Regulation of Financial Accounting and Analysis of Equity Segment of Listed Entities in Australian Exchange

TABLE OF CONTENTS
Executive Summary............................2
PART(i)...............................................3
PART(ii)..............................................4
PART (iii) (iv)......................................4

CORPORATE AND FINANCIAL ACCOUNTING
Executive Summary
The intention behind preparation of report is to analyse whether regulation behind preparation shall be
continued or the same shall be dropped and management shall be allowed to disclose content in
annual report voluntarily. Further, the report explores the contribution made by AASB in the
implementation and setting up of AASB and the rationale for not making International Financial
Accounting Standard Compulsory for members.
In the latter half of the report a detailed analysis has been provided with regard to analysis of equity
segment of 4 listed entities in the Australian Exchange dealing in Pharmaceuticals. Further, the report
also provides an in depth analysis regarding the debt and equity position of the 4 companies by
comparing past 4 years.

PART(i)
Regulation of financial accounting is a very important aspect because of a variety of reasons. The
most important aspect is the use of the financial statement by the outside public and interpreting the
financials of the company in its own way, so a proper set of guidelines need to be prescribed for the
accounting to be done and a standard and method to be set so that the different users to the financial
statement interpret it accordingly and can take the future investment decision in the company .Any
hiding of material facts from the outsiders may make the financial statement fake so the financial
statement should be prepare on a going concern basis with all the material aspects and transparent
accounting, as the users to the financial statement are many which include
creditors,government,shareholders,investors,suppliers and others. The financials of the company
shows the past, present and future activities which need to be undertaken by the company which if
not properly managed and regulated can show untrue information to the outside world and can impact
many investors and users.
The second advantage and the need of controlling financial accounting is the ease of comparison of
financials of the company with the other company within same industry so that it becomes easy for the
investors to take decision to pool their surplus fund and which if not properly regulated can show a
different report for different company and the comparison will become very much difficult for the users.
The third advantage, if the financial accounting presentation and reporting is left at the end of the
management than accounting and reporting will be done in such a way that it only shows the positive
growth aspects of the company through which the small investors can be cheated and the
management of the company can follow this as a regular practice.
The other advantage is that all the company needs to appoint an auditor in order to express his
opinion whether the financial statement of the company are free from any material misstatements and
reveals a true figure .
The main aim for financial accounting regulation to ensure corporate transparency and to discipline in
maintenance in books of accounts.
Though there are various points which show the need to control the financial accounting aspects and
not to be left UN attended in the hands of top level manger.

PART(ii)
Australia Accounting Standard Board (AASB) it is a board which sets and provides the standards
required by the public and private entity in Australia. These standards are set in such a way that it
serves as an interaction between the global business and the Australian business and contributes in
the reporting of standards which is recognised globally. The main functions of the Australian
Accounting standard Board are:
(a) to form a framework from which the standards can be evaluated.
(b) to prepare new accounting standards under the act. (Australian Government, 2018)
(c) To prepare new accounting standard which is of use to worldwide.
The flow chart has been shown here as under:
(a) Australian Accounting standard Board identifies the issues which are technical and require to
be seen
(b) The issues which have been identified is referred to IASB
(c) IASB add such issue to the agenda
(d) Further research shall be carried on the issue
(e) Shareholders shall be consulted on such issue.
(f) Accounting standards are issued
(g) Report need to be submitted for any comment from IASB
(h) Finally compliance shall be done.
The IFRS set by the International Accounting Standards Board (IASB) not compulsory for the
member countries of IASB due to following :
(a) To use and implement IFRS in Financial statement is not very easy.
(b) IFRS has got its own drawback to use.
(c) IFRS has its own set of policies and accounting procedure
PART (iii) (iv)
The companies that have been chosen by me for the purpose of analysing under Part B of the report
have an interest under basic materials and are listed on Australian Stock Exchange. The companies
that have been selected for detailed analysis has been enumerated here-in-below:-
(a) Alara Resources Limited;
(b) Alchemy Limited;
(c) Alexium International Limited;
(d) Antipa Minerals Limited.
About the Company