1. Introduction Directors play vital role in corporate governance in which their poor management will lead to a significant change of shareholders value, measured by the company share prices. For example, ABC Learning Centre share price dropped 60% in 2 hours after it announced its profit fell 42% (Couriermail 2008). The purpose of this report is to outline the reasons of the collapses of ABC Learning Centre, Centro Properties Ltd and Hastie Group and the main financial disclosure issues raised. This report also includes amendments done by the Australian regulator to prevent such collapses and a discussion of directors’ duties to ensure the true and fair view of financial statements. 2. Brief background and the cause of financial problem 3.1 ABC Learning Centre In 2008, the ABC wrote off a loss of $437million, an amount which exceeds total profits of $300million in previous years (Schwab 2008). This means that ABC was indeed making losses since it was listed in 2001. The problem arose when new audit company, Ernst &Young, the new appointed audit team, found out that the company had reported payments from the developers as normal revenue hindering the fact that most centres were actually losing money. Moreover, an approximately of $206million indirect subsidy from the Federal Government via Child Care Benefit were reported (Rush & Downie 2006). Another problem is that its intangible assets consisted of various operating licenses worth $3.05billion on its balance sheet representing more than 70% of its total assets while the valuation of such assets remained questionable (Baaqeel 2011). Related-party transactions had also contributed to the misleading profit reported. ABC paid $27million to Austock who is a major shareholder of ABC as transaction fees, and $74million to Queensland Maintenance Services (QMS), that had the same