Introduction to the Process of Accounting CBA

ACCOUNTING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
QUESTION 1...................................................................................................................................1
Question 2........................................................................................................................................7
CONCLUSION..............................................................................................................................13
REFERENCE.................................................................................................................................14
BIBLIOGRAPHY..........................................................................................................................16

Illustration Index
Illustration 1: Remuneration to senior executives of CBA..............................................................2
Illustration 2: CBA board.................................................................................................................3
Illustration 3: Target remuneration for 2017...................................................................................4

INTRODUCTION
Accounting is a process of measuring, processing and communicating financial
information of any entity generates ideas for investors, creditors and management of risks.
However, management of entire business operations and decision making on it is possible
through recording and reporting financial transactions. The present report is based on introducing
accounting information article related to remuneration for senior executive for Commonwealth
Bank in Australia. It is financial service provider of the country who made planning policy
regarding article mentioned in Australian Securities Exchange (ASX) today. Including this,
different accounting standard board and theories of regulation regarding public and private
interest for the financial institution. Moreover, accounting standard boards and regulations
mentioned for accountancy will be introduced through this assignment. Likewise, theories used
in accounting and recording of financial transactions can be expressed. Thus, students are able to
understand article related to remuneration for senior executive for CBA as well accounting
theories and concepts deeply through this report.
QUESTION 1
Issues covered in exposure draft
The issue occurred in CBA is related to laundering laws related to money laundering and
according to which senior executive will lose all of their short term variable bonuses. However,
for both short term and long term variable bonuses for the financial year. Similarly, in the
financial year 2016, amount is mentioned for paid operations of banking sector (Noeker and
Juckel, 2017). In this regard, directors served full year will pay 300000 while for directors who
are to serve who fell to just for paid 273000. As such remuneration of executives is to present in
its annual report by which monetary position of the bank can recognise. Further, on the basis of
this issue and financial position of the bank, recording for further years. Thus, article mentioned
in the newspaper regarding financial issue and solving the issue is recorded.
REDUCING SENIOR EXECUTIVES' SHORT TERM INCENTIVE FOR CBA
Due to money laundering issue, CBA is facing issue of economic crises therefore,
planning for reducing short term incentive to create balance and improving financial position of
the organisation. However, it will be able for further implementation and strategies in the future
time period. Thus, bank can achieve effective profit by implementing this strategy and
1

operating further activities.
Actual remuneration position of CBA:
For making decision to reduce economic issue of CBA, monetary position of the bank is
required to be identified can be understand as:
In the Australian market, it has been noted that arrangement of remuneration for CEO
and executive group made up with fixed and risk as well. It is determines in the two types of
variable remuneration such as short and long term context (Karakolias and et.al., 2017).
Components are based on the performances against key financial and non financial measures. In
this aspect, full details also required to make broader outcomes with full consideration that
disclosed in the annual report. In order to reach towards conclusion, overriding consideration in
2
Illustration 1: Remuneration to senior executives of CBA
(Source: Remuneration of CBA, 2017)

the board was developed as the collective accountability of the senior management (CBA Pulls
back on Senior Executive remuneration, 2017).
The bank paid insurance during the financial year in term of policy for the benefit of
organisation. Insurance is the appropriate pursuant which determines in section 199B of the
corporation Act 2001. In accordance with commercial practice, insurance policy prohibit
disclosure of the terms and policy. It includes nature of the liability which insured against
amount of the premium. No application has been made under the section of 237 in the
Corporation Act 2001. Beside this, financial information included in the annual report which has
been prepared and presented with accordance with accounting standards. In addition to this, bank
is also committed to ensure that policies and practices reflect to high standards in the corporate
governance (Flege and Thomsen, 2017).
There are several guidelines has been developed in context of corporate governance, and
enhancement of balance performance and conformance. In the financial year of 2016, bank
governance arrangement consistent with principles and recommendations. Details of the bank
secretaries includes experience and qualifications that are set in the view. Financial information
included in the Annual report which has been prepared and presented in accordance with
Australian accounting standards (Dawid, Harting and van, 2017). This will ensure that
compliance develop in the financial reporting standards. Group managers and business
performance using cash basis to measure profit that which includes key items that excluded from
statutory profit.
3
Illustration 2: CBA board
(Source: Remuneration of CBA, 2017)