Corporate and Financial Accounting: Importance of Corporate Regulation and Analysis of Owners Equity and Debt-Equity Position of Four Australian Companies

Corporate and Financial Accounting 1
Corporate and Financial Accounting

Corporate and Financial Accounting 2
Executive Summary
It is found out that the companies should disclose the financial information by the compliance of
the corporate regulations in place of carrying out disclosure in a voluntary manner as the
regulated disclosure of the financial information takes into consideration the changes taking
place in the external business environment and is cost effective and saves time of the company. It
is also found out that AASB has taken active participation in standard setting process of IFRS
and it is not a compulsion for the member countries to follow IFRS. The four companies of
Australia has been selected listed on ASX namely Accent Group Ltd, Beacon Lighting Group
Ltd, Baby Bunting Group Ltd and Bapcor Ltd from the retail industry to analyze the changes
occurred in different components of owners equity for past four years along with the changes in
the debt-equity levels.

Corporate and Financial Accounting 3
Table of Contents
Executive Summary.....................................................................................................................................2
Introduction.................................................................................................................................................4
Corporate Regulation...................................................................................................................................4
Accounting Standard Setting.......................................................................................................................5
Owners Equity.............................................................................................................................................5
Comparative Analysis of debt and equity position................................................................................10
Conclusion.................................................................................................................................................10
References.................................................................................................................................................12

Corporate and Financial Accounting 4
Introduction
This report emphasizes on the importance and role of corporate regulation in the disclosure of
the financial information in comparison of the disclosure of the financial accounting information
in a voluntary method by a manager. Besides this, it also emphasizes on the role and
participation of the Australian Accounting Standards Board in the global accounting standard
setting process and the reason behind the non compulsion of the members countries of IASB to
follow IFRS. Along with this, it also focuses on the analysis of the items of equity present in the
balance sheet of the four companies of Australia that are listed in ASX related to same industry
and find out the reasons for the occurrence of the change. It also entails the information related to
the comparative analysis of the debt and equity position of these four firms.
Corporate Regulation
It is identified that the regulation of public reporting for firms should be mandated by
government regulations and not be disclosed by the firms in the way of usage of their goodwill,
private lawsuits, gatekeepers and market discipline to access the public securities market despite
of gaining adequate incentives for disclosing the information in a voluntary manner at social
optimal levels. The main reason behind the reporting of the financial information should be
regulated is the existence of the market failure (Leuz and Wysocki, 2016).
The regulation of the disclosure of the financial information through government regulation
facilitates in the reduction in the enforcement costs, opportunistic behavior, redundancies in
information production, mitigation of the risks related to externalities in case of the absence of
the internalize of the consequences of their disclosure decision. Apart from this, there is an
existence of the difference between countries in different aspects such as corruption, culture,
institutional development and political and legal regimes. This is the reason that there is an