Question

There are 3 short answer questions in this paper. Type your answers where indicated. Your answers can be in bullet point form.

A local resort in the Blue Mountains is for sale.

1. What are the potential valuation effects of COVID-19 and of the bad bushfire season the year before? Identify how these events would be taken into consideration in a valuation model. Be sure to identify positive or negative valuation effects and whether these effects are short term or long term.

Type answer here

The government has identified an area of the national park near the resort that they are going to release for sale for development to raise money. The sale of the land is being done by sealed bid auction with the government committee deciding which offer to accept based on several criteria including the amount offered as well as the plans for development. You find out that someone on the committee is trying to solicit a kickback of 15% to award the contract.

2. You tell your boss and she tells you that this is how the industry works. What should you do? Can you identify any examples of this type of corruption has occurred in Australia or by Australian companies?

Type answer here

The resort monitors all the sales and COGS in each of the departments and they noticed that COGS have been increasing in the restaurant without any change in the revenues.

What are some of the possible explanations for the increasing COGS? How would you investigate fraud-related potential explanations?

Answer 1

1. The blue mountain resort has the below valuation effects.

The visitors are always conscious about the natural disasters that may occur - This is a short term effect and will wear off effectively.

Solution : There can be an app developed to know the possible fires that can be occured based on various parameters so that the resort management can be aware of them and take necessary precautions.

The cost of re attracting the customers is going to be very high as the management needs to be creative and innovative in their marketing strategies. - This will turn out to be a long term benefit

2. Examples of similar curroption in Australia

Bribery

False land claim documentation

3. The COGS is increasing constantly because of the recent events occured in the nature.
These natural calamities put a stop to the number of visitors.
Therefore the resrt is spending costs in order to renovate and market the resort in a creative manner. The marketing must include ensuring safety to the employees.

Therefore improvement costs, marketing costs and labour costs might be reasons for increase in the COGS