Effectiveness of Conceptual Framework in Australia Case Study of Flight Centre

Effectiveness of Conceptual Framework in Australia1
EFFECTIVENESS OF CONCEPTUAL FRAMEWORK IN AUSTRALIA CASE STUDY OF
FLIGHT CENTRE
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Effectiveness of Conceptual Framework in Australia2
Table of Contents
TITLE:.............................................................................................................................................3
Executive Summary.........................................................................................................................3
Definition of Terms.........................................................................................................................3
Australian Security Exchange (ASX):.........................................................................................3
Accounting Theory:.....................................................................................................................3
Introduction......................................................................................................................................3
Aims and Findings...........................................................................................................................4
Benefits and purpose of a conceptual Framework for Financial Reporting................................4
Background of Flight Centre...........................................................................................................5
Discussion of Issues.........................................................................................................................5
How Flight Centre Work.............................................................................................................5
The role of Flight Centre.............................................................................................................6
Conclusion and Recommendations.................................................................................................9
References......................................................................................................................................10

Effectiveness of Conceptual Framework in Australia3
TITLE: Effectiveness of Conceptual Framework in Australia Case Study of Flight Centre
Executive Summary
These are theories that are set by the Accounting regulatory bodies to ensure that accounting
practical problems are objectively tested and that financial Reporting issues are dealt with
appropriately. Financial Accounting Standard Board (FASB) was formed in 1973 in Norwalk to
set standards for public organization. The Board is an Independent and a not-for-profit
organization whose objective is to issue financial accounting standards that are not only
transparent but also promotes financial reporting in order to provide accurate and timely
information to the users. International Accounting Standard Board (IASB) was formed in the
year 2001 to oversee the operations of the IFRS. It replaced the International Accounting
Standard Committee (IASC). International Financial Reporting Standard (IFRS) are standard
rules that are to be adhered to by all accountants globally for harmonization of accounting
practices across the world.
Definition of Terms
Australian Security Exchange (ASX): Australia’s premier large Capitalization equity Index.
Accounting Theory: Theories and methods that are used in studying and analyzing financial
reporting rules and regulations. Accounting Concepts are accounting rules applied while
preparing the financial Statements and Accounts. They include Accrual Concept, Consistency
concept, Going Concern concept and Prudence Concepts
Introduction.
Flight Centre being one of the largest Airline Company in Australia, has contributed significantly
in contributing to the implementation and development of the conceptual frame work. The

Effectiveness of Conceptual Framework in Australia4
corporation has played a great role in ensuring that the obligations of the Accounting conceptual
frameworks are met. The main purpose of the Conceptual frame work is to help the IASB to
develop future IFRS and to review its current IFRS and this topic has clearly brought out how
the Flight Centre has ensured that this happens (Bath, 2012).Flight Centre role of overseeing has
enabled the Australian listed companies to be left with no option but to comply with the
implementation of the rules and regulations set out the Boards. This has ease the work for the
Australian government prepares the financial statements because it harmonizes the way financial
statement are to be prepared globally (Frijns, 2010). The topic has explained the conceptual
frame works that have been adopted by the Flight Centre Corporation such as the IFRS, AASB
and the IAS (Viljoen, 2015). Conceptual framework is very vital as far as reporting of financial
statement is concerned, for instance it help financial statement users to understand the
information provided by the organization. Companies with whose portfolio have high liquidity
and need a benchmark and Flight Centre provides this benchmark for such company’s
Aims and Findings
Benefits and purpose of a conceptual Framework for Financial Reporting.
i. Provide clear defined terms that are used in discussion of accounting problems.
ii. Guides those who set the accounting standards while coming up with ways on how to
review financial reporting rules.
iii. Helps to ensure internal consistency in the accounting Standards
iv. Lack of an accounting standard can lead to misunderstanding among those preparing the
financial statements. Conceptual framework can therefore help to solve such
misunderstanding.