Financial Accounting & Reporting: Institutional Arrangements and Conceptual Framework

Financial Accounting
and Reporting

Table of Contents
INTRODUCTION ..........................................................................................................................3
TOPIC 1...........................................................................................................................................3
Institutional arrangements for setting accounting standards in Australia...................................3
TOPIC 2...........................................................................................................................................6
Conceptual framework : Definition, recognition and measurement of elements in general
purpose financial accounting.......................................................................................................6
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Accounting standards can be defined as group of written guidelines comprising of
procedures, principals, rules, regulations and standards which are required to be accepted and
following while preparing books of accounts or undertaking any financial practice. They focuses
on bringing consistency and uniformity in statements (Shimamoto and Takeda, 2020). The report
consists of two topics. First topic discusses about arrangements done for setting accounting
standards in Australia along with its purpose, reporting entity, objective and characteristics of
financial reporting. Second topic is about the conceptual framework defining its definition,
recognition and measurement.
TOPIC 1
Institutional arrangements for setting accounting standards in Australia.
It refers to a set of documents that provides the structure for financial statements. They
works on the basis of rules and regulations framed by Australian Accounting Standards Boards
(AASB) and gives guidance to publicly listed firms about the manner they have to follow to
make there reports. It serves number of services which are discussed below.
Purpose
 It make sure that standards are based on accounting principles and requirement of
external parties about the access to information could be fulfilled.
 They ask companies to work according to IFRS rules for making them accountable to
public.
 It directs businesses to disclose all the information to various stakeholders for assisting
them in taking decisions related to investment in firm.
 The most important aim of these standards is to check that accounts made by companies
are reliable and transparent (Maroun and van Zijl, 2021).
Reporting entity
It refers to the disclosure of all types of financial reports and statements which are useful
for external parties like shareholders, government etc. for taking and analysing there decisions
and performance of company. This can be related to a single business or a group of parent and
its subsidiaries. It also considers following points to check whether various users are dependent
on General Purpose Financial Statements or not.