impact of accounting Assignment

Name : ________________________________________________
Student ID : ____________________________________________
Proposed Research Title:
To analyze the impact of accounting: in context of Woolworths Supermarket, Australia
Client Organisation (if applicable)
Woolworths Supermarket, Australia
Literature Review
A review of necessary literature sources is critical to arrive at an understandingn related
to a particular topic. In the curent research proposal, it is being evaluated ways that
accomodating of accounting concepts regulations of Australia can impact their
organizational performance. The Asutralian Accounting Standards Board (AASB), an
Australian Government agency that is repsonsible for maintaining of financial reporting
of public as well as private organizations has developed certain standards (Agoglia,
Doupnik & Tsakumis, 2011). The scope of this literature review encompasses concepts
from AASB that has helped Woolsworth achieve high levels of organizational
performance. Articles, books and journals have provided relevant insights into ways
that application of accounting standards can help trigger organizational performance.
Schaltegger and Burritt (2017) proposes that environmental accounting standards forms
an integral part of reporting for organizations to create sustainability. Woolsworth and
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any other companies public or private that are operating in the Australian market or
have their securities listed in the ASX needs to apply AASB principles of accounting
regulations. The AASB provides appropriate treatment for all items across trading,
profita and loss account, cash flow statements as well as the balance sheet. Following
such treatment has been deemed as essential as well as mandatory by the Accounting
Boards. It allows transparency and reliability of accounting strcutral framework.
Moreover, reports that are prepared in connection to such given standards are easily
readible by investors from across the globe (Brown, 2011). Meaning using of
Accounting Standards enhances prospects of an organization to raise capital from
various other countries as well. AASB is developed in conjuction and consultation of
recently published norms of the IFRS. Meaning that investors from across the world can
easily access balance sheet and other information of the Company.
Bryce, Ali and Mather (2015) in their report highlighted that an accounting statement
of an organization not only encompasses reflection of the financial health of an
organization rather it provides external satekholders with vision and mission of the
organization. An effective accounting statement is able to provide details of an
organization’s activities and future directions. Preparation of such effective accounting
statement is only possible in case the organization has an operational accounting
regulations applied. Therefore, such maintaining of accounting statements is possible
only in case an organization has the motive to do so (Peloza, 2009). Prevalence of such
accounting regulations within an organization allows providing company related
information to various stakeholder groups. Investors and shareholders have use of such
information as they want to understand where their valuable money is invested in. With
using such information, investors can either decide or invests more money or withdraw
their investments already done. But in absence of such information, investors will be
confussed and might take a decision that might affect long-term prospects of the
Company (Tarca, 2012). Therefore, accounting regulations within an organziation
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enable its investors and shareholders to remain commited to their investments.
Employees and staffs can have access to such information to understand whether their
company is o n right track. This allows enhancing commitment levels of employees
and staffs as they can clearly see company’s direction throughits vision and mission
statement.
Benson, Clarkson, Smith and Tutticci (2015) evaluated accounting standards and
regulations being an integral factor of Corporate Governance in Australia. Companies
in Australia need to comply with Corporate Governance norms and standards. It is a
requirement of Corporate Governance that organizations within Australia apply
standards of accounting and regulations as has been proposed by AASB. Therefore, it
becomes necessary for organizations to apply norms related to accounting. In every
organizations, especially retail ones recording of transactions is necessary and their
subsequent treatment in books of accounts. In-depth and details recording of such
transactions is deemed to be critical such that they can be reflected across books of
accounts and balance sheet. Therefore, companies as a part of their compliance
procedures need to apply accounting regulations and processes so as to prepapre books
of accounts in an appropriate manner.
Preiato, Brown and Tarca (2015) provides necessities in legal framework requiring
application of accounting principles and regulations. In order to create sustainability
amongst organizational processes, there needs to be application of appropriate
accounting frameworks with regulations. It allows depicting treatment of various
accounts and their profitability as well (Unerman, Bebbington & O’Dwyer, 2010).
Accounting functions is one of the basic needs and requirement for any organization
hence has to be applied across all its departments. An organization need to have
accounting software and packages that can allow recording and proper treatment of
various heads of accounting. Complying with old standards of accounting and not
upgrading to recent standards might deter possibilities of the organization to report its
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profits and losses effectively. Moreover, there might be challenges faced in treating of
leases, as earlier books of accounts treated them as expenses. Compared to current
standards of accounting that reports treating of operational leases in the balance sheet.
There are various other alterations that have been considered into accounting
regulations. Therefore, in case Woolsworth is able to accommodate newer standards and
procedures of accounting across all its operations, then it will be able to generate direct
impacts on its profitability. Moreover, due to the widespread of the organization’s
business, it becomes mandatory for it to apply such regulations for organizations
effectiveness.
Key Findings from Literature Sources
 Woolsworth need to apply all relevant accounting regulations a proposed by
AASB
 Accounts Reporting according to AASB is bound to imapct on increasing
transparency within the organziation, generating more commintment from
different stakeholder groups.
 Applying Accountign framework as provided by AASB will allow the
Company to accommodate Corporate Governance Model, which is deemed
mandatory by Australian Securities and Investments Board.
 Accounting regulations as provided by AASB has created various provisions
for companies like Woolsworth to generate profitability. Treatment of operating
leases can now be shown in balance sheet, which allows calculating
profitability appropriately.
Managerial Implications
 Develop an accounting reporting framework for the organization
 Provide access to wide range of organizational infromation to various
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stakeholders
 Enhance Corporate Governance Model within the organization
 Create impact on profitability by treating leases over long term period with
depreciation
Limitations of the Study
 The study only analyses accounting regulations impact on Woolsworth ignoring
other private or publci enterprises. Hence the samnple size of the population is
small.
 The study undertakes a theoritical evaluation of literatures ignoring practical
considerations.
 The study cannot distinguish between other imapcts that affects organziational
performance compared to those of accounting regulations.
Publication details of relevant articles for a literature review
 Schaltegger and Burritt (2017)
 Bryce, Ali and Mather (2015)
 Benson, Clarkson, Smith and Tutticci (2015)
 Preiato, Brown and Tarca (2015)
Future Research Direction
Availability of liertature soruces provides various types of concepts and theories in the
area. through review of various literature sources it has been obtained that applying
accounting regulations and framework does allows betterment of organziational
performance. Thus, future direction of the research as proposed by the four artilces are
as follows;
 Schaltegger and Burritt (2017): The article primarily proposes environmental
accounting challenges that are faced by organization’s today. The scope of this
article provides norms and regulations that needs to be adopted by organizations
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that wants to create sustainability for the future.
 Bryce, Ali and Mather (2015): The scope of this article provides relevant
insights into challenges that existed before IFRS and post adoption of IFRS.
Course of future direction that is shown by this article highlights the several
benefits that an organization can benefit from by application of IFRS principles
and concepts. The article provides insights into ways that organizational
performance can be enahnced by accomodating IFRS in Australia.
 Benson, Clarkson, Smith and Tutticci (2015): The scope of this article
undertakes review of various accounting research and their application in the
domain of organizational performance. The scope of effectiveness of accounting
regulations has several implications on its shareholders and investors. This
article provide such attributes of accounting that allows an organization to raise
capital for their businesses.
 Preiato, Brown and Tarca (2015): The scope of this article evaluates various
legal framework that makes it necesasry to apply accounting standards and
policies. In Australia, it becomes mandatory for the companies enlisting in ASX
by the Securities Board to accommodate AASB. Therefore, this article takes into
considerations all legal framework that are necessary for organizations to
accommodate accounting regulations.
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Refrences
Agoglia, C.P., Doupnik, T.S. and Tsakumis, G.T., 2011. Principles-based versus rules-
based accounting standards: The influence of standard precision and audit committee
strength on financial reporting decisions. The accounting review, 86(3), pp.747-767.
Benson, K., Clarkson, P. M., Smith, T., & Tutticci, I. (2015). A review of accounting
research in the Asia Pacific region. Australian Journal of Management, 40(1), 36-88.
Brown, P., 2011. International Financial Reporting Standards: what are the
benefits?. Accounting and business research, 41(3), pp.269-285.
Bryce, M., Ali, M. J., & Mather, P. R. (2015). Accounting quality in the pre-/post-IFRS
adoption periods and the impact on audit committee effectiveness—Evidence from
Australia. Pacific-Basin Finance Journal, 35, 163-181.
Peloza, J., 2009. The challenge of measuring financial impacts from investments in
corporate social performance. Journal of Management, 35(6), pp.1518-1541.
Preiato, J., Brown, P., & Tarca, A. (2015). A comparison of between‐country measures of
legal setting and enforcement of accounting standards. Journal of Business Finance &
Accounting, 42(1-2), 1-50.
Schaltegger, S., & Burritt, R. (2017). Contemporary environmental accounting: issues,
concepts, and practice. UK: Routledge.
Tarca, A., 2012. The case for global accounting standards: Arguments and evidence.
Unerman, J., Bebbington, J. and O’Dwyer, B., 2010. Introduction to sustainability
accounting and accountability. In Sustainability accounting and accountability (pp. 20-
35). Routledge.
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