This chapter refers to the work of Sullivan (1985). He investigated how organisations such as CSR Ltd used interposed unit trusts so that  controlled entities were omitted from the consolidation process.

REQUIRED

a. Could this practice be employed today and, if not, why not?

b. Before the revisions to The Corporations Law, if an organisation such as CSR had elected not to consolidate the accounts of trusts and the trusts’ controlled entities, do you think that the resulting financial statements would have been considered true and fair? Explain your answer.