Australian Financial Reporting Regulations: A Critical Review

Australian financial reporting regulations: a
Critical Review
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Contents
Contents...........................................................................................................................................2
ABSRACT.......................................................................................................................................3
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Current regulatory framework or regulations encompassing the preparation of financial
statements by reporting entities in Australia...............................................................................3
About Australian financial reporting environment......................................................................3
real-life ‘financial reporting accounting fraud’...........................................................................3
CONCLUSION................................................................................................................................3
REFRENCES...................................................................................................................................3
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ABSRACT
Accounting is essential part of every nationals economy it provides basic framework for
organizations to prepare their financial statements. This report is considers the Australian
accounting regulations, theories of accounting and the case study of famous organization of
Australia, Harris Scarfe for identifying the reason of fraud and policies to solve the issue.
INTRODUCTION
Accounting is a process of recording and interpret transactions. Every country follow
specific rules and standard of accounting. In Australian every organization follows rules of
their regulatory comities. This report in prepared to provide information regarding
Australian financial reporting environment and also descrier the relevant polices of
accounting in Australian. This report includes case study of Harris Scarfe which proved
information regarding how the company face fraud scandal its reason and also this report
considers recommendations though which Australia regulation commit will able to
overcome these types of issue (Guastella and Hickie, 2016).
TASK 1
Current regulatory framework or regulations encompassing the preparation of financial
statements by reporting entities in Australia
Australia wants to enhance the confidence of their investors and maintain integrity in its
economic environment thus they formulate rules regarding preparation of financial statements .
In Australia it is essential for formulate the reports as per the legislative requirement. It become
essential role in every business fiancé corporation thus it will help in achieving organization
goals. And predetermine goal.
The Australian Securities and Investment s, commission is a regulator of its financial market.
Very Australian organization needs to formulate and lodge their financial statements with the
ASIC. They need to present their financial statements at the end of its financial year. All business
organizations are vital to audit their accounts and present the auditor’s report in the regulatory
office to recognized that whether they work in ethical way or not. Or follow all the procedure of
reporting or not. In Australia he accounting stand also regulate by ASIC and their standard meet
requirements of international accounting standard (Nurunnabi, M., 2014).
Australian Financial reports required following tools
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 Director’s report
 Report of Audit committee
 Remuneration report
 Statement of profit and loss
 Statement of comprehensive income
 Financial position statement
 Statement of working capital
 Statement of cash flow, fund flow
 Financial statement notes
 Note of director’s declaration
 Auditor’s independence declaration
 Auditors report
Types of financial reports required
Financial report for general purpose which includes in their reporting
Financial report which reduce disclosure resume
Special purpose financial reports
According to the ASCI, companies which are listed entities, public companies, large soul
proprietary companies are required to prepared financial reports.
Prosperity company includes an organization which generated less than 25 million revenue per
year. Which has gross asset value 12.5 million and have 50employees considered as large
proprietary company.
For small proprietary company it includes that organization in which shareholders have 5 %
shares (Lodhia, 2015).
The Australian tiered framework is made for reducing the burden on certain industries
Tier 1 includes private sectors organization which is established for earning profits. General,
public sectors entities. And tier 2 includes non profit entities which are not adoptable and
established for social worker.
Financial reporting is help in companies all the general principal of accounting standard and
proved beneficial to business entities.
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