Contemporary Accounting Theory

Running Head: CONTEMPORY ACCOUNTING THEORY 1
Australian Company (Cardno) and South African Company (Aspen Insurance Company)
Assessment
Institution

Contemporary Accounting Theory 2
Executive Summary
The main notion behind the implementation of the conceptual framework (CF) in financial
accounting if centered on the need of identifying essential elements in the process of assessing
financial statements. The main objective of the conceptual framework is helping firms in
acquiring and assessing financial health status. Therefore, the prospective objective of this paper
will be assessing critically the conceptual framework and how it has been applied in an ASX
stock company: Cardno Company Limited (CDD) and how the company has employed the
framework in selecting financial events, statements and events. On the other hand, in section B
the paper will specifically entail contrast of global integrated reporting system over sustainable
reporting rules that entail critical analysis of the strengths and limitations of financial accounting
rules centered on the conceptual framework. Moreover, the paper will also assess the framework
against a South African Company (Aspen Limited Company), based on an index, against the
Australian company’s integrated report.

Contemporary Accounting Theory 3
Introduction
This paper is prospected to outline critical financial rules that are critical and underlie the
procedures used in assessing and laying down the two company’s financial statements and
economic valuation. Considering these financial statements is effectively applied by company’s
key shareholders in efficiently formulating the conceptual framework, which is relevant in
assessing both companies: Cardno and Aspen Company that is the Australian and the South
African companies precisely. Moreover, it is relevant for assessing the IASB in enactment of
revised and standardized accounting rules and procedures that are relevant for application of
financial statements in the two companies while application of financial protocols or solving
problems evident in the compliance of events to prospective accounting statements (Ahmad &
Arshad, 2014). Moreover, the paper will specifically evaluate the conceptual framework as
purposed in financial reporting and it relevancy and application in an Australian company
(Cardno Company). On the other the second section will be evaluating sustainability and
integrated reporting of the conceptual framework for the South African company (Aspen
Company).
Part A: Conceptual Framework
a. Review of the history and CF’s
The development of the conceptual framework in the US, UK, Australia was basically prescribed
by Moonitz and Sprouse considering the accounting methods and practices in context 1961 and
1962. In 1965, a theory was created by Grady centered on analysis of present accounting
practices which resulted to implementation of the Accounting Principles Board (APB). In the
long run, there was formation of a true blood committee in 1972 that formulated the True blood

Contemporary Accounting Theory 4
report (Bellantuono, Pontrandolfo & Scozzi, 2016). The major components of the report
included:
 An outline of the 12 objectives relating to accounting and 7 qualitative characteristics
possessed by financial data
 Objective 1: aimed at the needs of financial statements users.
 Objective 1: should cater for clients with restricted ability of requesting financial data.
On the other hand, in 1974 the Accounting principle board was replaced by the FASB that
directly focused on the conceptual framework project. Moreover, considering this about 6
statement of financial accounting concept was drafted from 1978 to 1985. Initially the first
SFACS was normative although SFAC was linked to the recognition and identification of vast
description of the present practices. Due to this there was much criticism, from 2005 the IASB
and merged with a specific objective of enhancing the revised CF which would be utilized by the
board entirely known as the convergence project. In 1976, UK initial moves considering the aims
and identification of users provided by the corporate reports. The report was specifically focused
in addressing the following:
• Addressing community’s rights and terms of accessing financial data
• In the end, content is entirely not acceptable by the accounting experts.
On the other hand, in 1991 there was adoption of the IASC’s in evaluating the conceptual
framework. The IASC framework was specifically incompliance with the US and Australian
framework consequently was known as an IASB framework. BROMWICH, MACVE &
SUNDER (2010), states that in Australia, the degree of progress is very slow. There are only
four statement of accounting concepts (SACs) that were released which include: