Contemporary accounting theory : Assignment

CONTEMPORARY
ACCOUNTING THEORY

EXECUTIVE SUMMARY
Conceptual framework is a set of rules or interrelated fundamentals. The objectives of
conceptual framework is to determine the goals of financial reporting, These framework
facilitate the guidelines regarding how transactions should be recognised & measured, and in
what they shall be reported and communicated. The report will include history and development
of conceptual framework for financial reporting in USA, Australia, UK and globally under
IASB, Australian accounting profession's concerns about the quality of conceptual framework.
A checklist is prepared for determining whether South African Harmony Gold Mining Company
Ltd., has disclosed information regarding such contents of integrated report.
In Australia, International Financial Reporting Standards(IFRS) came into effect in 2005,
accounting standards considered as entirely equivalent to IFRS. Interpretation of accounting and
financial reporting standards issued by IASB is considered as a critical matter in respect of both
international and Australian context which was a concern of accounting professionals in
Australia. Qualitative characteristics of information are reliability, understandability, relevance.
Guidelines of Global Reporting Initiative asserts on what the organisation is doing to the world
and environment which renders it less or more sustainable. International Integrated Reporting
Council which was established in 2010 August has an objective of developing a globally
accredited and accepted set of rules that results in organisation's communication regarding its
value creation over passage of time.

TABLE OF CONTENTS
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
PART A: CONCEPTUAL FRAMEWORK....................................................................................4
a.) History of conceptual framework in UK, USA, Australia and globally under International
Accounting Standard Board (IASB).......................................................................................4
b.) Discussing Australian accounting profession's concern regarding application of
IASB/IFRS conceptual framework.........................................................................................6
c.) On the basis of Journal articles review, critically discussing about the quality of
Conceptual Framework for Financial Reporting....................................................................7
d.) Application of conceptual framework in Rio Tinto Ltd in its financial reporting............8
PART B : INTEGRATED / SUSTAINABILITY REPORTING..................................................10
a.) Comparing and contrasting the sustainability reporting of Global Reporting Initiative
(GRI) and International Integrated Reporting Framework of (IIRC)...................................10
b.) Explaining strengths and limitations of conventional accounting based upon conceptual
framework.............................................................................................................................10
c.) Discussing the applicability of the theories learned to explain the contents of sustainability
as well as integrated reports.................................................................................................12
d.) Preparation of a check list that contains the components of integrated report................13
e.) Comparison of Australian company' s sustainability reporting and South African corporate
social reporting.....................................................................................................................14
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17

INTRODUCTION
Conceptual framework for financial reporting can be described as set of objectives,
policies and fundamental established by International Accounting Standard Board (IASB). The
purpose of conceptual framework for reporting is to bring uniformity in the interpretation of
different methodologies of accounting (Abdel-Khalik, 2019). The present project report will
highlight the concept framework in Rio Tinto Ltd, which is a multinational Anglo-Australian
public company trading on LSE, ASX, NYSE and FTSE 100 Component. The organisation
belongs to metals, mining and materials industry. It is headquartered in London and Melbourne,
founded in 1873 and is currently world's one of the largest metal and mining business entities.
The report will include history and development of conceptual framework for financial
reporting in USA, Australia, UK and globally under IASB, Australian accounting profession's
concerns about the quality of conceptual framework. The report will highlight how Rio Tinto has
applied principles and fundamentals of IASB in its reporting. Further, in the next segment of
report, integrated or sustainability reporting guidelines will be discussed, strengths and
limitations of conventional accounting in order to understand the contents of sustainability and
integrated reports. A checklist will be prepared for determining whether South African Harmony
Gold Mining Company Ltd., has disclosed information regarding such contents of integrated
report.
PART A: CONCEPTUAL FRAMEWORK
a.) History of conceptual framework in UK, USA, Australia and globally under International
Accounting Standard Board (IASB)
Before 1929, there were no accounting standards either for public or private companies.
But later, after the crash of stock market in 1929, an act was passed in USA for regulating the
secondary market called as Securities and Exchange Act 1934. The commission of Securities and
Exchange designated Financial Accounting Standards Boards which was given the responsibility
of setting up of the accounting standards within United States. The aim of FASB is to set and
improve Generally Accepted Principles (GAAP). The conceptual Framework of FASB was
started in 1973 for the purpose of establishing sound literature on accounting standards in USA.
From the year 1978 to 2010, many concept statements were published by FASB such as