University Corporate External Reporting Analysis: ACCT20074 Report

This report provides a comprehensive analysis of corporate external reporting, focusing on the conceptual framework and sustainability reporting practices. Part A delves into the history and development of the conceptual framework, examining its evolution in the USA, UK, Australia, and globally under the IASB. It discusses the Australian accounting profession's concerns regarding the application of the IASB/IFRS framework and critically evaluates academics' concerns about the quality of the framework. The report also analyzes how Sandfire Resources NL applies the conceptual framework in its financial reporting, including the statements prepared, the principles applied, and the qualitative characteristics. Part B examines integrated and sustainability reporting, comparing the IIRC's integrated reporting framework with the Global Reporting Initiative's sustainability reporting framework. It discusses the advantages and disadvantages of conventional accounting and the benefits of sustainability reporting. The report further compares and contrasts the integrated report of Sappi Limited, a South African company, with the corporate responsibility practices of an Australian company.

Running head: CORPORATE EXTERNAL REPORTING ANALYSIS
CORPORATE EXTERNAL REPORTING ANALYSIS
Name of the Student:
Name of the University:
Author Note

1CORPORATE EXTERNAL REPORTING ANALYSIS
Executive Summery
This report is prepared to analyse the concept and the various aspect of the conceptual
framework and the sustainability reporting of the firm. This report analyse the every aspect of
both the concept of the financial reporting. The paper also analyse the annual report of the
Sandfire Resources NL an Australian based company and the Sappi Limited an Africa based
company to analyse how the two different companies of two different countries applies the
conceptual framework in their financial information reporting and preparing the sustainability
reporting for their firm.

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Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Part A. Conceptual Framework..................................................................................................3
Requirement a........................................................................................................................3
Requirement b........................................................................................................................4
Requirement c........................................................................................................................5
Requirement d........................................................................................................................6
Part B: Integrated/ Sustainability Reporting..............................................................................7
Requirement a........................................................................................................................7
Requirement b........................................................................................................................8
Requirement c........................................................................................................................9
Requirement d......................................................................................................................10
Requirement e......................................................................................................................12
Conclusion................................................................................................................................13
References and Bibliography...................................................................................................14

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Introduction
The report is prepared to analyse the history and the development of the conceptual
framework for financial reporting in USA, UK, and Australia and globally under the
international Accounting Standards Board. The report also discuss the applications of the
IASB or the IFRS conceptual framework for financial reporting. Further, this report discus
about the quality of the conceptual framework for financial reporting. The report consider
that the Sandfire Resources NL to identify how the company applied the conceptual
framework in their reporting of the financial information. The reports company prepared
under the conceptual framework and what are their component. This report also analyse the
balance sheet of the firm to understand the principles used by the firm to report its asset and
liabilities in their annual report. While, the other part of the report discuss about the
sustainability reporting. The report compare and contrast the sustainability guideline of the
global reporting initiative and the international integrated reporting framework of the
international integrated reporting. Further, this report is explains the advantages and
disadvantages of the conventional accounting. This also explain the uses of the sustainability.
The report also compare the Sappi Limited as the South Africa company to compare and
contrast an integrated report, the Australian company corporate responsibility.
Discussion
Part A. Conceptual Framework
Requirement a
The conceptual framework have a long history as this is firstly introduced by the Plato
as the Plato’s conceptual model in the beginning of current model. A long time ago, the
accounting concepts are started developing by the United Kingdom’s Accounting Standards
Board in 1991. This model the involved various developments and recommended by the

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boards in the account ting practises in 1940. This was initially, developed by the Plato for and
use as for sorting footings, and developing a common nomenclature in some countries. Then,
as the time passes the various development take places in the conceptual framework as need
of the framework is increases. The accounting framework developed rapidly after its
introduction to till date (Maas, 2016). The various country developed its own framework in
the basis of the international accounting standards that must be implemented by the every
company of the country. The U.S, U.K and other countries also developed its own framework
for its companies. The main aspect of this framework is to provide the uniformity among the
financial reporting of the difference companies.
Requirement b
International Financial Reporting Standards is the accounting standard of the
Australia companies developed by an independent government group of the Australia. The
IFRS is developed to provide the guideline to the company for the financial information
reporting of the companies. This standards helps the firm in reporting their financial
information in their annual report for the stakeholders. This standards have the several
advantages in the financial information reporting of the firm but also have the several concern
related with it. The International Financial Reporting Standards have a concern with the
materiality of the information (Pelger, 2016). The International Financial Reporting
Standards have the several materiality issues related with it. As in this system of reporting the
firm can perform various material misstatement and the frauds. The material misstatement is
very high in this accounting reporting of the information to the stakeholders of the firm that
can misguide the readers of the financial information of the company.
The accountant of the firm, while reporting the financial information of the firm by
using the International Financial Reporting Standards also face the issue regarding the
valuation of the assets and the liabilities of the firm. The International Financial Reporting

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Standards suggest the value the assets and the liabilities of the firm in the basis of their initial
cost of acquiring the assets of the firm not the current or present value of the assets and the
liabilities of the firm. Hence, the reported value of the assets and liabilities shows the
difference in the book and the actual price of the assets and liabilities (O’Neill, Sohal &
Teng, 2016). Mainly, this is increase the value of the asset in the books of account. The
reorganisation of the asset is also the have the issues in this accounting system. Apart from
that, the firm need to do the several accounting process and research to satisfy the
requirements of International Financial Reporting Standards. Apart from that, there are the
several other issues in the implication of International Financial Reporting Standards in the
financial reporting of the firm.
Requirement c
The quality of the conceptual framework have the several advantages and the
disadvantages in the financial information reporting of the firm in the academic point of
view. The quality of the conceptual framework ensure that the information shared by the firm
is true and correct, which provides the real picture of the firm’s position. The quality of
conceptual framework helps the firm to report their financial information in a correct way.
This also ensure the truthiness of the accounting information reported by the firm in their
annual report (Neel, 2017). This helps the investors to understand the financial performance
and the position of the firm to make the several investment related decisions.
While, the conceptual framework of creates several issues in the initial stage of its
implication as it clashes with the already existing framework of the company. Further, this
framework also faces the issues relating the material misstatement practices of the firm in the
financial reporting processes. This also faces the issues in the terms of the valuation of the
assets and the liabilities. These are some major issues of the conceptual framework in the

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financial information reporting of the firm apart from that the conceptual framework also
faces the various several issues.
Requirement d
The Sandfire Resources NL is Australian mining and exploration company which is
rank holder company of copper mining. The Sandfire Resources NL fully owned the
DeGrussa Copper Gold mine of the Perth in West Australia. The main operation of the
Sandfire Resources NL are discovering the resources by drilling out, financing, feasibility,
development and setting up the construction to first copper production within three years. The
fully owned company of the Sandfire Resources NL that is DeGrussa is the largest high
quality copper producer of the Australian mining industry (Sandfire, 2019).
 Application of the Framework: - The Sandfire Resources NL applies the conceptual
framework in their financial information reporting. The company follows the
Australian standard to prepare the annual report of the company. The Sandfire
Resources NL discloses in their annual report of 2018 that the company follows the
Corporation Act 2001 and the several Australian accounting standards those are
developed in the basis of the International Financial Reporting Standards in their
financial information reporting. The company apply the framework in considering the
items of the final account including Profit statement, Balance sheet Statement, Cash
flow statement and the financial notes. The firm also apply the framework in
preparing the format of the different account prepared in the final report (Capkun,
Collins & Jeanjean, 2016). The company also apply the framework while passing the
several accounting entries related to the transaction of the firm.
 Statements prepared: - The Sandfire Resources NL limited prepared the profit
statement of the company that contents the income and expenses related information
of the firm for the given period. The second statement is prepared by the firm is the

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Balance sheet statement that content the information of the assets and the liabilities of
the firm along with the equity capital of the firm. The third statement is prepared by
the firm is the cash flow that content the all details of the cash inflow and the outflow
of the firm for the year 2018. Lastly, the company prepared the change in equity of
the firm that content the details of the change in the equity of the firm for the year
2018.
 Principle applied in accounting: - The annual report of the firm for the year reported
that the firm used the historical cost in the financial reporting except the trade
receivable, cash settled share based payments and valuation of the investment. These
are calculated by using the principle of fair value.
 Qualitative characteristics: - The financial report of the Sandfire Resources NL
shows the quality in all the aspect of the financial reporting of the firm as the firm
follows all the requirement of the Australian based conceptual framework for
reporting the financial information.
Part B: Integrated/ Sustainability Reporting
Requirement a
The main purpose of this part is to effectively identify key elements of Integrated
reporting framework of IIRC and the sustainability reporting framework which is provided by
Global Reporting Framework (Cheng et al., 2014). Both the reporting framework provides a
guideline which must be followed by businesses for the purpose of reporting regarding the
environmental and social responsibilities of the business. The reporting framework followed
by a business depends on the nature of the business and type of disclosures which the
business needs to provide in the annual report of the business. The two frameworks are used
by businesses for the purpose of effective reporting and also for eliminating the negative
effects of its business activities on the community, environment and society. In general term,

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integrated reporting framework allows the management of the company to report on the
financial aspect as well as non-financial aspects of a business (Dumay et al., 2017). This is
done in order to ensure that greater value can be generated for the shareholders of the
business. On the other hand, sustainability report throws light on sustainable activities which
are undertaken by the business in pursuance of CSR responsibilities of the business.
The discussion shows that both types of reporting framework which is adopted by the
business so that proper comparison can be done between the requirements of integrated
reporting and sustainability reporting framework. The purpose of implementation of
sustainability framework is to ensure that the management of the company adheres to social
responsibilities of the business. The integrated reporting framework allows the management
to respond to the non-financial aspects which plays a vital role in portraying the performance
of the business along with financial aspects (Flower, 2015). It is for these reasons that the six-
capital concept was introduced in integrated reporting framework which is used by the
business. The above discussion points out clearly that there are slight differences between the
two frameworks which is used for reporting.
Requirement b
Conventional accounting practices which is followed is related to numerous
advantages and disadvantages which is associated with sustainable reporting practices,
followed in a business. The traditional reporting framework which was used by businesses
did not appropriately follows appropriately. In according to the requirements of sustainable
reporting framework, the stakeholders can get appropriate information regarding the
sustainable practices which is undertaken by the business and taking into effect the overall
impact of the activities which are undertaken by the business (Dumay et al., 2016). The
traditional accounting system does not cover aspects such as social responsibilities of the

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business and therefore do not provide full information regarding the financial and non-
financial activities of the business as the is not related to internal performance of the business.
There are benefits and drawbacks which are associated with the conventional
accounting practices which is related to integrated reporting framework. The accounting
process which is followed in case of integrated reporting framework provides full disclosures
(Owen, 2013). This would result in maintaining transparency and accountability in the
reporting framework of the business and would also result in proper display of the financial
information of the business. The limitation which can be associated with the integrated
framework is related to accumulation of financial and non-financial information after the
silos are broken down. In addition to this, the accountants of traditional accounting system
face issues in respect of measuring the financial and non-financial information of a business
(Atkins & Maroun, 2015).
Requirement c
In order to effectively describe the concepts and application of sustainability reporting
and integrated reporting, various theories can be applied in this respect.
Integrated Reporting
In order to effectively analyze the integrated reporting concepts, application of agency
theory and stakeholder’s theory can be done. The stakeholder’s theory states that the
management of the company is depended on the society for its resources and earnings and
therefore the business must also consider the interest of the society and contribute towards the
needs of the society. The stakeholder’s theory also states that the business must consider the
interest of all stakeholders equally before taking any major decision regarding the operations
of the business (Brown & Dillard, 2014). As per Agency theory, the main role of the business
is to act as an agent of the stakeholders and take all the steps so that the business is able to

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enhance the wealth of the business. The main purpose of introducing the integrated reporting
framework is to properly report to the stakeholders regarding the financial and non-financial
aspects of reporting (Hoque, 2017). This would provide the stakeholders with appropriate
information regarding the value which is created by the business.
Sustainability Reporting
In the case of sustainability reporting, the two theories which can be applied are
stakeholder’s theory and legitimacy theory. The legitimacy theory states that the businesses
are always engaged in reporting social and environmental performance for the purpose of
maintaining social sustainability. The two theories appropriately show that the business
organization appropriately reports regarding the financial and non-financial aspects so as to
ensure that the stakeholders are aware of the overall performance of the business during the
period.
Requirement d
Integrated Reporting Index
Responsibility: Individual Reports who are responsible for Governance
Strategic concentration: Insights of the strategies
Relationship with the stakeholders: Proper maintenance of Relationship with
Stakeholders
Materiality: Factors which affect the ability of the business to create value over time.
Governance: Information related to governance structure
External and organisational review: The activities of the organisation and its position
Risk and opportunity: Risks and Opportunities engaged in the process of value creation
Business model: Information related to the business model already implemented
Preparation basis and presentation: Basis through which there is ascertainment of

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material issues
Performance: Information related to the fulfilment of strategic goals
Table 1: Integrated reporting index
(Source: Integratedreporting.org 2019)
Information Disclosure by Sappi Ltd
The annual integrated report which is prepared by the management of Sappi Ltd for
the year 2018 shows that the management of the company has adhered to the provisions of
IIRC. The integrated reported framework requires Sappi ltd to appropriately show the
responsibility statement which puts forward the main personnel who would be handling the
governance of the business (Eccles & Serafeim, 2014). These individuals constitute of Chief
Executive Officer, Chairman and Finance Director of the organisation. The management of
the company has also provided a detailed plan regarding the strategic actions which are to be
taken by the business. In addition to this, the management of the company has addressed the
stakeholders of the business appropriately and revealed the performance of the business. As
per the criteria of materiality, the management of the company has revealed some material
issues and activities which has an overall impact on the operations of the business (Fasan &
Mio, 2017). In addition to this, the management of the company has appropriately revealed
regarding the business model which is followed which mainly consists of main relationships
and resources, strategic movement affecting the business model, value chain, high material
risks and effect on capital.
The management of the company has also properly highlighted the risks and
opportunities which are available to the business in future and how the management of the
company is handling the risk exposure of the business. In addition to this, the business model
which is followed by the business are appropriately disclosed in the annual reports with