Corporate Governance and the 2012 Failure of the Hastie Group (Asx)

2780 Words Jun 9th, 2013 12 Pages
Title: Corporate Governance and the 2012 Failure of the Hastie Group (ASX)

Assignment Topic:
An outline of, and brief discussion of the importance of, the bases or criteria for the review of the organisation’s governance (eg, refer to which standards or guiding principles are relevant for the review) and why you need to use them.
A brief critical review of the relevance of concepts, principles, standards or other tools and techniques learnt during this subject, in conducting your review
A list of recommendations for improvement based on your review

Word Count: (Introduction to Conclusion) 2,445

Executive Summary:
Hastie Group was an ASX listed Engineering Group that entered into voluntary administration on May 28th 2012.
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Further University of Melbourne Commercial Law Professor Ian Ramsay suggests in his interview with ABC News on May 30 2012 (http://www.abc.net.au/news/2012-05-30/deloitte-faces-questions-over-hastie-collapse/4040850 Last viewed March 16 2013) that there was a lack of supervision and integration of businesses post acquisition.
It would be reasonable then to assume that the Code of Business Conduct was not appropriately fostered throughout the group and a culture less desirable that what existed in the Code of Conduct. This seems to have manifested in a ‘culture of ignoring bad news’ identified by PPB Advisory (Carson, Crosbie & McEvoy 2013, p14) and a repeated misstatement of the values of assets and liabilities that culminated in acts that concealed losses of almost $20million are most likely fraud in the Hastie Services North business unit.
‘Principle 4 – Safeguard integrity in Financial reporting’ (ASX 2010, p27)
Principle 4 discusses the need for a structure to independently verify the integrity of financial reporting, this includes but is not limited to establishing an audit committee and processes

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