Financial Reporting: Social Accountability in AASB Conceptual Framework

This report discusses the social accountability in AASB conceptual framework and the necessity of establishing AASB in the Australian business practice. It also provides information on the annual report of Nick Scali Limited and incentives for disclosing certain types of information. The report concludes with effective communication and presentation of financial information.

Running head: FINANCIAL REPORTING
Financial Reporting
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Executive Summary
The significant discussions of the study relate to the consideration of the social accountability in
the conceptual framework as an integral aspect under the GPFR. The analysis made by the
Australian financial regulatory authority further shows that there has been a significant necessity
of the AASB in establishment of the business practices. Moreover, the report has been also seen
to be able to provide the relevant information which is published in the annual report of Nick
Scali. Some of the important findings of the study has been able to state that Social
Accountability in the AASB conceptual Framework is involved in the several domains of
community services and social activities which are depicted to be carried on behalf of the
government. The appropriate findings on the Necessity of establishing AASB in the Australian
business practice have enhanced confidence of the financial reporting along with the capital
markets. The imperatives under the AASB needs be identified as per the independent objectives
and functions of exercising the power which are stated as per the Part 12 of the “Australian
securities and investments commission act”.

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Table of Contents
Introduction......................................................................................................................................3
Social Accountability in the AASB conceptual Framework...........................................................3
Necessity of establishing AASB in the Australian business practice..............................................4
Types of information provided in the annual report of Nick Scali Limited....................................4
Incentives to the manager for disclosing certain types of the information in Nick Scali Limited. .5
Reaction of the investors for disclosure of certain types of the information in the annual report...6
Presentation of the information and effective communication........................................................6
Conclusion.......................................................................................................................................7
References........................................................................................................................................8
List of Appendix............................................................................................................................10

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Introduction
Nick Scali Limited (listed under ASX) along with its subsidiaries is responsible for
different types of sourcing and retailing for the household furniture across Australia and New
Zealand. Some of the main services offered by the company relates to offering of dining tables,
chairs, buffets, TV units, lamps and pendants (Bloomberg.com 2018). The main excerpts of the
study have included the discussions pertaining to Social accountability in AASB covering the
significant aspects of GPFR.
Social Accountability in the AASB conceptual Framework
As per the AASB 1053 (June 2010), the general level of the public funds is depicted to be
involved in the several domains of community services and social activities which are depicted
to be carried on behalf of the government. Despite of such a measure, it needs to be discerned
that the individual source of funds for an individual corporation is much lower degree as per the
public accountability than the required financial information which is needed by an individual.
The moderate level of the public accountability is included in the sources of funds as per the
foundations or sponsors (Aasb.gov.au 2018). The present gap in the AASB needs to be also
addressed with developing the principles based on Aus-specific standards. This is needed to fill
the gap pertaining to the social benefits included in the project. The social benefits are aimed at
individuals who are not able to meet a certain eligibility criteria or want to mitigate the various
types of the social risks associated to the universally accessible services. The social risk is also
depicted to beneficia as per the welfare of the individuals or the households in event of any
adversary (Aasb.gov.au 2018).

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Necessity of establishing AASB in the Australian business practice
The discourse in the statement of AASB defines that the Government expectation about
the different types of the responsibilities and roles of the AASB is seen in relation to the
Government and resolution in the issues concerning transparency, operational efficiency and
general accountability. The role of the Government in this aspect has been depicted to be defined
with the several types of the important considerations which are based on the developing and
maintaining high quality of financial information which is applicable to all sectors as per the
economy of Australia and contribution towards global standards. The important contribution has
been also seen to be conducive in terms of the enhancing the confidence of the financial
reporting along with the capital markets. The imperatives under the AASB needs be identified as
per the independent objectives and functions of exercising the power which are stated as per the
Part 12 of the “Australian securities and investments commission act”. In addition to this, as
per the expectations of the Government, AASB is discerned to reduce the several types of
compliance cost required for a business and communities in contributing to the public
investments. They are also seen to be playing a beneficial role in reducing the target of red and
green tape (Aasb.gov.au 2018).
Types of information provided in the annual report of Nick Scali Limited
The significant contents of the annual report are recognized with review of the company
by the chairman and managing director’s review, directors’ report, auditor’s independence
declaration, statement of comprehensive income, information on the financial position along
with the changes in the equity. In addition to this, the annual report of Nick Scali Limited has
also included statement for cash flow position of the company. Some of the various types of the
other crucial information included by the company in the annual report has been depicted as per

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the various information which are related to the declaration made by the directors. The latter part
of the annual report has also included the necessary information about the shareholder’s
information and corporate information. The significant nature of information as per the notes to
the financial statement has been also seen to include the necessary excerpts of the information
which depicted as per the notes on the basis of preparation of the financial report. In addition to
this, the annual report of the company has been also seen disclose the important perspectives of
the information which shows the segmental information, revenue, expenses, IT expenses,
earnings per shares, equity and dividends. It has also included the necessary information for
showing the operating assets and liabilities (Nickscali.com.au. 2018).
Incentives to the manager for disclosing certain types of the information in Nick Scali
Limited
The incentives to the managers in disclosure of certain types of the information needs to
be identified as per the various types of benefits which are understood as per the stakeholders
and societies at large. These types of information have been seen with community services and
social activities. In addition to this, the managers are also seen to release relevant information in
terms of corporate social responsibilities and social activities. The important benefits associated
to such disclosures are seen with leveraging the goodwill. Most of the employees and community
members are seen to contribute to the strategical improvement for the future benefits of the
company. it needs to be also depicted that the social activities reported by the companies are
important in addressing the future needs in the developed economy which will be respectful to
the people and environment at large. The implementation of the disclosures pertaining to the
AASB shows that an entity has maintained the standards as per fairness and integrity. Moreover,

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the necessary information pertaining to the CSR has been able to define the scope of value
creation through both responsible and source of value (Fast Company 2014).
Reaction of the investors for disclosure of certain types of the information in the annual
report
In general. Conceptual disclosure is considered as an integral part of the financial
reporting which is all the investors are concerned. The consideration of the new information in
the financial statement forms a new confidence among the investors which has been able to
define the significant nature of the confidence among the investors. In addition to this, there are
several companies which has defined the information which are related to the investors interest
with the decision of investment (Gan, Sellar and Lingard 2016). The investors look for important
information on the previous EPS to know about the scope of the growth for the future stock. In
addition to this, some investors closely monitor the changes pertaining to the closing price of the
shares. In case there has been increased volatility of the closing share price in compare to the
market index, then they usually don’t consider the portfolio for investment. The general
information as per the performance of the assets and liabilities are conducive in defining the
financial health of the company whether there is any scope of future investment (Abdel‐Samad
and Flanigan 2018).
The various types of the disclosure of the information which are associated to the social
activities are also closely taken onto account by the investors. Based on the nature of the
investors the main key point of consideration for the decision to invest in the shares of the
company are often related to the performance of the company in terms of the social initiatives
(Econjournals.com. 2018).

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Presentation of the information and effective communication
The presentation of the relevant information is seen as per AASB 101. This is relevant
with the presentation and communication of the financial information as prescribed by IASB.
The paragraphs specific to the prefix of the Aus and RDR are applicable for both profit making
and non-profit making entities. In this case, the presentation of information for Nick Scali
Limited is depicted with AASB 1053. These depicted with the adherence of the company with
the disclosure of the information in terms of stating the purpose of finial reporting. Such
information is disclosed with the consideration of assets, liabilities, cash flows and income
statement. In addition to this, the adherence of the company pertaining to the significant nature
of the information are seen to be considered as per the relevant nature of the information as per
publishing of statement of financial position at the end of each financial period (Epstein 2018).
Conclusion
The important disclosure on the preventability of the financial information followed by
the company needs to be identified in terms of following of Tier 2 of the AASB 101 disclosure.
In addition to this, the significant learnings from Social Accountability in the AASB conceptual
Framework shows that the general level of the public funds is depicted to be involved in the
several domains of community services and social activities which are depicted to be carried on
behalf of the government. In addition to this, present gap in the AASB needs to be also addressed
with developing the principles based on Aus-specific standards. This is needed to fill the gap
pertaining to the social benefits included in the project. The significant aspect of the importance
of establishing the AASB as per the Australian business context needs to be taken into account
with the present gap in the AASB needs to be also addressed with developing the principles

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based on Aus-specific standards. This is needed to fill the gap pertaining to the social benefits
included in the project.

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References
Aasb.gov.au. 2018. AASB Action Alert [online] Available at:
https://www.aasb.gov.au/admin/file/content102/c3/189-ActionAlert.pdf [Accessed 18 Sep.
2018].
Aasb.gov.au. 2018. Conceptual Framework for Financial Reporting [online] Available at:
https://www.aasb.gov.au/admin/file/content105/c9/ACCED264_06-15.pdf [Accessed 18 Sep.
2018].
Aasb.gov.au. 2018. IPSASB ED 63 Social Benefits [online] Available at:
https://www.aasb.gov.au/admin/file/content102/c3/9.2_Presentation_Social_Benefits_M162.pdf
[Accessed 18 Sep. 2018].
Aasb.gov.au. 2018. Presentation of Financial Statements [online] Available at:
https://www.aasb.gov.au/admin/file/content105/c9/AASB101_07-15.pdf [Accessed 18 Sep.
2018].
Aasb.gov.au. 2018. STATEMENT OF EXPECTATIONS — THE AUSTRALIAN
ACCOUNTING STANDARDS BOARD [online] Available at:
https://www.aasb.gov.au/admin/file/content102/c3/AASB_Statement_of_Expectations.pdf
[Accessed 18 Sep. 2018].
Abdel‐Samad, M. and Flanigan, S.T., 2018. Social Accountability in Diaspora Organizations
Aiding Syrian Migrants. International Migration.
Bloomberg.com. 2018. Terms of Service Violation. [online] Available at:
https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=10930197
[Accessed 18 Sep. 2018].

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Econjournals.com. 2018. Mandatory and Voluntary Disclosure of Annual Report on Investor
Reaction [online] Available at:
http://www.econjournals.com/index.php/ijefi/article/viewFile/1395/pdf [Accessed 18 Sep. 2018].
Epstein, M.J., 2018. Making sustainability work: Best practices in managing and measuring
corporate social, environmental and economic impacts. Routledge.
Fast Company. 2014. Corporate Social Responsibility: Leveraging Good Will. [online] Available
at: https://www.fastcompany.com/1172036/corporate-social-responsibility-leveraging-good-will
[Accessed 18 Sep. 2018].
GAN, A.H., Sellar, S. and LINGARD, B.O., 2016. Corporate social responsibility and neo-social
accountability in education: The case of pearson plc. In World Yearbook of Education 2016 (pp.
127-144). Routledge.
Nickscali.com.au. 2018. Annual Report 2017 [online] Available at:
https://www.nickscali.com.au/media/wysiwyg/pdfs/NCK_-_Annual_Report_2017.pdf [Accessed
18 Sep. 2018].

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List of Appendix

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