ACCT1077 Financial Accounting Theory

Running head: FINANCIAL ACCOUNTING THEORY
Financial Accounting Theory
Name of the Student:
Name of the University:
Authors Note:

FINANCIAL ACCOUNTING THEORY1
Contents
Introduction:....................................................................................................................................2
Stakeholder theory: Managerial perspective:..................................................................................2
Importance of disclosure of corporate social responsibilities:........................................................2
Audit committee:.............................................................................................................................3
The social initiatives taken by the company:...................................................................................4
Minimum amount of profit must be used for corporate social responsibility purposes:.................4
Improving the quality of internal audit:...........................................................................................5
Cooperate with external auditors to improve the quality statutory audit:.......................................5
Recommendations and suggestions by the audit committee:..........................................................5
Conclusion:......................................................................................................................................6
References:......................................................................................................................................7

FINANCIAL ACCOUNTING THEORY2
Introduction:
Constitution of audit committee is not mandatory for all corporations in Australia.
However, it is recommendatory for all entities to constitute audit committees to ensure
compliance with the provisions of Corporations Act 2001 and other legislative requirements for
corporations established and incorporated in the country. Companies unlike earlier now requires
to make disclosures in relation to corporate social responsibilities (CSR) as per the provisions for
Corporations Act 2001. The impact of audit committee in CSR disclosure shall be discussed to
provide important insight on the topic to the readers in this document.
Stakeholder theory: Managerial perspective:
Before elaborating on the impact of audit committee in CSR disclosure through
stakeholder theory it is only logical to have brief discussion on the stakeholder theory of
managerial perspective. Managerial perspective is one of the essential components in
stakeholders’ theory. It is about the management of an organization and the view point from the
perspective of management (Schwartz, 2017).
Importance of disclosure of corporate social responsibilities:
Corporations in Australia are obliged to comply with the provisions of Corporations Act
2001. As per the Corporations Act 2001 entities listed in the recognized stock exchange of the
country as well as corporations that fulfil certain other conditions must prepare and provide a
separate report on matters related to corporate social responsibilities (Dhaliwal et. al. 2014). An
entity operating in the society has certain responsibilities towards the society as it is using the
resources of the society for its operating purposes. A corporation has a separate legal entity of its
own thus, like any other individual a corporation also has certain responsibilities towards the