HI6025 Accounting Theory: Financial Reporting in Australian Companies

This report explores the usefulness of financial reporting in Australian companies, with a specific focus on accounting for employee benefits. It analyzes two research-based journal articles to address contemporary issues such as the increasing costs of worker benefits, changes in benefit offerings, and the role of brokers. The report examines mandatory and optional benefits, explores research questions related to health regulations and employee benefits, and compares the two studies, highlighting similarities in budget considerations and market competitiveness. It also discusses the implications of accounting for employee benefits for various stakeholders, including accountants, accounting regulators, and external users, concluding with a summary of the key findings and implications.

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REPORT ON USEFUL OF FINANCIAL REPORTING IN AUSTRALIAN COMPANIES
By (Name)
Course
Tutor
University

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Table of Contents
Executive Summary………………………………………………………….3
Introduction…………………………………………………………………..4
Reason for Selection of the Articles………………………………………….4
Purpose of the Articles and Research Questions……………………………..6
Similarities and Differences in the Studies…………………………………..7
Implications of Accounting for Workers Benefits…………………………...8
Conclusion…………………………………………………………………..10
List of References…………………………………………………………...11

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Executive Summary
The report herein, focuses how companies can implement workers benefit and the
useful of the accounting for employees’ benefits to financial companies in Australia. The
report also highlighted various aspect in connection to benefit of accounting for workers
remuneration and reimbursements. Henceforth, it ended with a conclusion that summarises
the all report.

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Introduction
Employee benefits constitutes all incremental and compensations beyond direct
payment workers receive during their time of direct remuneration package as deduced by
(Dechow, Myers & Shakespeare 2010, pp.2-25). Employee benefits are often featured as
fringe reimbursements, because they increase employees’ salary and wages for the period
worked in representation to core of monetary remuneration of employees’ package. Some of
these fringe characterized benefits are voluntarily presented by employers and others are
mandatory form the government to employers. According to Adin and Mendizabal (2016,
pp.23-89), is that these benefits are ranging from cash that can result to decent standard of
living. Therefore, this report has looked at contemporary issues related to accounting for
employee benefits and how useful they are significant to financial companies in Australia.
Reasons for Selecting the Two Articles
The two research-based journal articles selected are Journal of Accounting and
Marketing and Journal of Business Finance and Accounting. The first journal was written by
Daniel (2010, pp. 1-255), whereas the second article was written by Christina (2009, pp.1-
389). The group selected the two articles due to various reasons, but only few of these
reasons will be explained in this report.
Emerging issues on increasing cost of workers benefits
According to research conducted by Daniel (2010, pp. 44-65) in the journal of
Accounting and Marketing is that one in every three employers or thirty five percent are
saying the cost of accounting for employees health care have increased drastically compared
to past few years. Whereas, forty percent of employers said health benefit cost have increased
with as small percentage and the rest which representing twenty-two percent stated that the
cost have remain the same. However, Christina (2009, pp. 111-118), provided some of the

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strategies in which employers can utilize to address this issue. In the Journal of Business
Finance and Accounting (2009, pp.1-389) some of strategies and advice given include the
following; employers should shift organization’s contributions techniques to define
contribution but not to a define benefit. In other words, workers should be allowed to select
their benefits with their benefit provider company. The strategy can be of benefits to
employees from retirement to health-care as well as to employers by saving their time and
money.
Contemporary issues in change of benefits be offered by employers
According to Christina (2009, pp. 44-67), employers are continuous reducing workers
benefits costs through the implementation of consumer driven planning and self-insuring.
They also introducing health saving accounts for their employees, launching of wellness
programs within the companies and increase of voluntary benefit offers. However, there are
various approaches of dealing with benefit cost changes and reductions.
Eventually, workers education is the primary key in addressing aspect in relation to
accounting for employee’s benefits. Also, companies managers should communicate with
workers why an organization has decided to offer the benefits to its employees as well as
enforcement of employees’ company values should be communicated (Christina 2009, pp.
44-67).
Contemporary aspects of working with brokers
Christina (2009, pp.1-389) also highlighted that most employers work with brokers
and agents of benefit provider companies. Christina (2009, pp. 1-389) explain that sixty-five
percent of employers claims PPACA has prepared to rethink about the workers benefits
offerings. While, twenty-one percent of the employers have considered moving their
employees to public exchange benefit providers. The strategy to address this problem is that

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companies should use brokers and agents to provide them with options and information of
solving problems related to accounting for worker benefits.
Purpose of the Two Articles and What Research Questions their Explore on the Topic
The purpose of the two articles selected in this report are to address various
contemporary issues related to accounting of employee benefit. The first research based
articles reviewed indicated that workers benefits cost has been a challenges to many
companies in the past not only today. According to the author of the article Daniel (2010, pp.
1-255), the challenges facing employee benefits can be eliminated in an organization or
company if workers are involved in the implementation process and selection of their benefits
(Gonzalez-Aleu 2012, p. 243). The research literature highlighted that cost increase, changes
of benefits and employers feeling of pressure from the reform of new health benefits
regulations can be addressed by use of strategies and techniques provided in (Daniel 2010, p.
234). The second research literature based articles was used to find various aspect influencing
workers benefits. These factors can be categorized either into mandatory or compulsory
benefits and non-mandatory or optional benefits.
Mandatory benefits
Some employees’ benefits are compulsory and companies must take care of them.
These benefits are unemployment and worker’s compensation, and the Family and Medical
Leave Act for companies that comprises of more than fifty workers (Muse, Harris & Field
2015, 172). In addition, the articles also help in exploring of various and significant legal
requirement in various countries.
Optional benefits
The non-compulsory workers benefits should also be accounted for by the company.
These benefits include paid vacations, appropriate pension scheme plans, health insurances,

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and tuition remuneration package (Walsh 2012, p.192). Optional benefits are mainly based on
the length in which an employee as worked in a particular organization as well as level of
work performance of productivity. The article also indicated that employers should embrace
competitive wages and salaries, and benefits to help in improvement of employees’ retention.
Company can as well as proposal profit sharing has their optional benefits (Lee & Kim 2015,
p.23).
Research Questions Explore by the Articles on the Topic
The research questions being explored on the topic accounting for employee benefit by the
two articles are;
1. How can financial companies abide by the health regulation Act and Family and
Medical Care Act?
2. What type of employee’s benefits financial companies can account to their workers?
3. How companies can enhance employee’s benefits?
4. What factors are affecting companies from being accountable for employee benefits?
Similarities and Differences between the two studies
The two articles are similar in two ways. First, they suggest that companies should
look at their budget constraints when accounting for employees’ benefits (Hunk 2014, 481).
The company have to belief and understand how its workers are motivated to work either by
giving monetary benefits and re-establishing of the organization mission. By re-establishing
of the organization mission the company will be able to determine what it gives to its
workers. The two studies highlighted that small organizations with imperfect budgets can
match its smaller wages and salaries with a bigger remuneration package (Badertscher &
Rego 2009, p.65). These package may include salaries and bonuses increment based on
particular attained goals. However, the starting wages and salaries of a company can be low

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but can increase with time, enabling the company to recruit more skilled and talented
workers.
The second similarity from the two articles is that companies should put into
consideration of what their counterparts are offering in the market. According to Journal of
Business Finance and Accounting by Daniel (2010, pp. 1-255) is that what a company
competitors are offering to employees should be consider to enable the organization to
compete successful in the marketplace. In addition, Christina (2009, pp. 1-389) stated that
small business that might not afford to offer good employee’s benefit and remuneration
package as their competitors but can afford to offer conducive and welcoming working
environment normally escalate employee or worker job satisfactions.
The differences the two articles is that the first articles focuses mainly on issues
affecting the accounting practices and accounting of employee benefits, while, second article
mainly account of the benefits of workers benefits. For instance, first studies looked at job-
related expenditure crackdown. While the second article, focuses on what a company should
account for as workers costs benefits (Hladchenkol 2014, p.170). For instance, health
insurance can be expensive to an employee when he/she is left to handle it, but when
employer insured an employee to a health provider company he/she will be able to cater for
the expensive through the help of the insurance company.
Implications of each Accounting for Employee Benefits to Various Stakeholders
Study by Christina (2009, pp. 1-389) highlighted two implications for accountants
which are; medical and transportation implications and paid holidays implications to
accountants. Study by Daniel (2010, pp. 1-255) state two implications to accountants which
are employment appointment bonuses and flexible education assistance program.

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Accounting regulators implications; according first articles these implications are job
satisfaction and, mediation between companies and employees (Cerner 2011, p.45). The
second study implications include HR practices regulations and controlling of the rules.
The implication of the accounting for employee benefit of external users, the first
articles suggested that accounting benefit will be reduction of tax changes and delivering of
deadline without individuals straining themselves (Cerner 2011, p.45). While, the second
articles implications comprise of getting of external user on board of modern technology
benefits and, growing and sustaining external user practices in their working environment.
Conclusion
In summary, the report reviews the reasons for the selection of the two research-based
articles journals that are connected to the topic of the research. It also explains the purpose
and related research questions which are explored by the two literature research articles in
section two of this report. Finally, it beheld the similarities and differences, as well as the
implication of the accounting of benefits to various stakeholders.

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List of References
Adin, I., & Mendizabal, J. (2016). Key Performance Indicators (KPIs) of Employee. IEEE
Transactions on Intelligent Transportation Systems, pp.23-89
Badertscher, B.A. & Rego, S.O., (2009). Earnings management strategies and the trade-off
between tax benefits and detection risk: To conform or not to conform? The Accounting
Review, 84(1), pp.63-97.
Cerner, H. (2011). Project administration metrics, KPIs, and consoles: a guide to gauging
and specialist care project presentation. John Wiley & Sons, pp. 31-54
Christina, G. (2009). The general of benefits accounting for workers benefits in Australia.
Journal of Business Finance and Accounting: (1) 2, (1-389).
Daniel, D.K. (2010). In Accounting of Organization Workers. Journal of Accounting and
Marketing (3, 2010), (1–255).
Dechow, P.M., Myers, L.A. & Shakespeare, C., (2010). Fair value accounting and gains from
asset securitizations: A convenient earnings management tool with compensation side-
benefits. Journal of accounting and economics, 49(1-2), pp.2-25.
Gonzalez-Aleu, F. (2012). Continuous improvement in similarities and differences in worker
benefits: critical success factors. The TQM Journal, p. 243
Hladchenkol, M. (2014). A strategic management of accounting system in employees’
benefits. International Journal of Finance Management, 29(2), 167-176.
Hunk, S. C. (2014). How to generate research question from literature research review. The
TQM and Kaizen Journal, pp.451-501
Lee, J. Y., & Kim, Y. S. (2015). Evaluation and Implication of the Quality of the Workers in
Australia. The Journal of the Petrologic Society of Australia, 24(3), 233-252.

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Muse, L., Harris, S.G., & Feild, H.S., (2015). Work‐life benefits and positive organizational
behavior: is there a connection? Journal of Organizational Behavior: The International
Journal of Industrial, Occupational and Organizational Psychology and Behavior, 29(2),
pp.171-192.
Walsh, R. (2012). Refocusing on the human dimension of quality benefit in working
environment. Future of Working Environment Journal, 3(3), 195-196.