Contemporary Accounting Theory

This paper critically asses the conceptual framework applied in an ASX listed company: Iron Mountain Incorp and how the company relates this idea in the selecting of financial events, concerns, and statements. In part B, the paper will link the International Integrated Reporting System over the Sustainability Reporting Guidelines, which entails and explain the specific strengths and limitations of accounting based on CF.

Running head: CONTEMPORARY ACCOUNTING THEORY 1
Contemporary Accounting Theory Part (A&B)
Students Name
Institution Affiliation
Date

CONTEMPORARY ACCOUNTING THEORY 2
1. Executive Summary
The ideology behind the establishment of a conceptual framework (CF), in the sector of
accounting is built on the mandate to recognize key issues while studying financial statements.
This framework is made to enable the company to achieve and assess its financial health. Thus,
this paper critically asses the conceptual framework applied in an ASX listed company: Iron
Mountain Incorp and how the company relates this idea in the selecting of financial events,
concerns, and statements. In part B, the paper will link the International Integrated Reporting
System over the Sustainability Reporting Guidelines, which entails and explain the specific
strengths and limitations of accounting based on CF. The paper will compare the assessment of
the framework against a South African Country Globe Trade Centre on an index, Iron Mountain
Incorp against the company’s integrated reportage.

CONTEMPORARY ACCOUNTING THEORY 3
2. Introduction
The certification of the concept is expected to outlay critical financial guidelines that basically
control and underlie the steps to preparing and proposing a company’s financial statement and
economic assessment. In that regard, this financial information is applied by several key
investors in the company to effectively formulate the CF, appropriate for assessing the finances
of a company. Therefore, this paper assesses the concept evaluation of two companies: Iron
Mountain Incorp and the Globe Trade Centre, which are Australian and South African
companies respectively. It is also important to evaluate the IASB in expressing revised and
standardized accounting protocols, which is relevant for financial statement relevant by
companies when supplying financial procedures or handling problems evident in the compliance
activities to particular accounting standards. In that regard, this paper examines the conceptual
framework purposed for financial reporting and its relevance application in an Australian
company i.e. Iron Mountain Incorp. The following paper of this paper will assess the
sustainability and integrated writing framework applicable in South African Company i.e. Globe
Trade Centre.
Part A
a) Review of the history and development of the Conceptual Framework for Financial
Reporting
The Conceptual Framework (CF) improvement in the UK, US and other nations in the world
began in 1976, following its overview by the FASB in the US. The conceptual framework was
generated as a basic structure that crucially outlays accounting procedures, which cordially
sustains accounting reporting concerns. From 1978 to 2010, the governing entity had delivered
eight accounting statements concerning the relevant financial reports applied by various

CONTEMPORARY ACCOUNTING THEORY 4
businesses, including one SFAC No. 4, which indicated the conceptual framework that applies to
non-business enterprises (Prosic, 2015). Moreover, SFACs No. 1, 2 and 3 have already been
changed, which leave only 5 as valid SFAC Nos. The reporting is SFAC No. 4, which symbolize
the conceptual framework considered by the International Accounting Standards Committee
(IASC). This accounting body was recognized in 1973, which characterized a predecessor unit of
the accounting standards body globally.
By 1st April 2010, the accounting unit (IASB) expected the role of IASC obliged to set out the
Conceptual framework, despite the existing standards being mention as the International
Financial Reporting Standards (IFRS) (Timbate & Park, 2018). In 1975, the entity offered its
initial reporting of the IAS, which signified the accounting policy disclosure (Crombie, 2012).
The IASC offered its 28th IAS by April 1989, which represented the financial statements for
investment in the relevant associates. Therefore, the conceptual framework advanced for the
performance and preparation of accounting frameworks had been approved by April 1989 by the
IASC. This writing was therefore published in 1989 and applied by the IASB in 2001, despite its
relevance in expressing and unindustrialized the IAS framework.
For the purpose of late issuance of the standard, the essential purpose of the CF is to assist the
financial entity to formulate International Accounting Standards in the future; and permit the
review of the current Standards paragraphs (IASB, 2010b and B1713) suggesting this framework
(Ehoff, 2010). The accounting body dedicated itself into an agreement with the United States’
FASB, which was referred as the 2nd Norwalk Agreement by 2002; and instructing that two
accounting units would principally consider eliminating its present differences and join on the
basis of the quality conceptual framework (Ehoff, 2010). Succeeding the joint conference in
2004, the accounting bodies (FASB and IASB) decided to include particular key components and

CONTEMPORARY ACCOUNTING THEORY 5
concerns as an interlinked task to express a single Conceptual Framework. This initiative as
overseen and recognized based on the original FASB’s conceptual framework and the IASB’s
framework. All the two boards used the established framework as a basis of their accounting
standards for the CF.
b) Explanation of the Australian accounting profession's concerns regarding the
Conceptual Framework
The Quasi-legislation indicates that the requirement for the Constitution-centered CF in Australia
makes it nearly difficult to ensure that documented accounting frameworks are reliable and have
been formulated logically. Despite the fact that it is apparently convenient to assess the
fundamentals of accounting in the term ‘objectives’ of the significant accounting statements, the
occupations claim that the looseness of the standards in Australia has offered more possible
accounting problems. In that case, the Australian Accounting Profession is more worried about
the assessment of the CF tasks instead of its aims in the evaluation of the unit's financial
statements. This further suggests that the professions presently reject the reference and
intellectual lines of CF on the basis on accounting ’objectives’ in the evaluation of financial
statements. The main purpose for this is that the presence of the urged to create the underpinning
accounting frameworks falters short-term accounting aims.
c) Discussion of academic’s concerns about the quality (potential benefits and
limitations) of the Conceptual Framework
The CF has potential profits and restrictions to consider as an academic alarm. Therefore, here
are the profits evident following the overview of the framework in the accounting industry. Since
many countries have recognized CF, which is similar globally, there is a need for nations to

CONTEMPORARY ACCOUNTING THEORY 6
embrace considerable global compatibility on the basis of several accounting standards (Prosic,
2015). In that case, academic’s concern on excellence features on the standard’s comparability
and uniformity over the global financial reporting (whereby professions argue that it is relevant
for the assessment of foreign asset capitals and flows.
 Academics are concerned with accounting logic and uniformity, which implies that
accounting standards recognized following the request of CF should be logical and
reliable.
 CF provides the global fundamentals of accounting systems. Therefore, the standard-
setters are anticipated to be accountable for all their financial choices (Romolini, Fissi &
Gori, 2017). In case these choices are recovered from key concerns evaluated in the CF,
the accounting professions expect the standards to be clear thereby necessitating more
clarification prior to the application.
 The CF establishes an appropriate methodology of communicating the fundamental
concepts based on the present financial reports. Therefore, this framework provides the
best guidance for entities to reports on particular accounting standards and evaluation of
any financial concern (Crombie, 2012).
A portion of the limitations that have been related to conceptual frameworks of bookkeeping
include:
 Conceptual frameworks are outrageous to formulate.
 The enhancement of the CF is affected by governmental actions. With this, some
accountants present the concern that CFS is more inclined to political procedures.

CONTEMPORARY ACCOUNTING THEORY 7
 Linked to the limitation outlined above, whenever the CF considers involving accounting
concerns, there is always an issue of financial estimation of given assets as argued by
(Molyneux & Wilson, 2017).
The CFs considers more on financial-related matters. In that case, this framework will consider
disregarding several execution segments such as ecological and social revealing components.
Moreover, through the assessment of financial execution, CFs critically transits the consideration
of financial analysts based on corporate execution.
d) Explanation of how the conceptual framework has been applied by the selected
Australian Company
(i) Statements that have been organized as per the Conceptual Framework and their key
components

CONTEMPORARY ACCOUNTING THEORY 8
Fig. 1: Consolidate Financial Statement Position of Iron Mountain Incorp.

CONTEMPORARY ACCOUNTING THEORY 9
According to Fig. 1 above, the company has organized its financial information considering the
company’s consolidated financial statements components, which include the assets, liabilities
and revenue.
The company has created 20 reports having key components evident in all. The components
comprise:
 The reasons for accounting reporting: FASB's first Notice of financial and Accounting
Ideas (SFAC 1) (1978) distinguished the wide purposes of accounting evaluation. The
first broad goal expressed in SFAC 1 is to give information that is supportive to present
and potential investors and different customers in making the stable venture, credit, and
comparable choices. From this beginning point in SFAC 1, the Iron Mountain In carp
communicated other gradually explicit targets. The Fundamental of Useful Financial
Data: The second element in the conceptual framework is the subjective attribute that
financial information ought to have in the event that it is to be valuable in basic
governance. In SFAC 2, the FASB said that information is helpful on the off chance that
it is (I) essential, (ii) reliable, and (iii) tantamount (Carnevale & Mazzuca, 2012). Data is
relevant on the off chance that it can have any kind of effect in a choice. The information
has this quality when it enables customers to expect the future or evaluate the past and is
acquired so as to influence their choices.
 Financial Statement Elements: Another important improvement in constructing up a
conceptual framework is to choose the components of budget reports. This includes
distinguishing the classes of Iron Mountain Incorp information that ought to be included
in monetary reports. FASB's exchange of fiscal summary components integrates

CONTEMPORARY ACCOUNTING THEORY 10
meanings of important components, for example, resources, liabilities, value, incomes,
costs, additions, and misfortunes (Crombie, 2012).
 Financial Quantity and Recognition: In SFAC 5, ‘Acknowledgment and Estimation in
Fiscal summaries of Business Ventures’, the FASB set up ideas for selecting (1) when
things ought to be perceived in the budget abstracts, and (2) how to measure numbers to
financial items.
(ii) Which recognition principles and measurement bases have been applied for revenue,
assets and liabilities
The recognition principle and measurement for assets, liabilities and revenue is based on a
criterion that focusses on recognizing if the benefits of sale or sure are likely (Hodge, Rajgopal
& Shevlin, 2009). For assets, businesses should ensure that financial data can be measured
quantitatively. For instance, the management could evaluate the manner in which individuals
place value on a subjective matter like dedicative employee and customer loyalty. For liabilities,
businesses should be able to satisfy the appropriate definition of liability, which focusses on
resources outflow symbolizing the company’s financial benefits, including the revenues, from
the company, which are probable. The second recognition principles for liabilities include the
valuation of obligations, which can be evaluated reliably. According to Timbate & Park (2018),
it is coherent to recognize liabilities when it is crucial for the company, especially if it required
doing so. The recognition of revenue should be based on an evaluation of obligation that accord
to the definition of financial sustainability.
(iii) Qualitative characteristics of data displayed in various company's several fiscal reports
Qualitative characteristics of data shown by the company’s fiscal reports include:

CONTEMPORARY ACCOUNTING THEORY 11
Operationalization of the subjective attributes: To build an estimation apparatus, Recent writing
is used which characterizes finance related describing poor quality as far as the upgrading
subjective attributes are most important and decide the substance of finance connected specifying
information (Alfiero, Cane, Doronzo & Esposito, 2018).
Importance: ‘Significance’ feature of the company refers to its capability to comprehend
various concerns raised by clients as suppliers of capital in the company. Since the previous
literature, the significance of operationalized applying various accounting components denotes
corroborative and prescient framework. As discussed earlier in this paper, accountants will
critically assess the value of economic gains instead of the accounting reporting and its value.
This feature is controlled due to the fact that it ignores non-financial data and future financial-
connected data that are available by investors (Mostyn, 2012). In order to improve the quality,
extensive and prescient analysis of the Iron Mountain Incorp financial statement is needed.
Part B
a) Comparison of Sustainability Reporting Guidelines and International Integrated
Reporting Framework
Sustainability and international integrated reporting frameworks are applicable in the enterprise
world today (Pérez-López, Moreno-Romero, & Barkemeyer, 2013). The role of businesses in
society today is gradually improving, as compared its initial responsibility of assessing its
productivity or recording its finances. The Sustainability Reporting Guideline presents the
significant standards applicable to the help businesses to enhance competitive benefit
(Ceulemans, Lozano & Alonso-Almeida, 2015). In addition, the component of environmental
sustainability in the instruction is critically suggested for firms to apply the world today.

CONTEMPORARY ACCOUNTING THEORY 12
However, this form of reporting focusses more on a particular segment of the entity’s status but
unable to show the specific and significant climatic transitions and environmental factors
(Crombie, 2012). Apart from that sustainability reports do not effectively indicate financial
information relevant for evaluating the opportunities and risks of an entity.
International Integrated Reporting Framework progresses the corporation’s reputation; thus, the
productivity of the company can be assessed based on global customs and laws (Messner, 2010).
The reporting necessitates stakeholders to make the relationship with both the accounting and
non-accounting information analysts to be able to successfully assess possible dangers. Various
companies have actively begun to get readily integrated reports in different arrangements and
each report has been designed as per the requirements of business possessions. Moreover,
integrated announcing standards and rules have been dispersed by the Worldwide Integrated
Detailing Board, so as to provide a way to report assessors (Soyka, 2013). With the enlarging
relevant and spread of integrated detailing, banters about the benefits and issues experienced in
the readiness expanded. In this research, the followings are clarified: the terms of monetary
announcing, sustainability analysis, and accounting detailing; the growth of these terms; benefits
of integrated revealing and issues that might be experienced while readiness; and the connection
between budgetary announcing and integrated detailing.
b) Rigour (strength & limitations) of the conventional accounting, based upon the
Conceptual Framework for contents of sustainability as well as integrated reports
Strengths
The conservative accounting, centered on the CF gives a firm foundation for formulating future
financial statement standards, which improve the sustainability status of exact companies

CONTEMPORARY ACCOUNTING THEORY 13
(Prosic, 2015). The strength evident in this framework is to permit the introduction of accounting
standards and international integrated reports, which clarify the key matters in financial
statements. Conventional accounting also evaluates key material concerns, i.e. both positive and
negative, in financial statements.
Limitations
Debilitated Basic leadership: Convectional accounting offers decision chiefs little on information
an association's specialties. This is on the grounds that the sort of use the planning process tasks
is theoretical and isn't solid for settling on specific choices (Prosic, 2015). This empowers
governments and associations using traditional planning strategies to change their preparations
regularly, in order to emphasize their selections.
c) Applicability (usefulness of limitations) of the theories to explain contents of
sustainability as well as integrated reports
Association economic analysists around the globe use institutional hypothesis or neo-institutional
theory in their exploration to demonstrate that establishments of monetary, social, instructive,
money related, and political nature keeps up a huge influence upon overall associations.
Badiyani (2012) directs exact investigation upon 309 organizations chose from different sources,
in specific, GRI reports list, GRI dataset with best customary sustainability reports, CRRA
Reporting Award 2010. Results show that integrated revealing is exceedingly associated with the
phase of financial enhancement, national corporate duty, nations' qualities framework, worker's
guilds, the private use of tertiary training, proprietorship scattering. The creators neglected to
demonstrate the impact of the political factor, underlining the irregularity of information with

CONTEMPORARY ACCOUNTING THEORY 14
respect to the years for which data has been collected, given the way that the examination does
not think about the assumption of significant changes in the political framework.
d) Preparation of an index (a table or checklist) of various components (criteria) of an
integrated report, and discussion of whether and how the selected South African
Company has disclosed information against each of those components (criteria)
The integrated reporting considers providing companies with an adequate understanding of
liabilities and possessions, and how they will use this information to enhance productivity (Faria,
2016). These capitals can be money-related, made, scholarly, human, and social and relationship,
and normal capital, yet companies need not hold these main components. Integrated announcing
is worked around the accompanying key segments, which are applicable in the Globe Trade
Centre
Table 1: Checklist of Key Components
Checklist No. Key Component
#1  Environment
An integrated report includes the company’s summary of the relevant
compliance to environmental frameworks. These frameworks are
implemented and varied based on specific geographies to which the
company is found.
#2
 Socio-Political
The report should include the structure of the federal governance, which
enables the firms to create its anticipated value in the market.
#3  Production
Includes available opportunities and risks required for dealing with an
entity’s concerns on boosting its throughput.
#4  Financial Evaluation of Costs

CONTEMPORARY ACCOUNTING THEORY 15
This deals with the applied strategies and the means of allocating the
company’s resource for production (Ivan, 2018).
#5  People
This aspect is critical for the achievement and performance of strategic
aims to financial outcomes and periods. With the right people, an entity
is capable of establishing a competitive advantage (Graymore, 2014).
#6  Health & Safety (H&S)
An integrated report includes the relevant regulations on Health and
Safety, which helps the company to control its strategies concerning the
mitigation of its strategies challenges on HS (Faria, 2016).
 The Globe Trade Centre has revealed the s key components in the checklist, which
supports all the activities commenced in the business. Each pillar (Environment, Socio-
Political, Production, Financial Evaluation of Costs, People, and Health & Safety)
describes the Key Performance Indicator (KPI), including the fundamental targets set by
the company to assess its accounting and non-accounting performance.
e) Comparison of the Australian company's reporting practices with the index and the
integrated reporting practices in the selected South African Company
Based on the the corporate social responsibility of the Globe Trade Centre and the index:
(Environment, Socio-Political, Production, Financial Evaluation of Costs, People, and Health &
Safety) in an integrated report, it is plain that the Globe Trade Centre prepares an integrated
report. The integrated report offered in 2018 was written basically for potential and present
stakeholders, who consider proving that the business has real strategies that are capable of
supplying and optimizing production cost. From 2018 until the present, Globe Trade Centre has

CONTEMPORARY ACCOUNTING THEORY 16
executed targeted transitions to the significant changes in its accounting strategies to enhance
sustainability within its competitive environment.
When the reporting practices of the Iron Mountain Incorp and the Globe Trade Centre are linked,
it is realized that the remuneration committee of both businesses put stress on remuneration in
their reporting, which supports future productivity in ensuring strategic objectives are attained.
For the Iron Mountain Incorp, as viewed from the 2018 integrated report, the core components of
the integrated reporting practice have been revealed from the pre-listed financial statements.
Thus, the company proceeds to monitor its stakeholder and investors’ feedback concerning the
best practices evident in the reporting practices for better performance.
The transitional practice has resulted in a stable and flexible organization and assessment of the
balance sheet. Considering this foundation, the business can focus on its growth of accounting
value for review by its significant investor in a responsible and sustainable manner. As indicated
throughout the integrated report published in 2018, the business’s organization and strategic
practices to efficiency have been indicated by comprehensive gratitude of critical resources and
relationship, which Globe Trade Centre relies on to create its strategic accounting assessment.
In contrast to the reporting from the two companies Iron Mountain Incorp based on the provided
index of key components, it is obvious that the relative strategies regarding corporate strategies,
operating framework, opportunity analysis, and danger management required thorough analysis.
The annual reports of both businesses cover the obligation, including the financial process,
which has a fundamental control on company processes. For instance, Globe Trade Centre report
prefers the Centurion business management office, Saldanha’s port operation and the marketing
segment that the business operates in. Another relevant practice evident from the organization is
of productivity, which considers assessing possible outcomes, chances, and risks in the

CONTEMPORARY ACCOUNTING THEORY 17
business’s operations. The financial outcomes are supportive for the several investors who need
this data to monitor their speculation in the business (Adams & Simnett, 2011).
Conclusion
The conceptual framework indicates a critical concern in the fiscal accounting field, which
fundamentally deals with the checking and preparation of audited financial statements. The
founding concern of the CF and Integrated Reports is crucial for key investors and business users
to retried information concerning the business’s productivity. Resultantly, the structure presents
the necessary information that can be used as a basis for economic decision for businesses since
the information is appropriate, applicable and error-free. Thus, the financial frameworks have
permitted the Globe Trade Centre and Iron Mountain Incorp to enable its productivity in the
world of accounting.

CONTEMPORARY ACCOUNTING THEORY 18
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