Financial Reporting: Objectives, Standards, and Incentives for Disclosure
Added on 2023-06-05
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Financial Reporting 1
FINANCIAL REPORTING
by (Student’s Name)
Professor’s Name
Institution
Location of Institution
Course
Date
FINANCIAL REPORTING
by (Student’s Name)
Professor’s Name
Institution
Location of Institution
Course
Date
Financial Reporting 2
Executive Summary
Social accounting is not considered as one of the objectives in the general purpose
financial reports (GPFR).The most significant aspect is financial accounting of various
organizations in Australia. Further the disclosure regime in Australia is different based on the
requirements during the financial reporting and hence there is a need for setting of standards
based on the Australian business practices. The report focus on various issues relating to the
Australian Accounting Standards Board. It aims at answering certain questions based on the
AASB as discussed below in the paper. The company selected for the assignment is Acacia Coal
Limited.
Provide your comments regarding the aforementioned statement. Explain. (6 marks)
Social accountability is considered one of the key objectives of general purpose financial
reports in the AASB Conceptual Framework. The above statement is false because based on the
accounting standards of Australia, the most significant item to account for as a company is the
financial position of that particular organization. It is the responsibility of every organization to
be socially responsible and hence undertake activities which are beneficial to the surrounding
society (Laswad and Redmayne, 2015 p.180). Being socially responsible is the objective of the
specific organization and this is due to the benefits associated with it. For example, it will create
a good public image for the company. It may also result in huge profitability for the organization,
and this is especially when it produces goods and services which are of high quality to the
community.
Corporate social responsibility forms one of the key objectives of an organization
towards the community such that all the activities should be aimed at meeting the various interest
of different stakeholders in the society. The organizations must conduct their activities in an
Executive Summary
Social accounting is not considered as one of the objectives in the general purpose
financial reports (GPFR).The most significant aspect is financial accounting of various
organizations in Australia. Further the disclosure regime in Australia is different based on the
requirements during the financial reporting and hence there is a need for setting of standards
based on the Australian business practices. The report focus on various issues relating to the
Australian Accounting Standards Board. It aims at answering certain questions based on the
AASB as discussed below in the paper. The company selected for the assignment is Acacia Coal
Limited.
Provide your comments regarding the aforementioned statement. Explain. (6 marks)
Social accountability is considered one of the key objectives of general purpose financial
reports in the AASB Conceptual Framework. The above statement is false because based on the
accounting standards of Australia, the most significant item to account for as a company is the
financial position of that particular organization. It is the responsibility of every organization to
be socially responsible and hence undertake activities which are beneficial to the surrounding
society (Laswad and Redmayne, 2015 p.180). Being socially responsible is the objective of the
specific organization and this is due to the benefits associated with it. For example, it will create
a good public image for the company. It may also result in huge profitability for the organization,
and this is especially when it produces goods and services which are of high quality to the
community.
Corporate social responsibility forms one of the key objectives of an organization
towards the community such that all the activities should be aimed at meeting the various interest
of different stakeholders in the society. The organizations must conduct their activities in an
Financial Reporting 3
ethical manner, and this, therefore, forms an integral role of a company. The AASB is only
concerned about the reporting technique which has been applied by an organization during the
financial accounting and reporting (Cordery and Sinclair, 2016 p.500). It, therefore, does not
consider whether the business has ethically conducted its activities or not. The social accounting,
therefore, is not part of the objectives of the general purpose financial reports. It typically forms
one of the goals of the specific organization with the aim of enhancing its image to the public
and all the other stakeholders in the real world business such as the investors, government,
creditors, customers, and suppliers. The fundamental goal of the general purpose financial report
is to ensure that the financial information reported is done systematically to enable the various
users to make viable decisions.
Based on the analysis of Australian financial regulatory framework, explain why it
is necessary to establish and develop AASBs in Australian business practices. (4 marks)
Based on the financial regulatory framework of Australia, it is vital to develop and
establish the AASBs in the Australian business practices. The disclosure regime in Australia is
different based on the requirements during the financial reporting, and this is because they are set
according to the type of business (Henderson, Peirson, Herbohn and Howieson, 2015 p.70). Such
financial reporting requirements are also principally based on the public interest level in a
particular entity. The key entities typically include small proprietary companies, disclosing
entities and the unlisted public companies.
Heenetigala, De Silva, Armstrong and Ediriweera, 2016 p.340), argues that the process
of setting the standards is a multi-process which requires the involvement of various business
groups, such as the accountants, investors, and other key stakeholders. This therefore means that
Acacia Coal Limited Company has to involve all the stakeholders during the annual reporting of
ethical manner, and this, therefore, forms an integral role of a company. The AASB is only
concerned about the reporting technique which has been applied by an organization during the
financial accounting and reporting (Cordery and Sinclair, 2016 p.500). It, therefore, does not
consider whether the business has ethically conducted its activities or not. The social accounting,
therefore, is not part of the objectives of the general purpose financial reports. It typically forms
one of the goals of the specific organization with the aim of enhancing its image to the public
and all the other stakeholders in the real world business such as the investors, government,
creditors, customers, and suppliers. The fundamental goal of the general purpose financial report
is to ensure that the financial information reported is done systematically to enable the various
users to make viable decisions.
Based on the analysis of Australian financial regulatory framework, explain why it
is necessary to establish and develop AASBs in Australian business practices. (4 marks)
Based on the financial regulatory framework of Australia, it is vital to develop and
establish the AASBs in the Australian business practices. The disclosure regime in Australia is
different based on the requirements during the financial reporting, and this is because they are set
according to the type of business (Henderson, Peirson, Herbohn and Howieson, 2015 p.70). Such
financial reporting requirements are also principally based on the public interest level in a
particular entity. The key entities typically include small proprietary companies, disclosing
entities and the unlisted public companies.
Heenetigala, De Silva, Armstrong and Ediriweera, 2016 p.340), argues that the process
of setting the standards is a multi-process which requires the involvement of various business
groups, such as the accountants, investors, and other key stakeholders. This therefore means that
Acacia Coal Limited Company has to involve all the stakeholders during the annual reporting of
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