Corporate Financial Accounting ActivEX Limited

Question: Discuss about the Corporate Financial Accounting : ActivEX Limited. Answer: Introduction: The chosen company is ActivEX Limited is based on Brisbane and is listed with the Australian Securities Exchange. The company focuses on acquisition, delineation and identification of the projects dealing with mineral resources with the help of active exploration. Portfolio of the ActivEX Limited is widespread ranging from 1 granted lease of mining and 33 granted permissions for explorations along with one application of prospecting licence (Lemus 2016). The license covers more than 2881 km in Queensland and in various regions of Western Australia. Moreover, these licensed areas are quite potential terrain that are embedded with copper and gold mineralisation in the northern and southeast regions of Queensland along with the Cloncurry district situated in the northwest area of Queensland (Lund 2015). ActivEX Limited also possesses an active potash project located in the Western Australia in this project the compny is investigating the most efficient way of percolating processes for extracting and producing the by-products of potash. Role of the CFO of ActivEX Limited: There are mainly five principles that usher the Chief Financial Officer towards the success path. These principles are, It is quintessential for a CFO to become an active member of the senior management team of the company and at the same time be an effective leader. Keeping a balance between the responsibilities associated with the business partnership and stewardship. Playing an important role in navigating and integrating the organization. The Chief Financial Officer should be an effective leader of the functions associated with the finance and accounting activities within the organization. CFO is responsible for bringing about qualities in the role of the organization. These five responsibilities taken together determine a framework in which the Chief Financial Officer of an organization is working. However, the CFO of ActivEX Limited does follow this framework and has efficiently placed the company in a very good position in the competitive market (Diehl 2016). However, in this particular section the study will focus on the three main key responsibilities of the Chief Financial Officer of ActivEX Limited. These responsibilities are stated and explained one by one below, Active participation in the leadership team: The leadership teams in the service organizations may adopt different forms with the different combinations of executives and non-executive members, these leadership teams sometimes also include representatives who are elected by the employees of the organization (Cowell 2013). More specifically these leadership teams are responsible for determining the strategic framework of the organization, implementation of the designed strategy and evaluating the strategies as well. Nowadays it has become a mandate that each and every company should possess a CFO who will report directly to the permanent secretary of the company (Lowies 2012). Furthermore, there are a number of structures which are in effective operation. As per these structures the leadership team sometimes may include the governing body, senior management officials along with the key management committee of the concerned organization and the Chief Financial Officer acts as the key leader within this group (Cui et al. 2015). In the case of the selected organization this framework followed exactly. The Chief Financial Officer in ActivEX Limited plays a significantly important role in directing, governing and advising regarding the financial matters of the entire company as a whole. In order to fulfil these responsibilities efficiently the Chief Financial Officer has access and communication with all the governing members and documents both as an individual and in association with the other people (Baez 2014). It is also quite important that the Chief Financial officer ascertain an effective professional working relationship with the chief members of the governing body built based on mutual trust and respect for each other. It is also quite evident that in this case the Chief Financial Officer works intimately and closely with each of the governors and it is quite necessary. For instance it is necessary for the Chief Financial Officer to work with the finance or the audit committee closely otherwise there will be lack of information (Priest et al. 2016). In the case of ActivEX the multi disciplinary characteristics of the highly designated management teams equips the Chief Financial Officer with the opportunity to contribute valuable inputs form their part in order to form various important strategic decision as a premier member of the team. The Chief Financial Officer also ensures that the strategies adopted by the organization should be delivered with the help of an prearranged financial strategy (Sun et al. 2013). Within the higher management team the Chief Financial Officer is responsible for the following responsibilities, Establishing him or herself as a chief corporate player in order to ensure that the decisions taken will ass value to the prospects of the company as well as contribute in establishing competitive advantage (Menike and Prabath 2014). The Chief Financial Officer will also add value to the process of corporate decision making by imposing challenges, encouraging and evaluating the proposals that will help the organization to achieve its aims and objectives effectively and efficiently (Menike and Prabath 2014). The CFO is also responsible for assisting the effective decision making process absed on available information and thereby bringing out the value of those decisions within the organization as well. Chief Financial Officer of ActivEX Limited is also responsible for supporting the superior management team of the organization by providing the appropriate financial decisions. Henceforth the Chief Financial Officer of the organization is responsible for maintaining the team and establishing proper communication with the organization. Therefore, without the CGO it is nearly impossible to establish a proper decision making framework and implementing appropriate strategies (Menike and Prabath 2014). Designing and implementation of the organizational strategies: During the past few years ActivEX Limited has faced various issues because of the rapid changes which are taking place in the market structure as well as in the structure of competition. The government with the help of the funding bodies has required implementing gains in the level of efficiency, and this in turn have imposed sufficient financial pressure over the organization as well (Casault et al. 2014). It is also quite evident that there are increasing competition among the manufacturing firms in terms of cost and pricing of the products. Partnering with the other organizations as well as cooperating with them will help the organization to achieve further success in future. However, in this case the company wish to operate in the way it is operating right now, that is without partnering with any other organization (Oricchio 2012). As a Chief Financial Officer of ActivEX Limited the focus should be on designing the strategic planning entirely based on the external landscape of the organization, the demand and drivers of cost associated with the organization. Financial decisions actually translate the aims and objectives of the organization in a very common language and therefore the Chief Financial Officer shares the development of strategic framework and its implementation responsibilities with the entire leadership team. The Chief Financial Officer also ensures that the members of the superior leadership teams are well equipped with the financial capabilities so that they are able to discharge their duty as well as their role (Oricchio 2012) The Chief Financial Officer of ActivEX Limited promotes and encourages continuous developments of the organizations so that the institution can deliver its products and service at the highest level. At the same time the prior concern of the Chief Financial Officer will be investigating the processes and controlling the organization and therefore, the CFO is proactive in management of risk and change associated with the organization (Van Gelderen and Monk 2015). Moreover, as the esteemed member of the superior leadership teams the Chief Financial Officer behaves in a way that is consistent with the values and objectives of the organization. Helping with the resources along with delivering the objectives: Presently there is an emerging trend among the Chief Financial Officers to hold different types of responsibilities beyond financial activities. This may include managing the change programmes or leading the other services framework. However, these help an individual to develop him or herself as an efficient corporate personnel but it is not compromised with the financial roles of the Chief Financial Officer (Mouelhi and Saint-Pierre 2013). Overburdening the Chief Financial Officer with increasing responsibilities will definitely result in very inefficient financial outcomes for the organization. Financing of the organization is a very complex and highly controlled phenomenon and therefore the Chief Financial Officer of ActivEX Limited contributes their technical expertise and the interpretation. Hence the CFO of the organization will also be responsible to maintain a balance between the interests of the company and the public at the same time the organization will also take into account the legislative frameworks of the country which are relevant in this regard. Therefore, from the discussion above the roles and responsibilities of the CFO of ActivEX Limited have been understood and it has helped to gain a broader knowledge about the entire topic. The three main responsibilities of the Chief Financial Officer of ActivEX Limited has helped the organization to grow in the market effectively. Following these regulations and meeting the requirements will also help the organization to grow further and flourish in near future (Jamshidi and Jonsson 2016). The Efficient Market Hypothesis: The efficient market hypothesis which is also known as Random Walk Theory is a proposition it states that the present stock prices do reflect all the available information regarding the value of the firm and it also states that there is no way in which a firm can earn excess profits by using this information. This hypothesis deals with the most excite g and fundamental issues relevant to finance that is how prices in the stock market changes and how those changes are taking place (Zahedi and Rounaghi 2015). There are a number of investors who always search for the assets which are undervalued and which are expected to raise their values in near future to be very specific those assets which re expected to increase its value more than the other assets. Most of the investors including the investment managers as well think that they are able to select those securities which will outperform the market (Zahedi and Rounaghi 2015). These officials generally use various forecasting and valuation tools and techniques in order to make their investment decisions. According to the Efficient Market Hypothesis none of these procedures are effective in determining the value and therefore no one will be able to outperform the market (Mouelhi and Saint-Pierre 2013). However, there are no other theories in the context of economics and finance that generate a more passionate discussion between the proponents and the challengers. Therefore, according to the Efficient Market Hypothesis there are no one who will be able to earn profit by predicting the future price. The assumption that investors will not be able to outperform the market however, it has been observed that a number of investors have outperformed the market. Hence, it can be said that when a personnel is not able to outperform the market that is if the Efficient Market Hypothesis is not true then the pension fund manager will definitely select a portfolio with a pin. However, Efficient Market Hypothesis does not imply that the investors will not be able to outperform the market (Zahedi and Rounaghi 2015). It is a widely known fact that constant arrival of information makes price fluctuate. Therefore, sometimes it becomes possible for the investors to predict the price when the arrival of information affects the price of the stock that the investor is holding. Therefore, this is the reason behind the fact that the pension fund managers do not buy a portfolio with a pin (Jamshidi and Jonsson 2016). 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