HI6025 Accounting Theory, Current Issues
Added on 2020-02-24
19 Pages4186 Words106 Views
Accounting Theory 1Accounting Theory
Accounting Theory 2Executive summary:The preparation of this report is an attempt to develop the understanding about the financialaspects of the company. The Woolworth Company of Australia has been chosen for this purpose.This company is dedicated in the business of supermarket in Australia. This company hasacquires around 80% of the market share. It has specialization in selling of groceries items. It hasopened around 1000 stores along with 19 convenience stores in the market of Australia. It is thesecond largest retailer company in terms of revenue. It is also the largest company in thebusiness of liquor industry in the country. This company holds the 19th position in the world inthe retail industry. This report is designated towards the development of understanding about thevarious aspects of the accounting. In this report, various types of theories of accounting arediscussed. Various aspects relating to accounting has been discussed in this report. In this report, the annualreport of the Woolworths Company for two years has been downloaded. Then, various types ofaspects are evaluated using these reports has been discussed. Various types of policies andestimates which are used in the preparation of financial statements are discussed. And theflexibility of these policies are also analyzed. It has also been evaluated that these accountingpolicies and estimates are used by other companies or not. Further, the accounting report ofWoolworths and Wesfarmers are compared and several conclusions have been drawn on thebasis of this comparison. Then, a topic that covers the topic about disclosure of various strategiesis discussed. Then, any types of red flags or questionable number are searched in the annualreport. Then, these red flags are falls in which category of accounting policies and the reasonsbehind allocating the categories are evaluated.
Accounting Theory 3Table of ContentsExecutive summary:........................................................................................................................2Introduction:....................................................................................................................................4C.1 Accounting policies and estimates by Woolworths:..........................................................5C. 2 Flexibilities of accounting Policies:.........................................................................................7C. 3 Accounting policies and estimates by Competitor’s:...........................................................7C. 4 Comparison of accounting policies and estimates:..............................................................8C. 5 Thepoliciesandestimates Vs challenges from external factors.......................................11C. 6 accounting strategy hiding/revealing:....................................................................................11C. 7 AnyRedFlags/questionablenumberintheaccountingreport..............................................12C. 8 Whichaccountingpositionscapturethem?Why?Explain:..................................................13Criticallyevaluateaccountingqualitybyassessingaccountingpoliciesand estimates......................15Conclusion:....................................................................................................................................16Referencing:...................................................................................................................................17Figure 1: Consolidated income statement Source: Woolworths Group (2017)...............................9Figure 2: Consolidated income statement Source: Wesfarmers (2017)........................................10
Accounting Theory 4Introduction:The report outlines the accounting theory used by the Woolworths to investigate their variousaccounting policies used by the managers of the company. The report focuses on the flexibilitiesused by the managers of Woolworths and analyzes the competitor’s policies, which help thecompany to compete with them. The report explains comparison between the annual report ofWoolworths and Wesfarmers and mentions the policies used by both the firms. In the next partreport analysis the accounting statements are hiding or revealing and compare the transparencyin the financial statements of both the firms. At last report explains the red flags and the reasonfor its occurrence and mentions the positions of accounting which captures the red flags.
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