Accounting Theory: Analysis of Rio Tinto's Financial Statements

ACCOUNTING THEORY

Table of Contents
INTRODUCTION...........................................................................................................................1
BACKGROUND.............................................................................................................................1
SCOPE.............................................................................................................................................1
PRELIMINARY ANALYSIS FINDINGS......................................................................................2
Use of disclosed information in financial statements regards to financial position of
corporation..................................................................................................................................2
Distinguish between fixed and flexible format of statement......................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Accounting theory is a discipline of study by which the frameworks and assumptions is
examined and provide the common support of references for evaluating the development and
introduction of new processes and practices as well(Kaur and Lodhia, 2016). This study discuss
the theories of accounting in the context of a mining corporation Rio Tinto. Study explains the
use of financial information in the final statements for various user of the company.
BACKGROUND
Rio Tinto the largest and biggest world's best and famous name in mining industry. This
mining corporation was first founded in 1873 and like any other biggest mining corporations,
this company has been developed through a chain of acquisitions and mergers. This corporation
focused on investigating, mining and managing or processing the mineral resources from the
earth. The mining company Rio Tinto basically mine the various mineral resources such as;
aluminium, diamonds, copper, industrial minerals, uranium, gold and iron ore, and also own
several underground as well as open pit mines, mills, power stations, refineries and smelters.
This corporation has operate its operational activities by using latest and updated technology, use
various techniques with the motive of increasing the productivity of human resources.
Rio Tinto operates the mining operations in 35 countries over sic continents around the
world and have large number of man power to process the mines. An effective and clear strategy
is critically performed by the company. The goal of Rio Tinto is to serve best value for its
stakeholders and in order to achieve this objective company focus on the concept of 'four Ps':
performance, portfolio, partners and people. Corporation use the strategy to evaluate their existed
assets and seek new and better opportunities to sustain in the market to gain competitive
advantages, and also ensures the generation of value from mine to the final market. Rio Tinto is
firmly engaged in the development of technologies and introduce innovative techniques to raise
the productivity of its human resources.
SCOPE
The scope of this study is to analyse the applicability of sustainability accounting theory
in mining corporation; Rio Tinto and also to measure the impact of operational activities of
company on the relationship with customers, environment, innovations, and value creation etc.