Auditing HIH disaster Essay Example | Topics and Well Written Essays - 2500 words

Auditing HIH disaster - Essay Example In spite of major events which took place in succession in the HIH, some thing was lurking behind. By January 1999, the HIH acquired FAI insurance for A$ 300 million which later turned out be worth onlyA$100 million though the external audit of Arthur Andersen for the year 2000 did not make any issue of it. On the other hand the company was lauded to be worth A$ 939 million. Soon after in September, it sold half of its profitable retail general insurance business for cash liquidity and as a result its share prices fell down from A$ 1.05 to A$ 0.45 when the company announced losses. Yet the regulatory authority did not think fit to inspect the accounts as it relied on the external audit report had painted a healthy picture. This was followed by the resignation of the CEO founder of the company for 30+ years, with a compensation of A$ 5 million in December 2000. As the company had not filled its December statements, when they became overdue by February 2001, the regulator APRA was conc erned for the first time. Meanwhile on 27 February Australian Securities & Investments Commission (ASIC) took the initiative by suspending HIH's share trading soon followed by the APRA's fire fighting act of transferring the company's risk portfolio to other insurance companies to the extent possible. On 15 March 2001 HIH declared provisional liquidation with Government agencies covering some of its obligations which might cost the tax payer about A$ 1 billion to bail out policy holders. On 16 March, finally APRA started inspection of the HIH affairs. Government of Australia lost no time to set up an independent Royal Commission by August 2001 as already announced in May 2001 to investigate into the failure of the company. It took 6 months for the liquidator to arrive at the losses as between A$ 3.6 billion and A$ 5.3 billion. It has been stated that not only the settlement of policies and the company's creditors could not be made in full but also it would take ten years for disburs ement which might be in the ratio of 1: 0.5. This was how the second largest Australian insurer's corporate bubble burst representing the biggest collapse in the corporate history of Australia to date. The whole imbroglio was attributed to poor management by under pricing of policies and overestimation of its assets mostly non tangible rather than frauds. Soon after the company's fall, the premium market shot up steeply. While the APRA conceded that it was because of not provisioning the company with sufficient capital to cover its risks for quite a number of years that this had happened, the Australian Prime Minister had to rebut the public accusations that political donations siphoned off the company's resources. (Sungard Banc ware Erisk). Actually the company had indulged in acquisition spree of more than 200 subsidiaries which only made the company's size unwieldy in an already overcrowded and competitive insurance market though the acquisitions accounted for 26% premium growth per annum for a decade. Most controversial of all was the acquisition of FAI insurance for A$ 300 million which was worth hardly A$ 100 million and that too the company had borrowed money for the settlement. Rodney Adler the major stock holder of FAI who also became a member of HIH Board however clarified "that the purchase price of his company was too high by stating that the price was set, by definition,

Identify and analyse the skills and knowledge needed for effective Essay

Identify and analyse the skills and knowledge needed for effective management within the Cultural Sector - Essay Example Researchers have rightly pointed out that some forms of art take priority in every age and the objectives served by art will keep changing with the changed meanings and aspirations related with them. Given that the arts have been created, managed and distributed in varied ways in different times, it is logical to assume that the skills and management systems required for managing the sector also need to be changed and facilitated with the acquirement of new skills and competency levels. This paper will identify and analyze the skills and knowledge needed for effective management within the cultural sector. It is important to understand the main concerns of managers in the cultural sector in terms of the worth that is carried about cultural services and artistic goods. The issues arise whether these managers have to realize their own cultural or artistic aspirations, whether they are prepared to convert dreams into reality and whether they have the ability and competence levels and skills to make such achievements. It is considered by experts that in view of the nature of their work, managers and supervisors working in the cultural sector do have a genuine desire to create a better cultural experience in society. They are mostly committed to cultural work and the outcomes and to the effects and values of culture in society. Cultural leadership concerns doing the right things, but it is unfortunate that most managers in such establishments are unable to fulfill their aspirations in view of the shortcomings relative to having inadequate knowledge about the actual aspects of the productio n of art and cultural programs. There is a major misunderstanding amongst management leaders in the cultural sector as they focus their efforts mostly on marketing the cultural productions to create huge events, instead of organizing more accessible programs to allow