will harm business.
The Member for Lyne said he may vote against regulations to introduce a floor price because he wanted businesses to have the flexibility to buy cheaper carbon permits overseas when the emissions trading scheme is introduced.
“It is certainly one of the options, as is reconvening the multi party climate change committee and trying to renegotiate some of the aspects,” he told the ABC.
The carbon tax is due to come in on July 1. It will operate at a fixed price for three years before moving to an emissions trading scheme in 2015. But even then, there will be a floor price to limit how low it can go until 2018.
Mr Combet said he spoke to Mr Oakeshott about his position last night and they would continue with discussions, but that the independent’s views were no surprise.
”This has been his position,” Mr Combet told reporters in Canberra.
Government names 250 carbon tax paying firms
2
”His view was always that the sooner we get to a fully flexible price the better.”
Future issue
Prime Minister Julia Gillard said that the floor price was a question for the future.
”Making a regulation about a price floor will happen at some time in the future,” she told reporters in Melbourne today.
”We are consulting on how to do the floor price and there’s certainly no rush in that process.”
But the Greens argue scrapping the floor price would hurt both business certainty and action on climate change.
“Speculation about disallowing the floor price regulations sends a strong signal of uncertainty to business and, because of that, I will be asking Mr Oakeshott to reaffirm his commitment to the climate package as negotiated,” Greens leader Christine Milne said in a statement this afternoon.
“Mr Oakeshott understands that the Climate Change Committee negotiated a package as a whole where each element has impacts on all others.”
The week the government had faced continued criticism of the carbon tax from both the Coalition and Labor members.
Former NSW premier Kristina Keneally who went to the state election last year in support of the carbon tax urged Ms Gillard to dump or “dial back” the tax in a bid to save herself at the next election.
by Judith Ireland, Sydney Morning Herald, May 4 2012
Case Study 2 (1000 words)
Sustainability on mining forum agenda
Read the article “Sustainability on mining forum agenda” and use both Legitimacy Theory and Stakeholder Theory to explain why the gold mining industry will emphasise the sustainability issue in the forum.
A forum starting in Western Australian gold mining city Kalgoorlie today will examine the importance of sustainability within the resources industry.
The inaugural Sustainable Mining Conference will hear from a number of gold mining industry representatives over three days.
Forum chairman Morrie Goodz says the aim is to develop plans to ensure the long term future of the mining sector and maximise benefits to both companies and the community.
“This is done by careful planning and communication between all the stakeholders,” he said.
From ABC news, August 17, 2010.
3
Case Study 3 (1000 words)
Read the article ‘Life’s sweet: $4m for CSR chief’ and answer the following questions:
ApplyingAgentTheoryandPositiveAccountingTheory,explainhowdidCSRprovideboth short term and long term incentives to the executives and make sure their interests is aligned with those of shareholders?
A large component of Mr Brennan’s remuneration package is holding CSR shares. What problems are associated with this reward scheme in Mr Brennan’s case?
On July 12011, a ‘two strikes’law came into effect. This law is designed to hold directors accountable for executive salaries and bonuses. It means an entire company board can face re election if shareholders disagree with how much executives are being paid.
CPA Australia made a submission to the Australian government and suggested introducing a ‘two strikes’ test as a replaceable rule to give greater discretion to its application.
Evaluate the role of the new legislation, the Australian government, CPA Australia from a critical perspective.
Life’s sweet: $4m for CSR chief
CSR chief executive and managing director Alec Brennan has been rewarded for boosting earnings with a hefty 43 per cent pay rise this year to $4.1 million, up from $2.9 million in 2004.
Mr Brennan received $1.16 million in salary, $715,000 in short term bonuses and $1.6 million in long term incentives for the full year ending 31 March, compared with his total package of $2.9 million last year, which included $600,000 in shirt term incentives and 393,018 in long term bonuses.
Mr Brennan, who joined the sugar, building and construction materials company in 1969, hadincreased the company’s net income by 79 per cent to $287 million.
The earnings lift came as sugar demand soared in Asia where a two year drought in India and Thailand hot sugar crops and helped drive up raw sugar prices. Sugar earnings more than doubled to $89.8 million from $37.6 million a year ago.
Mr Brenan became managing director in 2003 after the company split with cement producer Rinker, leaving CSR with sugar, building materials and aluminium business.
At the time of the demerger CSR’s market capitalisation was $ 1.5 billion. In two years it was frownto more than $2.2 billion.
Mark Ebbinghaus of UBS said CSR had performed strongly in a challenging market for the building materials company which also faced volatile sugar prices.
‘Mr Brennan’s performance has exceeded expectations. He is known for running the business verytightly and is respected as a long sighted chief executive.’
The company explained that the majority of Mr Brennan’s remuneration is ‘dependent on increasing shareholder value’.
4
‘Short term incentive rewards performance in a given year– CSR’ net profit before significant items was up 25.3 per cent $201 million (including significant items it was up 79 per cent to $287 million). Cash flow was also up 10.5 per cent to $321 million and dividend increased to 12c from 11c. Alec has chosen to acquire CSR shares with his total short term incentive of $715,000 for the year.
‘A long term incentive of 750,000 shares (1.6 million) was purchased during the year as CSR’s totalshareholder return (share price plus dividend) was in the top quartile of companies in the ASX 200 accumulation index.’
The company stressed that all shares purchased under the incentive scheme were bought on marketand ‘therefore not dilutive to shareholders’.
Mr Brennan now had 3.1 million CSR shares.CRS’s shares rose 1c to close at $2.6 yesterday.The Australian, 16 June 2005
5
horngren9ce g….pdf
Management Ac….docx
