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Contemporary Issues in Accounting Executive Summary

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University of South Australia

   

Intermediate Accounting I (ACCT 3003)

   

Added on  2020-03-07

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ACCT 3003 - The importance of the conceptual accounting framework for the creation and development of general-purpose financial statements by commercial corporations is discussed in this paper. The research also considers the importance of restoring the prudence principle in financial reporting to preserve end-user interests.

Contemporary Issues in Accounting Executive Summary

   

University of South Australia

   

Intermediate Accounting I (ACCT 3003)

   Added on 2020-03-07

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Contemporary Issues in Accounting
Contemporary Issues in Accounting Executive Summary_1
Executive SummaryThis report addresses the significance of conceptual accounting framework for thepreparation and development of general purpose financial statements by the businesscorporations. The report also takes into account the necessity of reintroducing prudence principlein financial reporting for protecting the interests of end-users. In this context, the report ahsanalyses the annual reports of two Australian companies listed on ASX for evaluating theircompliance with AASB standards and conceptual framework requirements.
Contemporary Issues in Accounting Executive Summary_2
ContentsIntroduction.................................................................................................................................................4Analysis of Harvey Norman Holdings and Wesfarmers Annual Report as per the AASB and Conceptual Framework Requirements...........................................................................................................................4Harvey Norman Holdings.........................................................................................................................4Future Compliance..................................................................................................................................5Auditor’s Declaration...............................................................................................................................6Financial Statement Analysis...................................................................................................................7Income Statement...............................................................................................................................7Income Statement- Analyses...................................................................................................................8Findings:..............................................................................................................................................8Income Statement- Graphical analyses...................................................................................................8Balance Sheet......................................................................................................................................9Consolidated Position of Financial Statement- Analyses.......................................................................10Findings:-..........................................................................................................................................10Consolidated Position of Financial Statement- Graphical presentation................................................11Recommendations:................................................................................................................................11Wesfarmers...........................................................................................................................................12Future Compliance................................................................................................................................14Auditor’s Report....................................................................................................................................14Financial Statement Analysis.................................................................................................................16Income Statement- Screenshot.........................................................................................................16Income Statement- Analyses.................................................................................................................16Findings:............................................................................................................................................17Income Statement- Graphical analyses.................................................................................................17Balance Sheet- Screenshot................................................................................................................18Consolidated Position of Financial Statement- Analyses:..................................................................19Findings:-..........................................................................................................................................19Consolidated Position of Financial Statement- Graphical presentation................................................19Recommendations.................................................................................................................................20Conclusion.................................................................................................................................................20
Contemporary Issues in Accounting Executive Summary_3
References.................................................................................................................................................21IntroductionThe conceptual accounting framework is developed by the International AccountingStandards Board (IASB) for providing guidance to the business organizations globally indevelopment of general purpose financial statements. This is done mainly to improve the qualityof financial reports for increasing their usefulness to the end-users. In this context, the presentreport analyses the significance of current accounting framework in meeting the needs of users offinancial reports (Hoffman, 2016). For the purpose, the compliance of annual reports of twoASX listed companies’ accordance with the AASB (Australian Accounting Standards Board)and conceptual accounting principles is being done. The companies selected for the purpose areHarvey Norman Holdings and Wesfarners, both involved in retail industry of Australia. Thereport also analyses the need of including prudence concept again in the conceptual frameworkfor addressing disparity in corporate reporting. Analysis of Harvey Norman Holdings and Wesfarmers Annual Report as per the AASB and Conceptual Framework RequirementsHarvey Norman HoldingsThe director’s report of the company states that Harvey Norman Holdings Limited is aretail company publicly traded on ASX and operating mainly in Australia and New Zealand(Harvey Norman Holdings Ltd: Annual Report 2016, 2016). The report incorporates a statementof compliance that states all its financial statements are developed as per the Corporations Act2001 as depicted from the below screenshot:
Contemporary Issues in Accounting Executive Summary_4
The company has also mentioned in its directors; report the information about the methodadopted for measurements of its financial and intangible assets as depicted from the belowscreenshot:
Contemporary Issues in Accounting Executive Summary_5
Future ComplianceThe company has also disclosed information about its future compliance with the AASB9 and AASB 139 standards as evident from the screenshot:Auditor’s DeclarationThe auditor’s report of the company also declares that director’s have developed thefinancial report of the company in accordance with the AASB and Corporations Act 2001 asevident from the attached screenshot:
Contemporary Issues in Accounting Executive Summary_6

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