Evaluate the contemporary accounting issues in the annual report of an ASX-listed company- Qantas Airways Limited (ASX: QAN)

You have recently been appointed as a financial analyst. You are asked to write a research report that presents your analysis of several contemporary accounting issues of Qantas Airways Limited (Qantas) listed on the Australian Stock Exchange (ASX). Peruse the 2019 Qantas annual report and answer the following questions.

Qantas FY19 Annual Report - https://investor.qantas.com/FormBuilder/_Resource/_module/doLLG5ufYkCyEPjF1tpgyw/file/annual-reports/2019-Annual-Report-ASX.pdf

Qualitative analyses

1. Accounting Policy
Dealing with the accounting consequences of the COVID-19 pandemic requires Qantas to review the application of some of its usual accounting policies and practices or consider implementing new accounting policies.

Required:

Review Qantas’s accounting policies and notes to the statements, identify and discuss TWO key financial reporting areas that could considerably impact annual financial statements due to the COVID-19 pandemic. Your discussions may refer to accounting standards where relevant.

2. Corporate Governance
Increasing diversity remains a topical issue in corporate governance.

Required:

a) Critique the academic literature that investigates the diversity issue on corporate boards and, where relevant, the board committees (that is, the audit, nomination, and remuneration/compensation committees), and summarise your findings. While your literature search should be global, there should also be a strong focus on Australian-based research findings. You must cite at least (six) 6 academic references in this section.

b) With regard only to the Qantas board and its committees, describe the diversity recommendations you would make for Qantas.

3. Executive Compensation
The COVID-19 pandemic is a traumatic experience for corporates and managers. In a surprising act of solidarity, corporate CEOs are taking voluntary pay cuts. Among others, Qantas CEO Alan Joyce has announced pay cuts (e.g. agreed not to be paid a salary for half of the year). Voluntary CEO pay cuts have been considered as beneficial by some, others argue that these actions may not be all benevolent.

Required:

With which view do you agree? Your discussions should be supported by relevant academic research and/or ‘real-world’ examples.