Analysis of Corporate External Reporting Practices

Running Head: ACCOUNTING THEORY & CONTEMPORARY ISSSUES
ACCOUNTING THEORY & CONTEMPORARY ISSUES
Name of the Student
Name of the University
Author Note

1ACCOUNTING THEORY & CONTEMPORARY ISSUES
Executive Summary
The aim of this assignment is to do the analysis of the practices of the corporate
external reporting. For this, literature review of history and development of conceptual
framework for financial reporting will be discussed. In addition, concerns of Australian
accounting profession and academic concern regarding their application will be discussed.
Moreover, application of the conceptual framework by the Southern Cross Media Group
Limited will be discussed, which have described that company has prepared and recorded the
transactions as per the accounting standard. Further, Sustainability reporting guidelines and
Integrated Reporting framework has been compared, contrasted and its applicability will be
discussed. Moreover, integrated reporting checklist will be prepared and compared with the
Truworths International Limited. Lastly, comparison will be done on Australian company
corporate social responsibility report and financial report with South African company
integrated report, which states that integrated report is summary and one report that consist of
information of corporate social responsibility and financial performance.

2ACCOUNTING THEORY & CONTEMPORARY ISSUES
Table of Contents
Introduction................................................................................................................................3
Part A.........................................................................................................................................3
Literature Review...................................................................................................................4
Application of Conceptual Framework for Financial Reporting...........................................5
Academic Concerns about the Quality of Conceptual Framework for Financial Reporting. 6
Application of Conceptual Framework by the Company......................................................7
Part B..........................................................................................................................................8
Comparison between Sustainability Reporting Guidelines and International Integrated
Reporting Framework............................................................................................................8
Strengths and Weaknesses of Conventional Accounting.......................................................9
Applicability of Theories of contents of Sustainability and Integrated Reports..................11
Index of Integrated Report Components..............................................................................12
Comparison of contents of Australian company’s corporate social responsibility reporting
with Integrated Report of South African Company.............................................................16
Conclusion................................................................................................................................17
Reference..................................................................................................................................18

3ACCOUNTING THEORY & CONTEMPORARY ISSUES
Introduction
The aim of this assignment is to do the analysis on the different aspects of the
corporate external reporting practices. Therefore, for analysis, two companies will be taken
into consideration. First company will be STHN Cross Media and second company will be
Truworths International Limited. Southern Cross Media Group is known to be one of the
major media company of Australia (Southern Cross Austereo., 2019). Moreover, Truworths
is the retailer in clothing based in Cape Town, South Africa. This company is engaged in
selling cloths under various brands (Truworths, 2019). Hence, under this assignment,
discussion will be done on conceptual framework, which includes literature review of the
history and development of conceptual framework for the financial reporting, discussion on
Australian accounting profession’s concerns regarding the IASB/IFRS application. Moreover,
discussion will be on the review of the journal articles and application of the conceptual
framework by the company. Further, integrated/ sustainability reporting will be discussed that
includes comparison and contrast of sustainability reporting guidelines of Global Reporting
initiative and International Integrated Reporting framework of International Integrated
Reporting Council for the explanation of holistic view of the corporate social responsibility
and overall performance. In addition, rigour of conventional accounting, applicability of the
theory of the sustainability contents and integrated reports will be discussed. Moreover, index
will be prepared of the various components of the integrated reports of the South African
Company. Lastly, the comparison will be done on corporate social responsibility reporting,
and reporting of financial performance of Australian company with contents and index of the
South Australian, company integrated report (Cheng et al., 2014).
Part A
a)

4ACCOUNTING THEORY & CONTEMPORARY ISSUES
Literature Review
History and Development of Conceptual Framework for Financial Reporting
Around the world, USA has major influence on accounting standard. They follow
Financial Accounting Standard Board that includes various standards, which are disseminated
by committee of international accounting standard. However, rest of the world follows IASB.
Moreover, moving towards principles based accounting from the rules-based accounting, UK
has introduced conceptual framework. Since 1980s, conceptual framework statements are in
existence in Australia, UK and Canada (Henderson et al., 2015).
After the depression of 1929-1923, the Tentative Statement of the Accounting
Principles Underlying the Corporate Financial Statements influenced Patron and Littleton
monograph. It was the USA first institutional effort for developing the conceptual framework
of the business organizations. After the World War II, the need for the accounting standards
as well as globally accepted conceptual framework has increased. During the year 1973,
Wheat Committee recommendations has started the new era of the standards setting in USA
along with the formation of Financial Accounting Standards Board of the standard setting,
Financial Accounting Standards Advisory Council as well as Financial Accounting
Standards. Further, for addressing harmonization accounting standards need, International
Accounting Standards Committee was formed in the year 1973.During the year 1978 and
2000; 7 Statements of the Financial Accounting Concepts were published by FASB. This
serves as the conceptual framework of FASB. During the year 1989, single document of the
framework was published by the IASC. IASB and FASB has announced for their new joint
agenda in order to revisit both of the company’s conceptual frameworks. Moreover, in the
year 2010, the first stage of joint project of conceptual framework was published by the IASB
and FASB. This phase of conceptual framework dealt with the qualitative characteristic and
objectives of the financial reporting. Later, in the year 2013, IASB has published for the

5ACCOUNTING THEORY & CONTEMPORARY ISSUES
discussion paper in order to request for the comments for releasing the exposure draft of
revised sections for the first quarter of the year 2015 (Tschopp & Huefner, 2015).
According to Dickson Adom, theoretical and conceptual framework guided the
research path and offered the foundation for the credibility establishment (THEORETICAL AND
CONCEPTUAL FRAMEWORK: MANDATORY INGREDIENTS OF A QUALITY RESEARCH, 2019).
According to Rosa Caiazza, conceptual framework works for the innovations for the
sustainability. It is because conceptual framework aims for providing the framework for the
classification of the transfer of the knowledge as well as their effects on the competitiveness
of firms (Innovation for sustainability, 2019).
b)
Application of Conceptual Framework for Financial Reporting
There is no guarantee of the high quality financial reporting solely by the
development of the accounting standards with strong theoretical bases. There are various
issues and concerns regarding the application of the conceptual framework for the financial
reporting. Following are the some of the Australian profession’s concerns and application
issues that arises while applying IFRS/IASB:
 According to ACCA, the restructured conceptual framework of IASB has raised the
thorny issues. There are some proposals from the IASB, in order to update the
conceptual framework for financial reporting that has led to the detailed discussions
(ACCA Global, 2019).
 According to KPMG Luxembourg, the financial statements information are not
enough, too much irrelevant, and not effectively communicated (Danilenko, 2018).
 According to Leavitt Walmsley Associates, the purpose of framework document is for
setting out the concepts, which underlie the presentation and preparation of the