Please be careful with the question. Part 2 which consist of 40% is the actual assignment to be done. It is at the end of the page

Dick Smith Holding failure
Course Name
Course Date
Student’s Name
DICK SMITH HOLDING FAILURE        16
Letter of transmittal
Dear ____
Enclosed is the report you commissioned on ______ on the failure of Dick Smith holding.
The main findings of the report are:
· unethical means that was followed by the company which lead to the collapse
· Supplier’s rebate was one of the reasons for its collapse
· New management ambitious ways
I would like to acknowledge the assistance of _______, in writing this report.
Finally, I would like to thank you for the opportunity this report gave me to familiarise myself with the range of accounting software products and to work with the staff
Yours sincerely
Disck Smith holding Failure
Course Name
Course Date
Student’s Name
Table of Contents
Executive Summary
In today’s competitive world, the companies are adopting some anormous ways to grow in the market and capture the market. Many of them tend to adopt the unethical ways to grow and stay competitive in the market. The unethical ways can be through manipulation of their accounts or other aspects with which they can sustain in the market. But unethical ways really does not last long. The companies tend to collapse or get liquidated because of the unethical means which they follow.
The new management was made for the company after Woolworths had sold Dick Smith Holdings. Their motivation was monetary based and their actions in a very short period of time had a fast paced downward spiral of events. Management used accounting methods to manipulate their financial statements to make them appear better then what they actually were. This is known as “creative accounting”. Apart from the unethical ways that was followed by the company, the supplier’s rebate and the manipulation of the rebate and inventory also led to the collapse of the company.
It is important for the companies to follow the ethical path and ways to reach high in the market and not the unethical ways.
Dick Smith Holding failure
Introduction
In today’s competitive world, the companies are adopting some anormous ways to grow in the market and capture the market. Many of them tend to adopt the unethical ways to grow and stay competitive in the market. The unethical ways can be through manipulation of their accounts or other aspects with which they can sustain in the market. But unethical ways really does not last long. The companies tend to collapse or get liquidated because of the unethical means which they follow.
Dick Smith holding and its collapse
Background
The collapse of the Dick Smith Group was an event that occurred which not many people anticipated. The company was a strong and reputable business that was known for its quality electronic devices and was quoted as “One of the most iconic retail brands in Australia”. The company took off in the 1960’s by a young aspiring entrepreneur- Richard Harold Smith. His leap of faith in a six hundred and ten dollar investment (Keating 2016) was the beginning of what would soon be a multi- million-dollar company. The company opened up over two thousand stores in Australia and New Zealand and provided employment opportunities to many aspiring “Techxsperts”. After years of trading, few acquisitions, a private equity buyout and a new management system, the company later collapsed and went into voluntary administration nearly fifty years later. The role of accounting in this case is truly highlighted and shows how and why management engaged in earnings management practices. It emphasises how common unethical behaviour is in today’s society even in some of Australia’s most respected businesses. The repercussions of the collapse are also evident, outlining how different management teams are driven by certain motivators which can eventually result in a downward spiral of events.
Purpose of the Report
The purpose of the report is to analyze the reasons which lead to the collapse of Dick Smith holdings and what measures could have been taken by the company so as to ensure that the company would have lasted long.
Research Methods
As the research is based on the external data and the links which are available online. I have focused on analysing the report purely on the basis of secondary data. In this, I have focused on researching through different websites as well as different journals to analyze the data and different events which had led to the failure of the company.
Discussion
Accounting Aspect in the collapse of Dick Smit holding
This particular accounting subject focuses on the theoretical aspect of the accounting profession. Over the weeks we have been educated about the importance of ethics and international accounting, the development of accounting theories, codes of conduct and the importance of following the conceptual framework and legislations. We have also explored the creative side of accounting, which essentially leads to the big issue of earnings management. The collapse of Dick Smith can be linked to each of these aspects. In recent times, society has created a demand for ethical practices to be at the forefront of any entity. The accountant plays a large role in any business. Financial accountants are “responsible for periodically reporting pecuniary information to business owners” (Davoren, n.d). International accounting standards have been created in the attempt to achieve consistency among nations and therefore the conceptual framework should be used when preparing financial statements. As a result of the Dick Smith case, the accounting profession has questions to confront (Malley, 2016) as to why particular accounting methods were able to mislead the stakeholders and why the business came crashing down so quickly.
We can make connections between the motivations of Dick Smith’s new managers and how this ultimately led to the end of such a monumental Australian company. The founder- Dick Smith was an influential man with many talents. In the article ‘Richard Harold ‘Dick’ Smith’: the author reflects on an annual poll conducted by Readers Digest. This group publicly ranks Australia’s top one hundred most trusted individuals and coincidently, Dick Smith is ranked within the top ten each year. The article also describes Smith as a businessman, entrepreneur, environmentalist, activist and as an advocate for Australia and all things Australian. His core values were seen in every aspect of work he undertook. He started his electronic business with minimal financial support but a great deal of perseverance and once he sold his company, it was stripped down to make a buck for new management- whatever the cost was.
Events on the sale of the company
When Smith sold his company to Woolworths, the fruitful relationship lasted nearly thirty years and was an integral part of Australian society. However, when Woolworths undertook a restructure within their organisation, a...