Financial Accounting Process: Regulatory Framework, Accounting Principles and Standards, Shares vs Debentures

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FINANCIAL ACCOUNTING PROCESS
FINANCIAL ACCOUNTING PROCESS
NAME OF STUDENT:
NAME OF INSTITUTION:

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FINANCIAL ACCOUNTING PROCESS
Regulatory framework in Australia.
In Australia the purpose of financial reporting is to drive financial information in the
corporate world for the benefit of the shareholders and other stakeholders. In the conceptual
framework guideline, the information should communicate the financial healthiness of the
enterprise and that information must be of interests to the users (Christian & Ludenbach, 2013).
Generally, shareholders are the owners of the corporate and any financial reports prepared must
be aimed for the benefits of the owner. In a conceptual framework, the existing shareholders
evaluate and interpret the performance of their enterprises on the effectiveness of the financial
reports presented to them. In inconformity to the international financial reporting standards
(IFRS) and the Australian Accounting Standards (AAS), accountants and practicing finance
managers should present and communicate their accomplishments in the organizations in a well
and simple financial statements to the owners periodically as regulated in the act (Lev & Gu,
2016).
According to Tomaszewski “et al” (2018) the conceptual framework represent a
structured format pf accounting that is intended to set the fundamentals and objectives for the
accounting standards development. Under the regulatory principles the conceptual framework
creates the required concept expected to lead the functions, nature and limits of financial
reporting whether principally based or under set rules. Further the absence of the conceptual
framework would lead to an ad hoc guidance which can be incoherent and inconsistent with the
obvious low ramifications (Tomaszewski “et al” 2018).