264 Accounting: Business Reporting for Decision Making
corporate collapses in 2000. Many of these collapses were associated with poor financial reporting.
The ASXCGC released the first edition of Principles of Good Corporate Governance and Best
Practice Recommendations in March 2003. In 2006–07, the council undertook a review and
public consultation that led to the release of the revised Corporate Governance Principles and
Recommendations 2nd edition in August 2007, which was subsequently updated with amendments
in 2010. Eight principles are identified as underlying good corporate governance. One of these
principles, principle 4, relates to safeguarding the integrity of financial reporting.
Required
a. Discuss the recommendations in principle 4 of the ASXCGC guidelines for safeguarding the
integrity of financial reporting.
b. Access the JB Hi-Fi Ltd 2015 corporate governance statement in its annual report. Discuss the
company’s compliance with principle 4.
c. The 2015 annual report of JB Hi-Fi Ltd contains a Directors’ declaration. Identify the functions
and activities that are covered by the Directors’ declaration.
d. The ASXCGC adopts an ‘if not, why not’ approach to compliance with recommended cor-
porate governance practices. Explain what this approach means. How does this approach vary
with the approach adopted in the United States?References
Air New Zealand Ltd 2015, 2015 Annual financial report, http://www.airnewzealand.com.au.
Colquhoun, L 2013, ‘Capital ideas: bringing all the strands of corporate reporting together will help reduce the risk of short-
termism’, InTheBlack, 14 June.
David Jones Ltd 2013, 2013 Annual report, http://www.davidjones.com.au.
De La Merced, M 2012, ‘Groupon’s shares fall on revision’, The New York Times, 30 March.
De La Merced, M & Rusli, E 2011, ‘Accounting change cuts Groupon’s revenue’, The New York Times,
23 September.
Flight Centre Ltd 2014, 2014 Annual report, http://www.flightcentrelimited.com.
Hall, E 2015, ‘Qantas in profit turnaround through low oil price’, The World Today, 20 August, http://www.abc.net.au/worldtoday/
content/2015/s4296880.htm.
Janda, M & Morgan, E 2015. ‘Myer management defends lack of warning on surprise 23pc profit slump’, ABC News, 19 March.
JB Hi-Fi Ltd 2015, Preliminary final report 2015, http://www.jbhifi.com.au/Documents/Appendix%
204E%20and%20Annual%20Report%20-%202015.pdf.
Letts, S 2015, ‘Orica’s $1.65 billion write-down a disappointing but decisive action, CEO Alberto Calderon says’, ABC News,
7 August, http://www.abc.net.au/news/2015-08-07/orica27s-24165-billion-write-down/6680272.
Qantas Airways Ltd 2015, Annual report 2015 , http://www.qantas.com.au.
Rapoport, M 2015, ‘What companies strip out of “Non-GAAP” earnings: fines, exec bonuses, severance, rebranding costs.. .’,
Wall Street Journal, 8 January.
State Government of Victoria 2013, ‘Accounting and financial policy in Victoria’s public hospitals’, http://www.health.vic.gov.au.
Acknowledgements
Figures 6.2, 6.3, 6.5, 6.7 and 6.9: © JB Hi-Fi Ltd.
Reality check: Orica’s $1.65 billion write-down a disappointing but decisive action, CEO Alberto
Calderon says: © ABC News.
Problem 6.34: Flight Centre Ltd.
Decision-making activity 6.47: David Jones.
Decision-making activity 6.48: © Lachlan Colquhoun / InTheBlack.
Photo: © jsmith / iStockphoto.
Photo: © Tyler Olson / Shutterstock.com.