You are a senior finance officer employed by a publicly listed company. You have received an email from the Chief Financial Officer; he is concerned that, due to the fluctuations in the Australian dollar, the company is facing serious financial difficulty. He instructs you to prepare the report providing general advice that he can put to the next

board meeting.

Required:

Provide a concise report to the Chief Financial Officer on the following:

(a) The meaning of the term 'risk of insolvent trading' and who is affected in the case of

insolvent trading?

(b) The procedure for placing a company into voluntary administration and the various

outcomes that may result from a voluntary administration?

(c) What factors might encourage this company to consider voluntary administration?

What would be the benefits and disadvantages? What other options may be available to it?