A number of companies have gone into liquidation because they have not been able to meet their liabilities when they fell due. In Australia, there are some well-publicised examples such as Aluminium...

Financial Accounting ACC701
Executive Summary
There have been instances in the recent past where the companies that have been unethical have been liquidated. This cu
ent report deals with liquidation of three companies namely Aluminium Boats Australia, HIH Insurance and Stella Homes. Lack of managerial excellence, integrity, willingness of owners to earn profit and huge debt were some of the major reasons behind the collapse of the companies in the past. Hence, the eternal liabilities must be kept to a limitable standard, which could be managed by the management.
Table of Contents
Introduction    4
Liquidation    4
APES 110 Code of Ethics for Professional Accountants    4
Integrity    4
Objectivity    4
Professional Competence and Due Care    4
Confidentiality    4
Professional Behaviour    4
Aluminium Boats Australia    5
HIH Insurance    5
Stellar Homes    6
Conclusion    7
References    8
Introduction
In this competitive world, the importance of ethics has become higher than ever before. The stakeholders prefer companies that follow code of ethics to other companies. There have been multiple reasons behind the failure of different companies. After liquidation of companies, such organisations are taken over by other large organisation or cease to operate.
Liquidation
In simple words, liquidation refers to winding up of the assets and liabilities of the company. As stated by Nishihara and Shibata (2017), major reasons behind liquidation are high competition, huge financial debts, scandals or corporate governance issues. Companies like Enron and Lehman Brothers have gone into liquidation due to ethical issues. According to the views of Crane and Matten (2016), huge debt also leads to closure of company operations at some point of time.
APES 110 Code of Ethics for Professional Accountants
Integrity
According to section 110 of the APES 110 Code of Ethics for Professional Accountants, the principle of integrity states that the members should been honest and professional in their approach. Personal gain should not hamper the business activities or any part of the business. Professionals should maintain high level of integrity in day-to-day operations. If the professionals have any idea of any material misstatement, they should take steps to disassociate themselves from the information. A member should not be associated with any omission of material information, any statement or report that contains a false statement and information of statements, which are furnished recklessly (APESB, 2010).
Objectivity    
According to section 120 of the APES 110 Code of Ethics for Professional Accountants, the members should not compromise their business judgement or professional judgement because of any conflict, bias or interest or any undue influence of others. As per the opinion of Ba
aquier, et al. (2017), the members should be professional in his approach and should not allow bias to effect his business decisions. If the professional has any idea of any biasness, he should report to the head or other members, as he may deem fit (APESB, 2010).
Professional Competence and Due Care
According to section 130 of the APES 110 Code of Ethics for Professional Accountants, the professional should have ample knowledge to deliver professional service to the client. He should apply sound judgemental skills while dealing with the clients. The professional should be aware of the latest amendments and other requirement s to ensure quality service to the client. He should act according to the requirement of the situation and on a timely basis. The professional should take proper steps to provide training to the individuals working under him or her. The quality of service provided to the client should not be compromised under any circumstance (APESB, 2010).
Confidentiality
According to section 140 of the APES 110 Code of Ethics for Professional Accountants, the members are refrained from disclosing the information of the client to any outsider. The information of the employees should not be disclosed to any personal members, failing which the member can be sued under ground of leaking confidential information. However, when the disclosure is permitted by law, in case of legal processing’s and legal matters, the information can be disclosed. According to Ba
aquier, et al. (2017), in order to comply with the ethical requirements and technical standards, the member can disclose information as per the requirements of the situation (APESB, 2010).
Professional Behaviou
According to section 150 of the APES 110 Code of Ethics for Professional Accountants, the member should comply with all the relevant rules and regulations. The professional should not do any omission of facts or information about or from third party. The professional should not make claims that will not be fulfilled (APESB, 2010).
Aluminium Boats Australia
Aluminium Boats Australia was founded in the year 1999. It is an organisation aimed towards building premium composite and aluminium light crates. It specialised in leisure craft and fe
y ships, made of premium quality materials. It uses best quality material, latest technology and provides tailored solutions to private owners and commercials. It provides tailor made construction of ships and vessels along with servicing and repairing of the same. The major reason behind the failure of the company was the fire...