IndexDiscussions: ABC Learning Company: Liquidation Events: HIH Insurance Company: Liquidation Events: One.Tel Phone Company: Liquidation Events: Ethics and Governance of Corporate Financial Stress: For ABC Learning: For HIH Insurance: Per One. Telephone Company: Impact of Liabilities in Case of Company Liquidation: Conclusion: REFERENCES: In general, when a company is unable to meet its short-term and other liabilities and becomes insolvent, the best way to obtain above is in liquidation or liquidation. Through liquidation, the sale of company assets for the purpose of paying liabilities. Using this procedure the creditors of that company get a share of their debts. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get Original Essay Australia is considered one of the fastest growing countries when it comes to financial status, although in recent years the Australian business sector has observed the failure of many industries. The main reason behind such collapse or liquidation is insolvencies, due to unfavorable market conditions, low profit ratios or high debt-to-equity ratios which led to the company being unable to meet its liabilities to its customers. creditors. Some of these companies are like ABC Learning Corporations, HIH Insurance and One.Tel Phone Company etc. This report presents the reason for the collapse of Australian companies ABC Learning, HIH Insurance and One.Tel Phone Company, alongside the report will include the discussion on business ethics and governance with respect to financial ownership of the business. Ethical issues are the most significant factors for organizations because they impact overall business activities to maintain sustainable growth (Crane, 2019).Discussions: ABC Learning Company: ABC Learning Corporation was founded by Eddy Groves and his wife Le Neve in the year 1988 in Australia. In previous years it had almost 697 centers and was named the largest child care operator in 2005. The company earned in the year 2004-2005 almost 2.7 million in revenue and up to 0.3 million in net profit , however this company went into liquidation in the year 2008 (Splash, 2019).Liquidation Events:According to reports, the company went into liquidation in 2008 after selling around 60% of its business to Morgan Stanley at aimed at repaying the debt accumulated around rdaddphp.5 million. In 2007 the organization faced a 42% drop in its profits and in due course failed to meet obligations amounting to rdaddphp.8 billion, causing a huge drop in the price of market shares. Due to non-payment of creditors and inability to make sufficient profits in the financial year 2007-2008, the share price of this company has been limited. HIH Insurance Company: This company was founded in 1968 by Ray Williams, which was named as the second largest insurance company in Australia and operated in several geographical territories such as USA, Asia, UK and several other regions with total assets equal to almost 27 in 2000. But for some obvious reasons the company went into liquidation in 2001 according to a scheme of arrangement (Splash, 2019). Liquidation Events: This company went into the provisional liquidation procedure that accompanied group companies and subsidiaries in 2001. This was considered one of the largest collapses in Australia with near loss of 0.3 billion. According to the report the business network has been accused of different types of fraud and some of its members are alsoaccused of imprisonment. In the year 2000-2001 the company faced a huge decrease in its net worth, valued from billions to 3 million. It was also found that slight changes of 1.7% in assets could lead to deficiencies in the company's financial position. According to the official liquidator's report the loss suffered by the company in 2000 was around 0 million and was the main reason for the collapse of this company. One.Tel Phone Company: is a telecommunications company based in Australia and established in 1995. It has been notified as the fourth largest company in the telecommunications industry that uses 3GSM 1800 network system for its operations. The company had a strong customer base of approximately 2.2 million and revenue of nearly 3 million between the periods of 1998-2000 (Splash, 2019). Liquidation Events: Due to huge losses of around 1 million, this telecom company went bankrupt in the year 2001 and its stock price fell below rdaddphp. The company has also faced some problematic circumstances at a time when it is in a situation of huge financial losses. As a result the company sold its shares for only file=php/clean_code.php.5 million and entered liquidation proceedings in 2001 due to huge losses and insolvency. There are various reasons for the liquidation of a company, but the most obvious reason is the inability to repay creditors. Sometimes many organizations may collapse after achieving their main objectives. The main reason behind the liquidation of the three above-mentioned companies was the financial difficulty which resulted in them having to face huge losses and a decrease in the market price of the shares. Ethics and Governance of Financial Stress of Companies: Ethics and governance are considered as the most important and fundamental factors to make an organization run smoothly and safely. Ethics and morality are the values ​​that the organization must exercise for correct functioning and for decisions regarding profit maximization and sustainable growth. Whereas governance is used to establish rules and procedures to manage company policies and activities along with legal rules. To carry out the business function safely, correctly and ethically, various governing bodies and committees are formed. Ethics and governance play an important role in maintaining financial information regarding revenues, liabilities, expenses and invested capital. Per ABC Learning: In 2008 the company faced a huge financial loss and was unable to make payments to its creditors, thus resulting in the company's liquidation situation. In the 2007 financial year the company faced a 42% profit loss due to business management and governance problems. Its stock price has dropped to rdaddphp.15 since 2008. One of the main reasons behind such collapse was the failure to build a strong and effective business model as required for financial businesses. The company should maintain the accounting standards and principles by disclosing the tangible and intangible assets of the company as per value, also the auditors of the company submitted an unqualified report opinion on the financial statement which had many accounting issues. It was the management that maintained the principles and norms in case of maintaining the financial statements. All financial transactions and relationships should be adequately disclosed in the financial statement, however ABC Learning has failed to maintain this disclosure principle. Organizations do not properly disclose the fair value of assets and the amount of net profits, inin other words, the company does not disclose transparency in the case of maintaining the financial statement. The company discloses in its financial statements the goodwill valued at 7 million for the two-year period 2007-2008 while highlighting impairment charges amounting only to file=php/clean_code.php million. It can therefore be concluded that the company has not maintained ethical behavior in the preparation of accounting data for related parties. Governance is one of the important factors that have a strong impact on the growth of companies. It is necessary for every company to maintain governance policies while carrying out its business functions. However, ABC learning did not maintain such policies in case of business performance, even though it classified current liabilities as non-current liabilities (Splash, 2019). For HIH insurance: Lack of ethical and governance ways in business resulting in huge shortfalls in the company's profitability. Due to the loss of 0.3 billion in the financial year 2000-2001 the company was put into liquidation. The main reason for such loss is the lack of compliance with primary ethical and governance policies. The company also faced many problems in a competitive market situation while carrying out its operations. According to governance policies, business assets should be reported at fair value, but the company has failed to maintain these policies. Likewise, the company fails to maintain ethical standards by performing sound accounting practices. The company also shows some unethical practices by disclosing the value of its assets at a lower value and also providing false information to stakeholders, some unfair practices regarding investment and dividend policies, etc. These are considered one of the main reasons for the collapse of organizations (Splash, 2019). For One.Tel Phone Company: There were some ethical issues related to One Tel Phone company. The ethical issues concerned the unethical practices used by the company in case of creative accounting and insider trading. The company had a conflict of interest between EY and a telephone company and between its own interests with its own personal ego which created problems. It was also found that there were no personal and professional qualities of integrity and independence in the organization. The company suffered from ethical problems as its provision for bad debts was almost 38%. He also underestimated bad debt. The company has created ethical issues in terms of returning money from abroad in order to hide its financial information. In the case of corporate governance of the company it can be seen that a telephone company had a very poor board structure. Most investors were not interested in running the company. There was also a very poor reward system and poor customer management. The company failed to use a principled approach. There was also lack of regulatory framework and rules and regulations of the society which led to poor governance of a telecom company (Splash, 2019). Impacts of responsibilities in case of company liquidation: While carrying out accounting transactions, the company should also follow ethical principles such as governance policies in a correct manner. Normally an organization goes into liquidation while it is unable to accurately pay its creditors' liabilities and some other short-term liabilities and is considered insolvent. As a definitive solution regarding the payment of creditors resolve through company liquidation procedures. Therefore liabilities have a large impact on settlements. ForABC Learning: The company went into liquidation in 2008 because it was unable to pay the amount owed to creditors due to lack of profits in that financial year. The market price of companies' shares also decreased in that particular year. Therefore, failure to pay the liability amount creates a strong impact on the liquidation of ABC Learning. For HIH Insurance: This company was subjected to liquidation proceedings in 2001 when it was revealed that the company was involved in many unethical ways related to the financial sector and also in maintaining governance policies. The company does not make all payments relevant to its continuation. Therefore failure to pay the liability amount had a great impact on the liquidation of companies. For One.Tel Phone Company: Due to the huge losses of around 1 million, this company went bankrupt in 2001. The company also faced some circumstances problems at the time when it is in a situation of huge financial losses. Therefore the company went into liquidation in 2001 due to huge losses and insolvency, due to which the company was unable to make payment of liabilities and these pushed the company to the brink of liquidation. Conclusion: The report can conclude that the liquidation of a company occurs not only due to non-payment of the amount of liabilities, but also due to non-compliance with ethical modes and governance policies relevant to business operations. In case the organization is not able to follow ethical and honest behavior in carrying out its activities, it will not be able to survive in the long term. It is essential for every organization to follow the correct accounting principles and regulations while carrying out its activities, otherwise it will go to the point of liquidation due to unethical issues. Please note: this is just an example. Get a custom paper from our expert writers now. Get Custom Essay In the above selected report, three companies have faced liquidation situation due to non-payment of liabilities and also due to lack of profit. The result was a decline in the share price on the market. Along with this lack of profit, another major factor that influenced the liquidation of the company is the unethical issues such as failure to disclose a true and fair view of the financial statements. Furthermore, due to such reasons, the company faced financial collapse and was put into liquidation. REFERENCES: Bell, E., Bryman, A., & Harley, B., 2018. Business Research Methods. Oxford University Press. Berger, A.N., Imbierowicz, B. and Rauch, C., 2016. The role of corporate governance in bank failures during the recent financial crisis. Journal of Money, Credit and Banking, 48(4), pp.729-770. Crane, A., Matten, D., Glozer, S. and Spence, L., 2019. Business ethics: managing corporate citizenship and sustainability in the era of globalization. Oxford University Press.Emmermann, K. and Boey, M.Y., 2015. Reorganization and restructuring of insolvent companies in Germany: one step closer to Chapter 11?. American Bankruptcy Institute Journal, 34(8), p.26. Ferrell, O.C., Harrison, D.E., Ferrell, L. and Hair, J.F., 2019. Business ethics, corporate social responsibility, and brand attitudes: An exploratory study. Journal of Business Research, 95, pp.491-501. Gertler, M. and Kiyotaki, N., 2015. Banking, liquidity and bank runs in an infinite horizon economy. The American Economic Review, 105(7), pp.2011-2043.Kourula, A., Moon, J., Salles-Djelic, M.L., and Wickert, C., 2019. New government roles in conduct governance, 1.