Aspects of Corporate External Reporting

Running head: CONTEMPORARY ACCOUNTING THEORY
1
Aspects of corporate external reporting
Students name
Name of the university
Authors note

CONTEMPORARY ACCOUTING THEORY 2
Executive summary
The scope of this report will include concerns regarding contemporary accounting as
provided for under the different guidelines and regulations of the International Accounting
Standards Board (IASB). It is presented in two main sections with section A majorly discussing
the various principles regarding the conceptual framework of accounting. This will include a
look at the literature review of the contemporary accounting in countries such as the US, UK,
and Australia respectively. Imitations and strengths concerning the framework are as well
covered within the first section. To wind up with the first section, the Australian professions
concerns together with the concerns of the academic are covered. Section two, on the other
hand, covers the practical applicability of the sustainability reporting as required by the IIRC and
GRI frameworks of accounting. This as well involves an assessment of the usefulness of the
frameworks and their strengths and limitations. A checklist of the South African company
regarding the disclosure requirements as compared to the Australian company is provided. The
second section of the report is concluded with the additions that the Australian Company
should include so as to ensure sustainable reporting as required by the GRI and IRC frameworks
of accounting.
Introduction
A continuation of the report is provided with more elaborate explanations of the
concepts. Key definitions of important aspects are availed in the main discussion of the
report. The important guidelines and regulations of contemporary accounting are
further presented in the general discussion. The theoretical aspect of contemporary
accounting and its strengths and limitations will certainly be the points of focus. The

CONTEMPORARY ACCOUTING THEORY 3
academic and professions concerns will, therefore, be part of the discussion in part A of
the report.
A). Review of the conceptual framework literature in the US, UK and Australia
respectively
The main aim for the introduction of the conceptual framework was to assist
accounting professions when preparing financial reports. Since the framework is not an
accounting standard on its own, it is a combination of the different accounting principles
and guidelines. These guidelines are well stated under the US GAAP. These include
guidelines under the IFRSs and the IASB which required for financial statements to
reflect characteristics such understandability among others (Adams,2013). The GAAP
however first became applicable when the US experienced the collapse of the stock
market in 1929. The collapse of the stack meant that the public together with the
investors would lose confidence and trust in the financial market (Adams, 2013). To
change such a situation, the Securities Exchange Commission of the United States
decided to formulate the Generally Accepted Accounting Principles, (GAAPs).these were
aimed at restoring confidence through guidelines that called for transparent accounting.
On the other hand, however, the need to cope with other countries in Europe and other
regions was a major drive for the UK to devise a way through which accounting
standards would emphasize (Amato and White,2013). That is why the UK came up with
what is known as the UK GAAPS. These principles had the major aim of ensuring similar
or related standards to those that other countries applied in the presentation of

CONTEMPORARY ACCOUTING THEORY 4
financial statements. It is worth noting that the UK GAAP are mainly operative in the UK
and the Republic of Ireland. Unlike the other countries, Australia initially had a sound
and operative national accounting system. However, with the introduction of the IFRSs,
the AASB found it useful and important to take into consideration the requirements of
these international standards.
B). Professions concerns about the conceptual framework
The improvement of the conceptual framework of accounting has left many
professions in Australia uncertain about two main issues. The very first concern that the
framework leads to is the issue a proper and clear definition of what an entity stands for
(AASB,2015). The framework is found to be having a rather different meaning of an entity in
terms of definition as compared to that of the Australian Accounting Board (AASB,2018). This
diversity in concepts and explanation negatively impacts on the guidelines such as
understandability and relevance. It does not show any relevance if two accounting boards
define the same principle differently and yet they work hand in hand with each other
(AASB,2013).
The second concern that the Australian professions raise against the framework is the
issue regarding the reporting guidelines. In Australia, the companies are at liberty to prepare
the type of reports that they prefer. However, the new form of the framework has
consequently led to a number of impacts (Barker and Teixiera, 2018). For example, the
conceptual framework means that two similar companies running the same type of business
can end up preparing different financial reports (Bradford et al, 2017). One company would