Marks and Spencer: Current Issues in Company Reporting

This report delves into the current issues impacting company reporting techniques, with a specific focus on Marks and Spencer. It begins by analyzing the company's financial position, considering the influence of UK legal and regulatory frameworks. The report then explores the requirements of UK IFRS and GAAP reporting standards, comparing and contrasting their applications. It investigates the IFRS and GAAP standards suitable for international organizational reporting harmonization. Section 2 evaluates non-financial reporting indicators, such as balance scorecards and consumer reviews, to assess organizational performance beyond financial metrics. The final section examines forecasting techniques relevant to Marks and Spencer. The report highlights the importance of these techniques for informed decision-making, profitability, and stakeholder value, and provides a comprehensive overview of financial reporting practices, international accounting standards, and non-financial performance indicators.

Current Issues In
Company Reporting

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
SECTION 1......................................................................................................................................1
1 Analysing the financial position of Marks and Spencer with considering UK legal and
regulatory influences in reporting techniques.............................................................................1
2 Determining the requirements of UK IFRS GAAP reporting in referenced with Marks and
Spencer's data..............................................................................................................................2
3 Ascertaining the IFRS and GAAP standards which suits the international harmonisation of
organisational reporting..............................................................................................................4
SECTION 2......................................................................................................................................5
4 Evaluation of the non-financial reporting indicators for Marks and Spencer..........................5
SECTION 3......................................................................................................................................6
5 Ascertaining the forecasting techniques for Marks and Spencer.............................................6
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
To ascertain the current issues in the company's reporting techniques which are affecting
the operational aspects as well as market value. In the following study there will be analysis and
theoretical observation over the universal financial reporting techniques such as GAAP, IFRS
and FRS techniques. The reporting concepts and principles will be implied over Marks and
Spencer to determine their responsibility in presenting the effective information to the users of
such data set. Te study will present favourable and beneficial terms which are need to be
implicated by the organisation as to have increment in the performance as well as rise in the
share value of the firm. There will be discussion over qualitative and quantitative techniques
with their advantages and disadvantages as to ascertain their importance in future growth.
SECTION 1
1 Analysing the financial position of Marks and Spencer with considering UK legal and
regulatory influences in reporting techniques
To demonstrate the financial position of Marks and Spencer in accordance with the
various legal and regulatory factors which determines in the reporting methods of this entity.
Therefore, this organisation is one of the leading brand in UK which provides clothes, foods,
products etc. Thus, in accordance with the same there will be requirement of well managed
financial data set with consideration of all the legal method of preparing it. In relation with the
UK's legal environment where the focus of government in having appropriate disclosure of all
the financial accounts from every organisation (Bonsall IV and et.al., 2017). There are various
organisation which in turn facilitating the appropriate guidance and funnelling to the accounting
professionals in context with preparing and presenting the financial reports. The aim of financial
reporting council (FRC) is to funnel and guide the organisations to properly use reporting
techniques as well as make the best quality of corporate governance.
Financial reporting council (FRC)
This is the independent regulatory framework of Ireland and UK which function with the
motive of facilitating the best corporate governance in each organisation. It guides the managers,
accounting professionals as well as auditors to make and present the adequate reports in the
market. Thus, on which they would become to gather the large numbers of shareholders
(Guidance on the Strategic Report, 2014). In addition, the influence of three committees such
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add executive, conduct and codes & standard committees there has implementation of various
codes and ethics as well as guidance to perform the better funnelling among stakeholders.
Changes in the financial reporting in last few years:
There has been changes in the operations of the making and presenting the reports among
the stakeholders of Marks and Spencer. Therefore, IAS/IFRS has the main provocation in
accordance with having the quality reports made from each business unit. Therefore, such
information will be helpful to the market and stakeholders associated with the company. They
will easily analyse and demonstrate the growth of business in making profitable payments of
dividends (Johnston and Petacchi, 2017). On the European countries are provoking the quality
financial reporting technique must be implied over all the countries as a general rule. Therefore,
there has been various debates and discussion over the preparation of such reporting techniques
as well as setting the rules and regulations.
2 Determining the requirements of UK IFRS GAAP reporting in referenced with Marks and
Spencer's data
There are various reporting technique which will be used universally as to have
appropriate reporting of the financial condition of an organisation. Therefore, the presentation of
the financial reports of the organisation is on the basis of providing information to all the users as
well as have stable capital structure. Marks and Spencer will have sufficient amount of funds for
the operation as well as they can become able to make utilisation of the resources in appropriate
manner (Cohen, Krishnamoorthy and Wright, 2017). There will be increment in the numbers of
shareholders as the market value of the entity will be reflect in the internal trade market which in
turn will be attractive to the shareholder's.
International Financial Reporting Standards:
This is the reporting standard which in turn helpful for providing the fruitful guidance to
the accounting professionals in terms of following the universally accepted method of presenting
reports. Thus, the standard which will be helpful for each individual in understanding the
financial criteria of the business (Abdullah, Naser and Al-Duwaila, 2017). It is universally be
proven and accepted that the revenue must be listed in the income statements, assets and
liabilities will be in balance sheet etc.
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Generally Accepted Principles:
This is the records of all the rules and regulation in accounting terminology which
determines the collection of various information as well as specification of various concepts and
principles. Therefore, it can be said that there are list of various principles on which a firm will
perform the accounting entries. Therefore, the framework lies over the motive of presenting the
data set which demonstrate the financial scenario of the business. It must have transparency of all
the records as well as must be well organised.
The similarity and difference among this financial reporting terms such as:
Basis IFRS GAAP
Introduction This is the universally
accepted method of financial
reporting which allows the
international business
(Balsmeier and Vanhaverbeke,
2018).
It ascertains the principles and
standards which are meant to
be followed by the accounting
professionals for better
financial accounting
Performance elements It mainly considers the
existence of revenue, expenses
in the income statement and
assets and liabilities in balance
sheet.
It ascertains revenue, expense,
assets, liabilities, gains, losses
as well as comprehensive
income into consideration
(Haslam, 2017).
Required documents There will be requirements of
income statement, financial
position, change sin equity,
cash flows and footnotes
(GAAP vs. IFRS, 2018).
In the preparation of the
statements of various
statements it considers the
requirement of balance sheet,
income statement, cash flows,
change in equity, footnotes,
statements of comprehensive
income etc.
Purpose It focuses on the concept that It requires the interpretation of
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each and every issues in the
financial data set must be
resolved in accordance with
the IFRS framework and
standards.
the issues with proper
interpretation of such factor.
There will be no provision
which required to be
considered by the managers.
Objectives It specifies the terms that all
the information will be used
and understand by the user on
the wide segmentation. The
same set of rule will be
applicable to both business and
non- business enterprises.
It also provides the
information to the stakeholder
at wide segmentation which
has the separate objectives of
each business (Bonsall IV and
et.al., 2017).
3 Ascertaining the IFRS and GAAP standards which suits the international harmonisation of
organisational reporting
In relation with harmonising the GAAP and IFRS standards in international financial
market. The argument lies in between the international accounting harmonization which will be
helpful in accepting the countries' convergence in monumental tasks. There has been various
generic barriers in the same concept. There are still some places where the barriers like language,
educational level as well as economical level (Johnston and Petacchi, 2017). Therefore, the main
motive of IFRS is to present the accurate standards for all categories of businesses. In order to
harmonize the world with these two principles and standards there is need to have appropriate
promotion of such methods of preparing statements.
Conclusion:
In accordance with the concept of GAAP and IFRS techniques which will result in
providing the accurate framework of recording the financial data in a summarized from.
Therefore, the standard presented by IFRS are the main funnelling module on which a firm can
easily have sufficient amount of funds from the national as well as international investors
(Cohen, Krishnamoorthy and Wright, 2017). On the other side, GAAP provides the guidelines
for accounting concepts and terms which are to be used by the firm on daily basis. Therefore, the
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influence of both the terms in preparing the financial accounts of the business is quite necessary
in terms of decisions making, analysing the profitability, efficiency, liquidity and ability to meet
the debts in a required time.
SECTION 2
4 Evaluation of the non-financial reporting indicators for Marks and Spencer
In relation with the other methods than the financial terms of presenting the
organisational performances. There are various techniques and terms which will be presented by
the professionals in relation with analysing performance of organisation as well as the utilisation
of the resources (Abdullah, Naser and Al-Duwaila, 2017). Thus, the non-financial factors which
will be best of reporting the business reports such as:
Balance scorecard: This is the strategic planning and management system which is
being implicated by various entities as to have adequate analysis over the organisational as well
as employee performance. Marks and Spencer will be helpful in making the appropriate
management of work and workforce by this technique (Balsmeier and Vanhaverbeke, 2018).
There will have effective control over the operations of business activities such as prioritising the
projects, services and products. Similarly, the managers in the organisation at various
departments prepare the scorecard on which they mention small targets and time limits which
provokes the men-force to make efforts in attaining them.
Benchmarking: This is the technique which is also helpful for performance analysis. Iot
ascertain the process of the company in operating under the projected plans. It supports the
selection, planning and completion of the projects. It also demonstrates the total utilisation of the
quality, costs and time over the project which is need to be controlled and overcome by the
professionals as to have appropriate analysis of organisational performance.
Consumer reviews:The feedbacks or reviews from consumers is the right method of
analysing the loopholes in the products and services. It helps in decision making and bringing
innovative changes in the products and services (Haslam, 2017). The designing of the operations
will be helpful in bringing sufficient satisfaction to the consumers.
Industry news: The industry news will be useful in demonstrating the challenges and
competitive needs in the business. Therefore, to retain the shareholders and consumers there is
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need to have dynamic ability in the operations (Bonsall IV and et.al., 2017). There must be
innovative changes In the product line as well as changes in the dividend policies.
CSR: The corporate social responsibility helps in creating the environmental awareness
in the business. Therefore, Marks and Spencer will have profitable market value in the internal
financial market which will be fruitful for creating the unique identity.
Staff turnover: This is the most effective technique which is helpful in making the
adequate analysis over the numbers of employees hired by the organisation as well as numbers of
employees left the organisation. It will be used in examining the turnover reason on which
business demonstrate the accurate reasons behind the job left by the professionals. Marks and
Spencer will be helpful as if they make adequate records of all the information such as improving
the pay slip, reducing the work load, implicating training and development etc.
Public image: This technique helps in determining the brand image in the market. It can
be seen at the platform like social media as well as through indirect approach such as analysing
the sales and provide gathered by the firms (Cohen, Krishnamoorthy and Wright, 2017). To build
a good image in the external environment which will have positive impacts over the business
growth.
Staff development: The performance of Marks and Spencer or any entity lies over the
efforts made by their workforce. Thus, in relation with having appropriate operational gains there
is need to have proper training and educational session which in turn helps in guiding the
employees to perform accurately (Johnston and Petacchi, 2017).
SECTION 3
5 Ascertaining the forecasting techniques for Marks and Spencer
Qualitative techniques:
Market research
This is effective technique which help Marks and Spencer to assess consumer preferences
and needs in the best possible way. Moreover, target markets can be easily analysed and
customer-oriented goods may be supplied quite effectually.
Advantages:
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1. Product planning can be easily done by marketing research and Marks and Spencer
may sell luxury goods to customers.
2. Advertising programmes can be established with the help of marketing research. Thus,
optimum utilisation of resources may be attained (Chand).
Limitations:
1. It is not suitable as it is based on human behaviour which is ever-changing.
2. This technique is unsuitable for forecasting as there are intervening factors analysed
between market research findings and complexity of market forces.
Delphi method
It is effectual forecasting technique which is derived by structured views of panel of
experts. Appropriate decisions are taken by panel of experts of Marks and Spencer quite
effectively.
Advantages:
1. It is quite useful as more number of experts can easily participate.
2. This method allows assessing and identifying priorities which Marks and Spencer
requires ultimately.
Limitations:
1. Data analysis is a tedious task and more rounds are taken to arrive at decision
(Anderson and et.al, 2018).
2. This is time-consuming process and reporting can be biased as per the preferences of
experts. Reliability is completely lost.
Historical analogy
This is another qualitative forecasting technique which is used to forecast sales of similar
product in the near future as well. This method is quite useful for predicting sales on the basis of
historical data.
Advantages:
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1. It is simple forecasting technique which is easy to interpret results in the best possible
way.
2. It saves time for management as it is aligned with past figures and estimation can be
made with much ease about the future (Finn, Goodfellow and Levine, 2016).
Limitations:
1. Historical analogy is unsuitable as it is based on historical data and facts which may be
subject to change in the future.
2. This forecasting technique is not useful as complete estimation is not made and same
predictions are made for new similar product.
Quantitative techniques
Time serve analysis
Time serve analysis is useful technique based on forecasting business sales and behaviour
in the future. This method is quite effective as various time series charts such as line charts can
be prepared with much ease.
Advantages:
1. Historical data is helpful for firm to forecast sales behaviour quite effectively. Line
charts are useful for reliability purpose.
2. Future growth and trend of Marks and Spencer may be analysed. Thus, trend can be
forecasted easily (Mun, 2017).
Limitations:
1. This method is purely based on statistical tools and there are other attributes which are
relevant but ignored.
2. Single events cannot be identified and its impact is difficult to analyse as well.
Net Present Value (NPV):
NPV is useful forecasting technique which is useful for Marks and Spencer to assess
attractiveness of new project and eventually investment may be made in it. Profitability aspect is
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provided by analysing and differencing net present value of cash inflows and outflows (Kuo,
Tseng and Chen, 2016).
Advantages:
1. It is simple to calculate and cost of capital is considered while evaluating effectiveness
of project.
2. It considers time value of money concept and correct value of profitability is assessed.
Limitations:
1. NPV lays emphasis on profitability aspect but ignores quantum of time that will be
taken by project to yield maximum returns.
2. Cost of capital is complex to arrive at and good investments might be ignored.
Internal Rate of Return (IRR):
IRR is another capital investment technique which is basically discount rate makes NPV
of cash flows from project to zero. Thus, this technique is interrelated to NPV and judges
profitability of potential investment.
Advantages:
1. IRR lays emphasis on time value of money concept. Thus, correct profitability of
project is ascertained (Huan-Niemi and et.al, 2016).
2. It is simple to compute and derive conclusion with much ease.
Limitations:
1. IRR is not useful when there are two mutually exclusive projects of different size and
time duration.
2. The concept of economies of scale is completely ignored which is required to obtain
benefits out of project.
CONCLUSION
Hereby it can be concluded that company requires adopting quantitative and qualitative
techniques of forecasting. This will help it to estimate sales and profit behaviour in the best
possible way. Quantitative methods discussed are important so that Marks and Spencer may
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invest in high yielding project which yields maximum returns to it. Thus, overall sales may be
injected and profit can be maximised. On the other hand, qualitative techniques are also
important as past trends may be assessed and future forecast may be made in accordance to
customers' preferences.
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REFERENCES
Books and Journals
Abdullah, A. M., Naser, K. and Al-Duwaila, N., 2017. Students' Attitudes towards the Adoption
of International Financial Reporting Standards (IFRS) in Kuwait. Asian Social Science.
13(5). p.85.
Anderson, and et.al, 2018. An Introduction to Management Science: Quantitative Approach.
Cengage learning.
Balsmeier, B. and Vanhaverbeke, S., 2018. International financial reporting standards and
private firms’ access to bank loans. European Accounting Review. 27(1). pp.75-104.
Bonsall IV, S. B. and et.al., 2017. A plain English measure of financial reporting readability.
Journal of Accounting and Economics. 63(2-3). pp.329-357.
Cohen, J., Krishnamoorthy, G. and Wright, A., 2017. Enterprise risk management and the
financial reporting process: The experiences of audit committee members, CFOs, and
external auditors. Contemporary Accounting Research. 34(2). pp.1178-1209.
Finn, C., Goodfellow, I. and Levine, S., 2016. Unsupervised learning for physical interaction
through video prediction. InAdvances in neural information processing systems (pp. 64-
72).
Haslam, C., 2017. International Financial Reporting Standards (IFRS): Stress Testing in
Financialized Reporting Entities. Accounting, Economics, and Law: A Convivium. 7(2).
pp.105-108.
Huan-Niemi, and et.al, 2016. Combining quantitative and qualitative research methods to
foresee the changes in the Finnish agri-food sector. Futures. 83. pp.88-99.
Johnston, R. and Petacchi, R., 2017. Regulatory oversight of financial reporting: Securities and
Exchange Commission comment letters. Contemporary Accounting Research, 34(2),
pp.1128-1155.
Kuo, R. J., Tseng, Y.S. and Chen, Z. Y., 2016. Integration of fuzzy neural network and artificial
immune system-based back-propagation neural network for sales forecasting using
qualitative and quantitative data. Journal of Intelligent Manufacturing. 27(6). pp.1191-
1207.
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Mun, J., 2017. Qualitative and quantitative modeling of enterprise risk management and risk
registers. U.S. Patent 9,811,794.
Online
Chand, 2018 Marketing Research: Concept, Objective, Advantages and Limitations [Online]
Available Through: <http://www.yourarticlelibrary.com/marketing/marketing-research-
concept-objective-advantages-and-limitations/22286>
Guidance on the Strategic Report. 2014. [Online]. Available through
:<https://www.frc.org.uk/getattachment/2168919d-398a-41f1-b493-0749cf6f63e8/
Guidance-on-the-Strategic-Report.pdf>.
GAAP vs. IFRS. 2018. [Online]. Available through
:<https://www.diffen.com/difference/GAAP_vs_IFRS>.
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