Critical Evaluation of ASX Entities and Accounting Framework

This research report critically evaluates the effectiveness of Australian business entities listed on the ASX in meeting the obligations of the conceptual framework of accounting. It explores the role of the conceptual framework, as set by the IASB and adopted by the AASB, in ensuring consistent and comparable financial reporting. The study investigates whether ASX-listed entities successfully meet the objectives of General Purpose Financial Reporting, satisfy recognition criteria for financial statement elements, and exhibit fundamental qualitative characteristics. The research methodology includes both primary data collection through surveys of financial managers and secondary data analysis via literature review. The report also addresses ethical considerations, ensuring privacy, confidentiality, and the avoidance of bias. The aim is to understand how the conceptual accounting framework improves the quality of financial reporting in Australian businesses, ultimately assessing their ability to meet the needs of financial report users, particularly investors.

Name : ________________________________________________
Student ID : ____________________________________________
Proposed Research Title: Critical evaluation on the effectiveness of the Australian
business entities listed on ASX to meet the obligations of the conceptual framework of
accounting
Research Background
The conceptual framework as set the International Accounting Standard Broad (IASB)
aims to provide the fundamental concepts in relation to the financial reporting that helps the
accounting board in different countries in developing the International Financial Reporting
Standards (IFRS). The main purpose of developing the conceptual framework is to ensure that
accounting standards are conceptually consistent and similar type of accounting transaction are
treated in the same way globally in order to provide the required information to the investors, and
other stakeholders. The Australian Accounting Standard Board has successfully adopted the
conceptual framework developed by the IASB and developed their own accounting standards
known as Australian Accounting Standards (AAS). The accounting standards are applicable on
all the listed entities and also unlisted entities with some minor changes (Macve, 2015).
During the past few years issues related with conceptual framework has attracted lots of
researchers to take the consistent research in order to find and discuss the issues so that better
understanding between the conceptual framework and accounting standard can be developed. As
per conceptual framework all the listed entities are required to meet the objectives that are
defined for the General Purpose Financial Reporting. It is essential for the listed entities to make
sure that target audience of the General Purpose Financial Reporting can be able to understand
the financial report adequately and can able to make comparison with another financial reports
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easily. The target audience uses the information in the financial report to gather the required
information so that they can satisfy their needs. The main target audience of the General Purpose
Financial Report is investors who use the financial information to make the investment decisions.
So it is critical to provide such information the financial reports that are easily understandable,
comparable and easy to derive. There are many fundamental qualitative characteristics of
financial reporting that is defined under conceptual framework and it is expected that all the listed
entities must exhibit all such fundamental qualitative characteristics of the financial reporting in
their financial report. Listed entities are required to satisfy the recognition criteria for the various
elements of financial statements in notes to accounts so that investors can easily measure the
value of financial item and make their decision accordingly (Christian and Lüdenbach, 2013).
So to highlight the effectiveness of Australian Corporations to meet the obligation of the
conceptual framework so to satisfy the needs of users of financial report, this research has been
taken up.
Research Problem / Research Question
Does the Australian Corporation have been successful in meeting the requirement of
conceptual framework to satisfy the needs of users of financial reports?
Research Aim and Objectives
The main aim of research is to develop an understanding of the conceptual accounting
framework and its role in improving the quality of financial reporting in Australian Business
Entities. In regards to this research aim, following are the research objectives:
 To analyse and examine whether the Australian Listed Entities has been successful in
meeting the objectives of the General Purpose Financial Reporting
 To find out that the target audience or users of the General Purpose Financial Reports are
successfully able to use the financial reports to gather the information in order to satisfy
their needs
 To find out whether the Australian Listed Entities have been doing well to satisfy the
recognition criteria for the various elements of the financial statements
 To discuss whether the listed entities in Australia have successfully exhibited the
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fundamental qualitative characteristics of the financial reporting
Keywords for Literature Review
Following are keywords that will used for carrying out the literature review:
Conceptual Accounting Frameowrk
AASB & IFRS standards
Quality issues in financil reportig
Accounting regualtions in ASX listed entities
Publication details of relevant articles for literature review
1. Conceptual Framework for Financial Reporting 2010. 2017. [Online]. Available at:
https://www.iasplus.com/en/standards/other/framework
2. Hoffman, C.W. 2016.Revising the Conceptual Framework of the International
Standards: IASB Proposals Met with Support and Skepticism.World Journal of
Business and Management 2 (1), pp. 1-32.
3. Mazhambe, Z. 2014. Review of International Accounting Standards Board
(IASB) Proposed New Conceptual Framework. Journal of Modern Accounting
and Auditing 10 (8), pp. 835-845.
4. Prudence and IFRS. 2014. [Online]. Available at:
http://www.accaglobal.com/content/dam/acca/global/PDF-technical/financial-
reporting/tech-tp-prudence.pdf
Data Collection Plan
As the research is completely based on using the conceptual framework by the listed
Australian Entities, so it is important that both primary as secondary research must be conducted
to gather the sufficient information in the related topic and data analysis can be performed easily.
The primary data will be collected through use of survey questionnaire as the major source of
data collection (Gliner and Morgan 2000). The questionnaire will be sent to 50 financial
managers of the listed Australian Companies in Australia. Questionnaire will be sent through E-
mail and most of questions are close ended so that required information can be gathered to make
the data analysis. Secondary data has been collected through developing the literature review on
the selected topic using the sources such as books, journal articles, published online articles and
information provided on official websites of AASB and IASB (Denzin and Lincoln 2000).
Ethical Consideration
It is important to pay due consideration to the ethical issues that can arise while performing the
research work. The due attention to the ethical consideration helps to improve the authenticity
and reliability of the research results. Some of the important ethical issues that can take place
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while carrying out the research work are privacy, confidentiality breach, unauthorized use of
information, biasness, copyright issues etc (Johnson and Duberley, 2000). It has been made
assure to the authors of published data that information provided their sources will only be used
in the research work and will not be used for any other purpose. Privacy of respondents and other
parties related to research will be maintain through not passing any kind of information to the
third parties. In order to avoid the mis-interpretation of the information provided respondents,
proper due diligence will be made at regular intervals (Crowther & Lancaster 2008).
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References
Christian , D. and Lüdenbach , N. 2013. IFRS Essentials. John Wiley & Sons .
Crowther, D. and Lancaster, G. 2008. Research Methods: A Concise Introduction to
Research in Management and Business Consultancy. 2nd ed. Oxford: Butterworth-
Heinemann.
Denzin, N. and Lincoln, Y. 2000. A Handbook of Qualitative Research. 2nd ed. London:
Sage.
Gliner, J.A. and Morgan, G.A. 2000. Research Methods in Applied Settings: An Integrated
Approach to Design and Analysis. New Jersey: Routledge.
Johnson, P., and Duberley, J. 2000. Understanding Management Research: An
Introduction to Epistemology. London: SAGE.
Macve, R. 2015. A Conceptual Framework for Financial Accounting and Reporting:
Vision, Tool, or Threat. Routledge.
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