The collapse of ABC Learning, once the world's largest child care provider, is the subject of The ABC of a corporate collapse, a DVD case study for students from CPA Australia.
'ABC Learning's rise and spectacular fall is an example of what happens when a company ignores the fundamentals of sound accounting,' CPA Australia CEO Alex Malley said at the launch in Sydney, Australia in February 2010.
'At the end of 2006, ABC Learning was trading on the share market at around $8.60 and operated around one in five child care centres in Australia. Less than two years later shares were worth around 54 cents and the company was placed in the hands of administrators. Debt, a crisis of liquidity and inflated asset values all spelt the end for ABC Learning.'
The DVD, presented by TV personality David Koch, follows the successful release of a similar educational video by CPA Australia which examined the collapse of telecommunications company One.Tel, and has been distributed to accounting educators across Australia and the Asia-Pacific.
'Finance and business leaders must ensure their organisations maintain sound accounting practices and uphold their ethical responsibilities. CPA Australia has produced a video that examines a familiar case study that students will relate to and can learn from,' Mr Malley said.
'There is immense value in this story being brought to life for accounting and business students. The video not only covers the fundamental flaws in the company's accounting but the ethical and corporate governance issues that contributed to its demise. It shows what can happen if these go unchecked.'
The case study is available publicly on CPA Australia's YouTube channel.
To order a copy of the DVD series, please email your name and address to passport@cpaaustralia.com.au.