Provide a brief discussion of what is meant by the term “corporate governance”.

Accounting
Paper, Order, or Assignment Requirements

This assignment comprises THREE (3) questions.

This Assignment is designed to give you an opportunity:

demonstrate applied knowledge of the accounting regulatory environment and the accounting and finance processes, systems, concepts and techniques used globally in business practice
appreciate ethical frameworks and codes of practice and their application to accounting and finance outcomes to help comprehend and address complex ethical dilemmas
This assignment comprises THREE (3) questions.

Question 1: (25 Marks)

Provide a brief discussion of what is meant by the term “corporate governance”. Include in your discussion the various regulatory influences on public companies in Australia in relation to corporate governance. Also provide your opinion whether Santos exercises good corporate governance and list possible strengths (3) and weakness (3) of corporate governance at Santos Ltd with clear reasons as to why you have identified them. (10 Marks)
What is Triple Bottom Line Accounting? What indications or examples can you find in the reports to indicate that Santos is delivering in terms of the Triple Bottom Line. Give at least two examples for each. (8 Marks)
In your opinion how is the company performing? How do you justify this assessment of performance? What external factors might impact the performance of this company. (Note 5 clear explanations should be given) (7 Marks)
(maximum number of words: 700-800)

Question 2: (60 marks)

Founded in 2010, Instagram considers itself to be “a fun and quirky way to share your life with friends through a series of pictures.” By downloading the free Instagram mobile application (or app), users snap a photo with their mobile phone, then choose a filter to transform the image, and can share it on various sites such as Facebook and Twitter. The company views itself as more than just a photo-storage tool but a way “to experience moments in your friends’ lives through pictures as they happen. We imagine a world more connected through photos.”

In April 2012, the 13-employee company was acquired by social networking giant Facebook for approximately $1 billion. In less than three years, Instagram has become one of the fastest growing social media platforms as seen by its estimated 12 million daily users

In December 2012, several months after being acquired by Facebook, Instagram announced new changes to its privacy policy and terms of use. According to the updated terms, “a business or other entity may pay Instagram to display users’ photos and other details in connection with paid or sponsored content or promotions, without any compensation to you,” and there was no apparent option to opt out. The backlash was immediate. Photographers and celebrities were particularly upset, given that their photos were a part of their own businesses and brand images.

Instagram was quick to respond that its intention was simply to improve advertising. Co-founder Kevin Systrom posted, “Our intention in updating the terms was to communicate that we’d like to experiment with innovative advertising that feels appropriate on Instagram. Instead it was interpreted by many that we were going to sell your photos to others without any compensation. This is not true and it is our mistake that this language is confusing. To be clear: it is not our intention to sell your photos.”

Instagram’s privacy policies and terms of use were once again updated in January 2013. The current terms state, “You hereby grant to Instagram a non-exclusive, fully paid and royalty-free, transferable, sub-licensable, worldwide license to use the Content that you post.” Instagram also reserves the right to share users information (including analytics information, log files, cookies, and location data, as well as the content users post) with companies affiliated with Instagram (mainly Facebook), third-party service providers, third-party advertisers, and “other parties.”

While the initial backlash against Instagram has been quelled, there is still uneasiness among users regarding privacy issues. Instagram has to walk a fine line to keep its users happy and still turn a profit. On one hand, Instagram offers a free service to users, which up until this point has been free of advertisements, unlike other social media platforms like Facebook. In order to remain a viable company, Instagram has to bring in revenue somehow, and advertising seems the obvious choice.

Required:

Relying on two ethical theories, discuss how Instagram failed to comply with these theories in deciding to change its terms of service.

(maximum number of words: 1500-1600)

Question 3: (15 marks)

In each of the following situations, identify whether the item should be included in the balance sheet of Transom Trading as at 31 December 20×1, and, if so, at what amount and under which heading. Transom Trading is retailer of motor parts and accessories. In all cases, brief reasons for your decision must be given (Note that you are not required to prepare the accounting transaction).

A freehold shop was bought in August 20×1 for $176,000. A mortgage of $60,000 was taken out to buy the shop in August 20×1 and the balance paid in cash
Goods on the shelves at the end of the day of 31 December 20×1 have a resale value of $24,000 and were purchased by Transom for $16,000
iii. A delivery van, costing $12,000, which Transom ordered on 20 December 20×1 was delivered and paid for by cash on 12 January 20×2.

Shop fittings worth $6,000 were bought at an auction by Transom for only $3,000 cash prior to opening the shop in August 20×1
A Ford Falcon costing $7,000 was bought by the owner of Transom through the business in November 20×1 for his wife’s use. He did this because the Ford Falcon he had bought privately second hand in September for $8,000 was being used exclusively for collecting and delivering goods for Transom and not as a family car, as originally intended
One cash register was rented from Equipment Supplies at an annual rental of $400
vii. One cash register was bought by Transom in November 20×1 for $1,200

viii. A bank overdraft was drawn down to $13,000 on 31 December 20×1

Seat belts which the owner of Transom bought for $12,000 in September from a market trader in good faith were subsequently found to be defective and worthless
Staff wages of $1300 were paid with PAYG tax equally $120

 

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