The London Stock Exchange's subsidiary organisation (FTSE) reexamined

This report will highlight specific financial and operational views of the chosen organisation while conducting the necessary analysis (Myers et. According to the specification and the parameters upheld, Frasers Group plc (formerly known as Sports Direct International plc) is chosen since it is believed that the company is appropriate to further examine IFRS standards with the report. The IFRS Foundation works in order to enhance the public interest by creating IFRS standards that are interoperable with national standards.

FINANCIAL REPORTING AND ANALYSIS
BRIEF BACKGROUND
The financial analysis based on the financial statements or other pertinent resources is the only reason
this analysis was made. The report needs a particular company to advance the issue in order to
continue (Asllanaj, 2008). The choice of the company had to meet two requirements: it had to be
listed on the FTSE and it couldn't be a provider of financial services. The London Stock Exchange's
subsidiary organisation, FTSE, now measures share prices. Its stock indices are widely utilised
throughout the world, as well as by analytical organisations (Charles et. al., 2012). Therefore, in
accordance with UK company legislation, stock indexes are a specific thing that can measure the
excellent performance of the organisation. The report should be released in a format that is useful to
the company's senior management. This report will highlight specific financial and operational views
of the chosen organisation while conducting the necessary analysis (Myers et. al., 1984). The study
that was conducted for this report is heavily reliant on the ratios that were calculated and what they
reveal about the organisation. According to the specification and the parameters upheld, Frasers
Group plc (formerly known as Sports Direct International plc) is chosen since it is believed that the
company is appropriate to further examine with the report. This specific company will be the focus of
the report's subsequent section, and an analysis will be done in that light.
The founder of the British retailing organisation Frasers Group plc, formerly known as Sports Direct
International plc, is Mike Ashley. The company was established in 1982. The business is a
multinational corporation that has 500 outlets worldwide and has established itself as the top athletic
goods retailer in the UK. Sales of sporting items and equipment are made by the business (Helfert,
2001). The company works with a lot of sporting brands and bases its operations on the
sportsdirect.com brand. The company's unique selling point is that it runs on a low margin and owns
some other shops in addition to some of its own company activities.
The specific goals and emphasis of the firm is to create the maximum potential profits and establish
themselves as the top athletic company in the world and establish the business reputation in the global
scale.
The argument above could clearly demonstrate that the company is looking for the development in
the European market as it is corroborated by the comment of the business chief executive, David
Forsey. The company's development strategy also includes closing its tiny stores around the nation
and replacing them with larger ones (Myers et. al., 1984).
ACCOUNTING STANDARDS BY THEMSELVES DO NOT CONSTITUTE A COMPLETE
REGULATORY FRAMEWORK
They are insufficient to fulfil the regulatory framework's objectives (enforcing compliance with
GAAP). Legal and market rules are also necessary to completely govern the creation of financial
statements as well as the duties of corporations and directors (e.g. Companies Act 2006, FCA and
LSE) According to the Companies Act of 2006, financial statements must give a True & Fair picture,
and IFRS compliance is necessary for this to happen (Lewis and Pendrill, 2004).

What the IFRS Foundation seeks to accomplish
Through creating IFRS standards, to increase transparency, accountability, and efficiency in the
global capital markets. The IFRS Foundation works in the public interest by promoting growth,
stability, and trust in the global economy (Ball, 2013).
IFRS Structure
A three-tiered structure exists.
3) Public Accountability
 IFRS Foundation Monitoring Board
 They enhance the public accountability of the IFRS Foundation
2) Governance and Oversight
 IFRS Foundation Trustees and IFRS Advisory Council - They are responsible for the
Governance and Oversight of the IASB
1) Independent Standard-setting and related activities
 The IFRS Foundation oversees the IASB in setting the accounting standards and the IFRS
Interpretations Committee interprets these accounting standards
IASB standard setting process
1) Setting the Agenda
2) Research projects - Discussion Paper
3) Standard-Setting Projects - Exposure Draft
4) Maintenance - IFRS interpretations Committee
Norwalk Agreement 2002
The MoU was formalized in this agreement.
Both the IASB and FASB pledged to do their best to
 As soon as it is feasible, make their current financial reporting standards entirely
interoperable.
 To organize and structure their potential work plans in order to ensure that suitability is
maintained once attained. For the IASB to achieve its objective in relation to the
harmonization of accounting standards it is important that it works closely with national
standard setters.
In order to establish a standard with broad worldwide support, the IASB is attempting to synchronise
its work schedule with NSS so that when it adds a topic to its agenda, NSS does the same. A review
of all standards where IFRS and national standards differ significantly is also planned (Ball and
Brown, 1968).

WHY CORPORATE REPORTING IS NECESSARY IN CONTEXT OF THE CAPITAL
MARKETS
Businesses typically share economic data through the financial reports they offer. Accounting
records, management comments on those financial statements, and other compliance filings are
frequently included in financial reports. Some companies also engage in voluntary supplemental
communication, including organization forecasts, analyst demonstrations, additional business reports,
and press releases on crucial subjects. While other businesses also provide all of this information on
their websites, other companies issue these reports in physical copy and submit them to the
controllers. Information intermediaries including financial analysts, subject matter experts, and the
financial press also give some disclosures about companies. There is proof in the finance literature
that players in the capital market rely on financial information to make a variety of decisions (Ball
and Brown, 1968). No stock market in the entire world is said to be perfect, and most stock markets
are said to have poor form market efficiency. Weak form efficiency means that the market makes
investment decisions based on historical corporate financial data. The implication is that capital
market participants receive information that serves as a basis for fair stock price determination so
they can come to and carry out informed investment and financing decisions through the financial
reports and exposes prepared by auditors for corporations. According to a vast body of research, a
large variety of market players, including authorities, lenders, and the financial community, rely on
business financial data to calculate stock prices and make investment decisions. This suggests that
steps must be taken to ensure that companies correctly prepare their financial statements. This has
implications for the way Frasers Group plc governs the accountancy industry (Ball et. al., 2000)
The organisations that oversee accounting practise must make sure that those who create financial
statements for businesses are qualified to do so and really follow the correct procedures. Are only
qualified individuals hired to compile financial statements for firms registered on the stock exchange,
as required by UK regulator of accounting practise? Do the companies compile their financial
accounts in accordance with the necessary standards? Are the economic statements of publicly traded
companies audited by licenced accountants in accordance with the necessary auditing standards?
Only when the answers to these questions are positive can one start to anticipate listed companies to
provide high-quality corporate financial information, which should then lead to high-quality capital
market decisions.
Financial reports created using global financial reporting standards give stockholders a greater
understanding of and appreciation for the risk involved in decisions about the flow of economic
capital. According to research (Nobes and Parker, 2008), marketplace participants use economic data
to make broad investment decisions that aim to minimise financial risks and maximise investment
returns. The publication of accurate financial information by corporate organisations is a "sine qua
non" for the growth of the capital market, one can only infer from the aforementioned. It is crucial to
raise the calibre of financial disclosures made by listed companies through improved financial
reporting given the crucial role that high-quality financial information plays in the growth of capital
markets. How can this be done is the question. This can be accomplished by mandating that publicly
traded companies report in accordance with accepted accounting standards and forcing the regulator
of the practise of accounting to adhere strictly to those standards.

The accounting approach for financial dealings and the minimal revelation requirements with regard
to certain financial dealings are prescribed by accounting standards. A consistent set of guidelines for
reporting reduces arbitrary reporting decisions and potential for manipulation, which raises the
calibre of financial reports. High-quality accounting standards (Barth et. al., 2008), improve financial
reporting, which in turn improves business decision-making. Therefore, it is anticipated that the
implementation of Financial Reporting Standards (IFRSs) will result in better financial reporting.
Financial reporting's goal is to "present evidence on the financial status, presentation, and variations
in financial situation of an enterprise that is relevant to a wide variety of users in making financial
choices," according to the International Accounting Standard Board (IASB).
The goals and functions of financial reporting are summarised in the following points:
 Giving management of a company information that is utilised for planning, analysis,
benchmarking, and decision-making.
 Giving investors, promoters, debt providers, and creditors information that enables them to
make thoughtful judgments about investments, credit, etc.
 Providing details on many areas of an organisation to shareholders and the general public in
the case of listed firms.
 Giving details on an organization's financial resources, claims against those resources
(liabilities and owner equity), and how these resources and claims have changed over time.
 Describing the methods, a company uses to acquire and use different resources.
 Communicating with various stakeholders about performance management and how
rigorously and morally an organisation is carrying out its fiduciary duties and obligations.
 Giving the statutory auditors information, which helps the audit.
 Improving social welfare by taking into account the interests of the government, unions, and
workers.
CORPORATE GOVERNANCE
Corporate governance is "a framework in which firms are directed and governed," according to
Frasers Group (Claessens et. al., 2000). The execution of corporate governance is the board of
directors' responsibility. The shareholders' responsibility in corporate governance is to elect directors
and auditors and to ensure that they have implemented the proper governance framework. While the
auditor's responsibility is to evaluate the financial statements that management presents.
Recognized possession in the company, stock possession by managements and decision-making
officers, board of directors characteristics, the CEO's age and tenancy, and the sensitivity of CEO
pay-for-performance are a few examples of corporate governance processes (Covrig et. al., 2007).
Large numbers of institutional investors will have the chance, means, and capacity to keep an eye on
and affect the manager. In addition to encouraging supervisors to use flexible accruals to improve
company performance in the period prior to the sale of shares or the exercise of choices, ownership of
shares and/or choices by directors and executive officers will also boost the well-being of the
directors and executive officers (Hassan et.al., 2021). The operations of the business are supervised
and managed by a board of directors. Directors have a duty to protect the shareholder's interests
because they are both the owner and the representative of the company. The qualities of the board are

shown by the proportion of independent directors, CEO duality, and board size. The CEO's term and
age have an impact on how effectively they run the business. The CEO's grasp of the business and
industry deepens with age or length of service, which improves the company's success (Haroon amd
Rizvi, 2020).
Corporate governance, stock market returns in 1990, and firm value as measured by Tobin's Q are
significantly correlated, according to P.A. Gompers' research (Gelter and Puaschunder, 2020). L.D.
Brown and M.L. Caylor found that companies with better management are more likely to be
profitable, more highly regarded, and to pay out greater cash dividends to shareholders
(Abhayawansa et. al., 2021).
Managers frequently focus on initiatives that benefit them personally while appropriating the
company's resources (Ramond et. al., 2007). Effective corporate governance decreases the 'right to
control' granted to managers by shareholders and creditors, increasing the likelihood that managers
will invest in initiatives that produce net positive present value. This supports the performance
measurements used by L.D. Brown and M.L. Caylor that improved management results in better
operational performance for businesses. According to empirical evidence, efficient corporate
governance is linked to investor protection (Gelter and Puaschunder, 2020.
Board size and firm performance
Regarding the connection between board size and company performance, there are two competing
theories. First, consider that the success of the company can be significantly impacted by the size of
the board. According to research, there is an adverse correlation between board size and favourable
financial statistics including profitability, asset utilisation, and Tobin's Q (Abhayawansa et. al., 2021).
S. Cheng's empirical research demonstrated that organisations with more board members will have
less variation in their performance.
The second argument put out was that a sizable board would improve business performance. The size
of the board affects how well directors can supervise and regulate managers. R. H. and Adam In order
to successfully monitor the corporation, Mehran proposed that the board should be large (Toma,
2009). A larger board will facilitate more efficient management of business. Information will be easy
to access on large boards (Turktas et. al., 2013)
Board independence and business performance
Previous research on the connection between director independence and firm success produced mixed
findings. The more independent the board of directors, the larger the percentage of outsiders (Vidal
et. al., 2012). No correlation was observed between the percentage of outsiders and Tobin's Q, ROA,
asset turnover, or stock returns.
Audit committee and firm performance
The audit committee, as a committee, is crucial in assuring and overseeing the accounting process so
that management may give all stakeholders information that is pertinent and reliable [22]. Audit
committee independence is able to deliver trustworthy accounting information, hence it is anticipated
that audit committee independence will enhance the performance of the business. Independent audit

committee and dividend yield were discovered to be positively correlated by L.D. Brown and M.L.
Caylor [16].
The audit committee should hold meetings at least four times annually to ensure the integrity of
financial reporting, according to the 1999 Blue Ribbon Committee Report (Peek et. al., 2007). The
audit committee serves as the overseer of financial accounting procedures. It is anticipated that audit
committee size and meeting frequency will enhance business performance if audit committee size and
frequency can enhance the financial accounting process.
Quality of the audit and firm performance
Performance of the company can be increased by the quality of the audits used to monitor corporate
governance from the outside. The study's findings demonstrated that larger auditors are more likely to
have a solid reputation for high-caliber work than smaller auditors. According to Z.V. Palmrose's
argument (Poullaos and Sian, 2010), the big-8 auditors charge high fees due to the high audit quality.
According to A. Martinez and A. de Jesus Moraes, greater audit fees from auditors send a message to
markets that high audit quality may increase shareholder value (Routledge. Power, 2004).
Principles of corporate governance and business performance
Transparency, responsibility, accountability, independence, and fairness are the guiding principles of
corporate governance. A corporate governance indicator called the Corporate Governance Perception
Index is produced by the IICG (The Indonesian Institute for Corporate Governance) (CGPI). The
performance of the organisation is anticipated to increase with the implementation of effective
corporate governance (Parker, 2005).
STRENGTH OF CURRENT COST ACCOUNTING
 It is possible to take steps to reduce or remove activities that provide little to no profit, as well
as change the manufacturing process to make such tasks more valuable.. Profitable and
unprofitable operations are disclosed.
 It lets an organisation to assess efficiency, maintain it, and then enhance it. This is
accomplished with the aid of useful information that has been made available for comparison.
For instance, if material costs for a pair of shoes in 2009 are Rs 160, and they are Rs 180 in
2010, the difference may be the result of higher material prices, increased material waste, or
inefficiency at the time.
 It gives data that is used to base estimates and bids. Quotes cannot be provided for large
contracts or works unless the cost of executing the contracts is known.
 Future production policies are guided by it. It gives information on which production can be
properly planned by outlining the costs expended and profits generated in various company
lines and operations.
 It helps to increase revenues by identifying the sources of loss or waste and providing
appropriate controls so that residues, leaking, and inadequacies of all departments may be
found and avoided.
 It makes it possible to periodically calculate earnings or losses without using stocktaking.

 It provides accurate information for comparing costs across time periods, for varying output
volumes, between departments and processes, and across establishments. This aids in keeping
expenses as low as possible while ensuring the most effective working conditions.
 It is possible to identify the precise reason why profit or loss goes up or down. A company
may suffer not from excessive manufacturing costs or low pricing, but also from output that is
much below its capacity. Only cost accounts can expose this reality.
 Supportive of the government. It makes it easier to determine excise duty and income tax rates
and to create policies for business, trade, taxation, and other areas. Additionally, it makes it
easier to create national plans for economic growth.
 Beneficial to customers The ultimate goal of costing is to minimise production costs while
maximising company profits. Consumers typically benefit from cost-cutting measures by
paying less for goods and services. A costing system will also provide the general public
confidence in the reasonableness of the prices charged.
WEAKNESS OF CURRENT COST ACCOUNTING
Cost accounting, like other fields of accounting, is not a precise science but rather an art that has
developed via theories and practical financial reporting work based on logical reasoning and common
sense. The rules and underlying concepts of cost accounting can be used to support or challenge a
variety of theories. These concepts are flexible and adjust as events and circumstances do (Peek et.
al., 2007; Poullaos and Sian, 2010; Routledge. Power, 2004). Several restrictions include
 The process for cost accounting is not standard. It is feasible for two cost accountants of
comparable competence to get different conclusions using the same data. All results from cost
accounting might be viewed as simply guesses due to this restriction.
 It is challenging to have exaggerated costs because of numerous conventions, forecasts, and
adaptable factors, including the breakdown of costs into their component parts, the issuance of
materials at an average or standard price, the apportionment of overhead costs, the random
distribution of joint costs, the separation of operating costs into fixed costs and variable costs,
the breakdown of costs into usual and unusual, manageable and non-manageable, and the
incorporation of marginal costs.
 Small and medium-sized businesses must adhere to numerous formalities in order to receive
the benefits of cost accounting, which makes the formation and ongoing costs prohibitive for
these businesses. Cost accounting is thus limited to large businesses.
 Cost accounting hasn't made much of a difference in tackling futuristic problems. For
instance, no tool for managing inflationary situations has yet to be developed.
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