Topic: The Role of the Continuous Disclosure Framework
Disclosing entities are regulated by the Corporations Act (2001), Accounting Standards and ASX requirements. The continuous disclosure requirements in ASX LR 3.1 require timely reporting to the ASX of significant events and financial information that is likely to impact the price of the entity’s securities. ASX LR 3.1 contains an overriding general requirement to disclose information that a reasonable person would expect to have a material effect on price, however the rule includes the following exceptions:
- It would breach the law to disclose information
- The information relates to an incomplete proposal or negotiation
- The information comprises matters of supposition or is insufficiently definite to warrant disclosure
- Information is generated for internal management of the company
- Information is a trade secret
- A reasonable person would not expect the information to be disclosed
- The information is confidential and ASX has not formed a view that has ceased to be confidential.
Immediate notification to the ASX is required when particular instances occur (these are listed in LR 3.1) and includes:
- The fact that the entity’s earnings will be materially different from market expectations.
Part I (guide 500 words)
Using the consolidated financial statements of Surfstitch Ltd, comparing the 2015 and 2016 Annual Reports comment on:
- The recent financial predicament facing Surfstitch Ltd (1 paragraph).
- The 2015 Goodwill, The Investment in Subsidiary, the cash position and
- The 2016 Profit and Loss Statement with particular reference to Impairment costs, Selling & Distribution and Administrative expenses.
- Based on your analysis, and BEFORE knowledge of the recent share price decline and share trading halt, would you have recommended to your clients to buy, hold or sell Surfstitch shares? Why?
Part II (guide 1500 words)
After reading the attached documents, newspaper articles and research papers, answer the following question:
Why is it necessary to have a continuous reporting regime for disclosure entities and is it effective?
Do you agree? Why or why not?
Note, there is not one correct answer to this question. You will need to commence your research using the above three articles, and then supplement that with your own research. Check the marking scheme for further guidance.
Some useful journals include:
Academy of Accounting and Financial Studies journal
Academy of Accounting and Financial Studies proceedings
Accounting and business research
Accounting and finance (Parkville)
Accounting and the public interest
Accounting, auditing, & accountability
Accounting, auditing & accountability journal
Accounting forum
Accounting horizons
Accounting in Europe
Accounting, organizations and society
Accounting perspectives
Accounting research journal
Accounting review
Accounting standard
Accounting today
Advances in accounting
Advances in Accounting, Finance & Economics
Advances in international accounting
African journal of accounting, economics, finance and banking research
Asian Academy of Management Journal of Accounting & Finance
Asian journal of finance & accounting
Asian review of accounting
Asia-Pacific Management Accounting Journal
Australian accounting standard
Bank accounting & finance
British accounting review
Canadian accounting perspectives
Contemporary accounting research
Critical perspectives on accounting
European accounting review
International accounting bulletin
International journal of accounting
International journal of accounting, auditing and performance evaluation
International journal of accounting information systems
International journal of digital accounting research
International journal of intelligent systems in accounting, finance & management
Irish accounting review
Issues in accounting education
Issues in Social & Environmental Accounting
Journal of accounting & economics
Journal of accounting and finance research
Journal of accounting & organizational change
Journal of accounting and public policy
Journal of accounting, auditing & finance
Journal of accounting research
Journal of Accounting, Business & Management
Journal of bank cost & management accounting
Journal of business finance & accounting
Journal of contemporary accounting & economics
Journal of corporate accounting & finance
Journal of Financial Reporting & Accounting
Journal of international accounting, auditing & taxation
Journal of international accounting research
Journal of international financial management & accounting
Journal of management accounting research
Journal of modern accounting and auditing
Journal of public budgeting, accounting & financial management
Journal of theoretical accounting research
Malaysian Accounting Review
Pacific accounting review
Public accounting report
Qualitative research in accounting and management
Quarterly journal of finance and accounting
Quarterly Journal of Finance and Accounting
Research in accounting regulation
Review of accounting & finance
Review of accounting studies
Review of quantitative finance and accounting
