Compliance of Orica Limited with Conceptual Framework and Accounting Theories

Running head: ACCOUNTING THEORY AND CONTEMPORARY ISSUES
Accounting Theory and Contemporary Issues
Name of the Student
Name of the University
Author’s Note

1ACCOUNTING THEORY AND CONTEMPORARY ISSUES
Executive Summary
It is the responsibility of the companies to comply with the requirements of conceptual
framework for the preparation and presentation of their financial statements. At the same
time, the companies are needed to comply with the measurement requirements of the
conceptual framework. This report analyses various aspects of the compliance of Orica
Limited with the requirements of conceptual framework. In addition, this report also takes
into consideration the discussion of an issue related to the company. At the same time, this
report also tests the compliance of the company with both the fundamental and enhancing
qualitative characteristics of financial reporting. The report also involves in the analysis of
certain theories in respect to the company.

2ACCOUNTING THEORY AND CONTEMPORARY ISSUES
Table of Contents
Introduction................................................................................................................................3
Discussion of the Issue...............................................................................................................4
Analysis of the Annual Report...................................................................................................5
Compliance with the Conceptual Framework............................................................................5
Enhancing Qualitative Characteristics.......................................................................................7
Comparison of the Annual Report.............................................................................................8
Preparation of General Purpose Financial Statements...............................................................9
Application of Accounting Theories........................................................................................10
Investment Decision.................................................................................................................10
Conclusion or Summary...........................................................................................................11
References................................................................................................................................12

3ACCOUNTING THEORY AND CONTEMPORARY ISSUES
Introduction
The main aim of this report is the analysis and evaluation of a certain accounting issue
in one of the top 100 Australian Stock Exchange (ASX) listed companies. For this report,
Orica Limited is taken into consideration.
This report also takes into consideration the discussion about a news article about
Orica Limited that shows that drop of the share price of the company.
In this context, one major issue for the company is the compliance of the company
with various requirements of Australian Accounting Standard Board (AASB) and Conceptual
Framework. It is the prime responsibility of the business organisations under ASX to comply
with the standards and principles of accounting conceptual framework with the aim to
prepare and present the financial statements on the true and correct manner. Chances of
financial frauds and errors increase in case the companies do not comply with the standards
of AASB and conceptual framework (aasb.gov.au 2018).
Orica Limited is a multinational company based on Australia and is the world’s
largest provider of commercial explosives along with the blasting system for mines, oil, gas,
construction and others. The company has a workforce of around 11500 and it has customer
base more the hundred countries all over the world (orica.com 2018).
In the recent years, one major accounting issue is not to comply with the required
accounting standards and principles for financial reporting. This aspect creates chances for
financial frauds along with the collapse of the companies. In order to avoid this, the
companies must comply with relevant accounting standards. In addition, this report also
involves in the analysis of two specific theories in relation to the financial reporting of Orica
Limited. These theories are positive theory and the stakeholder theory in relation to the
company.