Financial Reporting: A Study on Social Accountability and Compliance with AASB

This study analyzes social accountability concepts under AASB and compliance with GPFR. It also examines the financial statements of Nick Scali Limited. Findings show the importance of disclosing social initiatives and the impact on investors. The study provides insights into the presentation of financial information and effective communication. Subject: Accounting, Course Code: N/A, Course Name: N/A, College/University: N/A

Running head: FINANCIAL REPORTING
Financial Reporting
Name of the Student:
Name of the University:
Author’s Note:
Course ID:

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Executive Summary
The discussions of the study have depicted the consideration for conceptual framework and
social accountability as specified by the GPFR. The analysis of the report as per the financial
regulatory authority of Australia have defined about the importance of AASB in defining the
practices pertaining to business. In addition to this, the report has also identified crucial
information of financial statements which have been published by Nick Scali. The findings
pertaining to the study have stated about social accountability concepts under AASB. The
important findings of Social Accountability under the conceptual Framework of AASB shows
the social benefits are focused on the individuals who have defaulted on specific eligibility
criteria or wish to alleviate any form of social risk which are pertaining to commonly accessible
service. In addition to this, the risk pertaining to social accountability such as event of adversary
has been also included under the conceptual framework of AASB. The main imperative for
AASB needs to be considered with the purposes and objectives for exercising various power
which was stated under Part 12 of the “Australian securities and investments commission act”.
The financial statement of Nick Scali Limited is also discerned to include the statement for
showing position of cash flow in the last two years. The significant information in the annual
report is to be also discerned with the declarations pertaining to the directors. The last part of the
financial statement has also included the evidence for including shareholders statement and
corporate information.

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Table of Contents
Introduction......................................................................................................................................3
Social Accountability in the AASB conceptual Framework...........................................................3
Importance of complying with AASB in the Australian business practice.....................................4
Nature of information facilitated 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........................................................................................................................................9
List of Appendix............................................................................................................................11

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Introduction
The company chosen for this assignment is Nick Scali Limited which is listed under
ASX. Nick Scali Limited and its subsidiaries are involved in different types of operations
relating to retailing and sourcing of household furniture is across New Zealand and Australia.
The main products include a wide range of furniture such as TV units, dining tables, chairs,
pendants and buffet. The discourse of the study has primarily focused on the social
accountability concepts listed under AASB and also covering the major compliance which are
stated as per GPFR. The latter part has also included presentation of information by AASB
(Au.finance.yahoo.com. 2018).
Social Accountability in the AASB conceptual Framework
The excerpt from “AASB 1053 (June 2010)” depicts that the normal portion of public
funds in terms of different areas of public amenities and social activities are often maintained in
support of the government (Aasb.gov.au. 2018). Despite of this, the funds pertaining to
individual source for any corporation is at a much lower degree in terms of financial information
needed by the individual. A considerable amount of public accountability needs to be
incorporated within the sources of funds which are as per the sponsors or foundations of
accounting. The existing gap for the AASB in terms of principles relating to Aus-specific
standards should be also addressed. This criterion needs to overcome the gaps which are
associated with social benefits of a project. Moreover, the social benefits are also focused on the
individuals who have defaulted on specific eligibility criteria or wish to alleviate any form of
social risk which are pertaining to commonly accessible service. In addition to this, the risk

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pertaining to social accountability such as event of adversary has been also included under the
conceptual framework of AASB (Cohen 2017).
Importance of complying with AASB in the Australian business practice
The discussions pertaining to AASB mentions about the expectations of the government
on the responsibilities for different types of issues relating to general accountability,
transparency and operational efficiency. Moreover, the government rule is often defined with
significant nature of consideration in relation with developing and maintaining high quality
financial reports in the applicable sectors. This function is carried out as per maintaining
universality in global standards and also ensuring clear depiction of Australian market while
preparation of the financial reports. The significant contribution of AASB is also discerned with
enhancement of financial statements while evaluating the capital markets. The main imperative
for AASB needs to be considered with the purposes and objectives for exercising various power
which was stated under Part 12 of the “Australian securities and investments commission act”.
Moreover, the government expectation for AASB is depicted to be reducing the cost of
compliance relating to business and communities and also contributing to public investments.
There are also major benefiting roles in decreasing the target for green tape and red tape issues
(Dey 2018).
Nature of evidence facilitated in the annual report of Nick Scali Limited
The different types of content as per the financial statement depicted to be monitored by
auditor’s independence declaration, chairman and managing director’s review, statement of

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financial position and statement of income. Moreover, the financial statement of Nick Scali
Limited is also discerned to include the statement for showing position of cash flow in the last
two years. The significant information in the annual report is to be also discerned with the
declarations pertaining to the directors (Aasb.gov.au. 2018). The last part of the financial
statement has also included the evidence for including shareholders statement and corporate
information. Some of the other important aspects of excerpts of details under the financial
statement is also identified with the framework followed for preparation of the overall financial
report. It needs to be understood that the annual report of the company has made several
disclosures on the perspectives of information which is identified with equity, dividends, revenue
and IT expenses. The company is also depicted to include significant information for the
disclosure of the operating assets and liabilities (Belal 2016).
Motivations to the manager for revealing certain types of the information in Nick Scali
Limited
The major incentives to the managers need to be identified in terms of facilitating the
information which are understood with the stakeholder engagement and society. This concept of
information disclosure is seen to be relevant with the initiatives taken by the company for social
activities and the same is referred as the social accounting (Aasb.gov.au. 2018). The significant
nature of benefits for disclosing of such an information is depicted with leveraging of the
goodwill for the company. In most cases, the community members and employees are
responsible for bringing about strategical improvements which are associated to the future
benefits brought by a company. Some of the other aspects of the social activities are associated
with reporting of the various necessities which are required in the future. The important nature of
disclosures related to AASB clearly identifies that the entity has adhered to the standards as per

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integrity and fairness. In addition to this, the information pertaining to CSR activities have also
pointed out the scope of value creation with both the inclusion of source of value and
responsibility (Thomson 2015).
Response of the investors for disclosure of certain types of the evidence in the annual
report
The conceptual disclosure concept is regarded as an important portion of financial
reporting which are concerned with the investors. This is associated with the inclusion of new
information in the financial statement and forms the basis of confidence among the investors.
Moreover, there has been large number of companies which have stated on the information
associated with the investors which are in the fair interest of decision-making ability. These
decisions are mainly based on making investment. The investors also look forward to a
presentation of financial data such as EPS to know about the growth opportunities of future stock
(Michelon and Vourvachis 2015). It needs to be also understood that some of the investors are
also seen to closely monitor the deviations associated with closing price in the shares. If there is
an increased volatility among the closing price of the shares then the market index of the
portfolio is not considered for investment purposes. The over-all information based on the
performance of liabilities and assets are also beneficial in stating about the financial health of a
company and whether it is adding any scope of future investment (Aasb.gov.au. 2018).
Moreover, there are significant excerpts of other information which relates to the social
activities and these are also accounted by the investors. Depending on the nature of investors, the

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definitive points decide whether to invest in the shares of the company are often associated with
the social initiatives taken by a company (Michelon and Vourvachis 2015).
Presentation of the information and effective communication
AASB 101 provides the guidelines for presentation of information. It is depicted to be
associated with communication and presentation aspect of financial information as defined by
IASB standard. Moreover, the paragraphs which are appropriate to the prefix of the Aus and
RDR are pertinent among both nonprofitmaking and profit-making entities. The consideration of
exhibition of information for Nick Scali Limited is recognized with the standards prescribed by
AASB 1053. This is seen with conformity of the company to disclose information that is related
to stating the purpose of reporting. Therefore, this type of information is often inclusive of
overheads for assets, liabilities, cash flows and income statement. Furthermore, the compliance
of the company to other form of information are also evident with the publishing of financial
position which are to be considered for nature of the information (Aasb.gov.au. 2018).
Conclusion
The discourse of the study has stated that some of the significant nature of the financial
information pertaining to the companies followed with guidelines given under Tier 2 of the
AASB 101 disclosure. Furthermore, there are other learnings of the study which are related to
Social Accountability in the AASB conceptual Framework which are relevant with the disclosure
pertaining to general level of public funds and several other domains of social activities and
community services which are carried out in behalf of the government. Moreover, it has been
understood that the major incentives to the managers need to be identified in terms of facilitating
the information which are understood with the stakeholder engagement and society has

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significant nature of benefits with leveraging of the goodwill. It is further discerned that in most
cases, the community members and employees are responsible for bringing about strategical
improvements which are associated to the future benefits brought by a company. Some of the
other aspects of the social activities are associated with reporting of the various necessities which
are required in the future. Nick Scali Limited is recognized with the standards prescribed by
AASB 1053. The inclusion of new information in the financial statement and forms the basis of
confidence among the investors. Moreover, there has been large number of companies which
have stated on the information associated with the investors which are in the fair interest of
decision-making ability.

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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].
Au.finance.yahoo.com. 2018. Yahoo is now a part of Oath. [online] Available at:
https://au.finance.yahoo.com/quote/NCK.AX/profile?p=NCK.AX [Accessed 21 Sep. 2018].
Belal, A.R., 2016. Corporate social responsibility reporting in developing countries: The case of
Bangladesh. Routledge.
Cohen, S.I., 2017. Social accounting for industrial and transition economies. Routledge.

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Dey, C., 2018. Contemporary Issues in Social Accounting. Social and Environmental
Accountability Journal, 38(2), pp.157-158.
Michelon, G. and Vourvachis, P., 2015. Accounting for social value [book review].
Retolaza, J.L., San-Jose, L. and Ruíz-Roqueñi, M., 2016. Social accounting for sustainability:
Monetizing the social value. Cham: Springer.

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Thomson, I., 2015. ‘But does sustainability need capitalism or an integrated report’a commentary
on ‘The International Integrated Reporting Council: A story of failure’by Flower, J. Critical
Perspectives on Accounting, 27, pp.18-22.
List of Appendix

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