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Accounting Theory and Contemporary Issues | Report

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Added on  2020-02-24

Accounting Theory and Contemporary Issues | Report

   Added on 2020-02-24

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Accounting theory and contemporary issues
Accounting Theory and Contemporary Issues | Report_1
IntroductionThe general purpose financial statements are developed by a business entity in order toprovide information to end-users about its financial position. The IASB has developed andprovided the standard guidelines for all business entities for developing the financial statementsthrough the development of conceptual accounting framework. The conceptual accountingframework has stated the qualitative characteristics of relevance, reliable ad comparable to beadopted by businesses for financial reporting. This is done for improving the quality of financialreporting in order to meet the needs of end-users such as potential investors and creditors. TheAASB (Australian Accounting Standards Board), in this context, holds the responsibility ofensuring the compliance of international accepted accounting standards and conceptualaccounting framework principles by the Australian business entities (CCH Australia Limited,2009). The present report has demonstrated the need of complying with conceptual frameworkprinciples and AASB standards by demonstrating an example of Australian accompany who hasfailed due to its unethical and fraudulent accounting activities. The company selected for thepurpose is 7-Eleven and its financial reports are evaluated for assessing the arsons if its failure.Analysis of Reason of Failure of 7-Eleven with Respect to its AccountsThe 7-Eleven is a recognized Australian retail company that is widely known foroperating chain of convenience stores across the country. The company is a franchise of USbased 7-Elevne Inc and is involved in providing diverse products such as drinks, confectionary,gift card and others (7 -Eleven: Annual Report, 2015). The company has however being allegedof conducting corrupt and fraudulent activities in relation to its remuneration and financialreports. The screenshot of the remuneration report of the company as extracted from its annualreport as follows:
Accounting Theory and Contemporary Issues | Report_2
The remuneration report aims to provide information in relation to the accountingpolicies adopted for deciding over the matters of compensation provided to its directors andemployees. The remuneration report of 7-Eleven has stated its effective compliance with theCorporations Act 2001 and AASB standards for developing and maintaining its remunerationpolicy. The remuneration report of the company has also stated the remuneration of its executiveand non-executive directors is dependent on the operating profit of the company. Thisremuneration policy of the board has introduced an organizational culture within the company ofdriving the profitability by directors; in order to increase their compensation and as suchpromoting the occurrence of corrupt financial practices (7 -Eleven: Annual Report, 2015). The remuneration policy developed by the Board ensures that fair compensation isprovided to all of its employees and has disclosed the information of employee benefits andexpenses in its remuneration report. However, the company has faced allegations regarding theoccurrence of unethical employee wage policies and practices. The company has been accused offorcing the employees to work till long hours and also providing them half pay. The managementwas accused of threatening the employees to work till extended hours by saying that they would
Accounting Theory and Contemporary Issues | Report_3

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