Corporate and Financial Accounting: Financial Reporting Regulation and Analysis of ASX Listed Retail Companies

Corporate and Financial Accounting
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Executive Summary
The report has been undertaken to gain an insight into the various aspects of the financial
reporting process. As such, it has specifically discussed the differing views and opinion of the
accountants in relation to regulation or non-regulation of the financial reporting process. It has
also been inferred that AASB is having a significant role in the development of a global set of
accounting standards as it has fully implemented IFRS in its financial reporting process. The
report has also carried out examination of the financial statements of four ASX listed retail
companies of Australia, that are Harvey Norman, JB Hi-Fi, Woolworths and Wesfarmers.
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Contents
Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................4
Corporate Regulation.......................................................................................................................4
Part i: Critical Discussion to analyze whether financial reporting should be regulated or
manager to be allowed to disclose financial reporting voluntarily..............................................4
Part ii: Critical Explanation of Australian Accounting Standards Board Participation of Global
Accounting Standard-Setting Process & Non-compulsion of IFRS by IASB Member Countries
......................................................................................................................................................5
Owner’s Equity................................................................................................................................7
Part iii: Statement of change in equity.........................................................................................7
Part iv: Comparative Position of debt and equity capital in case of all the four selected
companies...................................................................................................................................17
Conclusion.....................................................................................................................................17
References......................................................................................................................................18
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Introduction
The report is developed for presenting a critical discussion regarding regulation or
voluntarily disclosure of accounting formation by business entities. This is followed by critical
explanation of the participation of AASB in development of global accounting standard-setting
process. It has also provided a discussion of the non-compulsion of IFRS adoption by the IASB
member countries. The next section of the report has analyzed the footnotes of the financial
statement of four public limited companies listed on ASX. The companies selected for the
context are Harvey Norman, Jb Hi-Fi, Woolworth’s and Wesfarmers operating within retail
industry of Australia. The analysis of financial statement is carried to list the equity items and
describe the changes in equity of all these selected firms for past four years. At last, a
comparative analysis of the debt and equity position of the four selected firms has been
presented.
Corporate Regulation
Part i: Critical Discussion to analyze whether financial reporting should be regulated or
manager to be allowed to disclose financial reporting voluntarily
There have been ongoing many debates in relation to financial accounting standard setting.
The debate has put forth the views of many accountants about regulation of financial reporting
process or allowing the companies to voluntarily disclose the accounting information. The
importance of regulating the financial accounting or reporting process has been out forward as a
regulation approach by the accountants. The policymakers believe that regulation of financial
market is required for protecting the interest of the stakeholders. This is because development of
accounting regulation and policies to be followed by business entities during financial reporting
will enable in providing a framework to them to be complied (Camfferman, 2016). This would
ensure that business entities disclose reliable and complete materialistic information about their
financial performance to the end-users. Thus, the regulatory approach can be regarded as specific
means of achieving the interest of public through providing the approaches to them to achieve
the needs of the public as stated in the public interest theory. The presence of accounting
regulations would help in ensuring that business entities continually disseminate the complete
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