Project Report: Analysis of Contemporary Accounting Issues in Samsung

This report provides an in-depth analysis of contemporary accounting issues, focusing on Samsung's financial reporting practices and challenges. The report examines the company's response to the Galaxy Note 7 recall and its impact on stock prices and market capitalization. The study utilizes Samsung's 2018 annual report, financial statements, and relevant articles to evaluate the company's adherence to accounting standards and regulations, including GPRS, GAAP, and IFRS. The report assesses the faithful representation of financial activities, fundamental qualitative characteristics like relevancy, timeliness, and verifiability, and concludes that Samsung has generally managed its accounting issues effectively by disclosing relevant information and following proper accounting rules. The report highlights the importance of transparency and simplicity in financial reporting, as well as the role of internal and external audits in verifying transactions.

Running Head: CONTEMPORARY ISSUES IN ACCOUNTING
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Project Report: CONTEMPORARY ISSUES IN ACCOUNTING

CONTEMPORARY ISSUES IN ACCOUNTING
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Executive summary
The report mainly focuses on the contemporary issues in the accounting of Samsung. In order
to identify the same, a study has been done on the annual report, 2018 of Samsung limited,
the current contemporary issue of Samsung has been studied and it has been concluded that
the company is trying to manage the negative impact over the stock price and market cap of
the company. Proper rules and regulations have been followed by the company to disclose
about the issues.

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Contents
Introduction.......................................................................................................................4
Company overview...........................................................................................................4
Objective of Conceptual framework.................................................................................4
Faithful representation of financial activities...................................................................6
Fundamental qualitative satisfaction................................................................................6
Conclusion........................................................................................................................7
References.........................................................................................................................8

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Introduction:
“Contemporary issues in the accounting” is most debatable topic in the accounting. It is
mandatory for each of the public company to follow the accounting process and prepare the
financial statement to keep a track over the financial activities and the performance of the
company. The accounting process is not an easy task as each of the transaction has different
impact on the business and its performance (Elad, 2016). Hence, a set of accounting
standards, rules and regulations have been set by the accounting regulation boards. These set
of regulations makes it easy for the businesses and their stakeholders to identify the exact
performance of the business and make decision about the position and investment in the
company. In this paper, the study has been done on Samsung. the annual report and the
financial statement of the company has been studied as well as various articles have been
studied to evaluate that how the accounting process and stock price of the company has been
changed after the issues with Samsung galaxy note 7.
Company overview:
Samsung is basically a South Korean company. The company has been founded in the year of
1938. It is operating its business under the conglomerate industry. the main products of the
company include apparel, automotive, medical equipment, electronic components, consumer
electronics, home appliances, telecommunication equipment etc. along with various products,
company also offers few services to its customers which include health care services,
hospitality information, retail services, communication technology etc. the company has
expanded its business at worldwide (annual report, 2018). Currently, company is offering its
products and serving the services at every corner of the world.
Conceptual framework:
Conceptual framework is one of the essential parts of accounting process. It helps the
business n maintain and managing the financial performance of an organization. Along with
that, it also helps the business to reveal all the relevant information about the business to its
stakeholders through the annual report of the company (Garrett, Hoitash and Prawitt, 2014).
The main concern is shown by conceptual framework on income, expenditure, liabilities and
assets of the business to identify that whether the amount has been manipulated by the
internal stakeholders of the business for their personal interest.

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The annual report of Samsung (2018) has been studied to identify that whether the entire
rules have been followed by the company or not. It has also been studied that how the annual
report and the manipulation in the annual report of the company has affected the stakeholders
of the business. After the announcement and issues with galaxy note 7 of the company, it has
been found that stock price of the company has been reduced as well as it has also affected
the overall financial performance of the company.
The “contemporary issues in the accounting” requires discussion on minimizing the impact of
the same on an entity in a particular period of time. It is not that sales of phone have been
reduced but the issues have affected the stock price of the company at great extent (Dinnie,
2015). The guardian (2018) has stated that the share price of the company has fell almost 7%
which has reduced the market value of the company as well as it has affected over the
accounting process and capital worth of the business.
The circumstances of a business held responsible for turning a change into a positive or
negative change as this shows how an entity views a particular change occurred in the
external market. The comparison is done by an entity with the external changes to identify its
strengths or weaknesses in comparison with the change. In this case, the change and the new
technology has affected over the business negatively.
However, in case of Samsung, it has been found that in order to record all the financial
transaction of the company in the annual report and in preparation of financial statement,
GPRS and GAAP rules are followed by the company and it also set coordination among the
financial rules of the company regardless the point that company has faced so many issues in
its net worth and performance. The financial statement of the company explains that
transparency and the simplicity rule has been taken into concern while preparing the annual
report of the company (Draft, 2015). It made it easier for the business and the stakeholders of
the business to recognize the internal and external performance of the business so that it
becomes easy for them to make comparison among 2 or more company and make better
decision about the position of the company.
Further, the IFRS standards have been checked into the annual report of the company and
found that all the IFRs rules have been strictly followed in the company so that the
transparency could be maintained as well as the international stakeholders of the business
could easily understand the concept of the business. In order to recognize all the assets and

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liabilities of the business, IAS 136 has been followed by the company and it has been defined
by the company in its annual report as well.
Along with each of the transaction and the recording of that transaction into financial
statement of the company, a financial note has also been provided so that the proper
explanation could be found about that amount. The company has also disclosed all the
relevant information in its annual report related to the internal changes in its annual report as
well as the issue which has affected overall performance of the company (Fontes, 2018). So
that, contemporary issues of stock price because of Samsung galaxy has taken place in the
business. However, the company has managed to record and disclose each and everything in
its annual report and other newsletters in order to manage the performance. In order to record
the reserves of the company, impairment rules have been followed and shown in the annual
report of the company which has helped the company to get over the issues and manage the
performance in the market again (Laffin and Gomes, 2018).
Faithful representation of financial activities:
On the basis of the study over Samsung’s annual report (2018), it has been evaluated that the
entire issue has been disclosed by the company at better level. The annual report of the
company contains detailed notes and narration of each of the financial activity and the issue
of the company so that the accounting error and issues of the company could be reduced at a
great extent (Downes, Kang, Kim and Lee, 2018).
Along with that, a huge number of financial performance and rules have assisted the
organization in order to manage the faithful representation and position of the company. The
company has prepared and presented the financial statement on the basis of the proper
accounting rules. The entire study on the annual report of the company has lead towards the
conclusion that company is not involved in any kind of contemporary issues of accounting.
Fundamental qualitative satisfaction:
However, the fundamental qualities of the company have also been studied to recognize the
accounting performance of the business:
Relevancy:

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Annual report (2018) of Samsung explains about every decision which has taken by the
management against the issue which has risen because of the battery issues in its Samsung
galaxy note 7. It has provided relevant information in its annual report.
Time:
Moreover, the company has recorded all the information timely which has improved the
confidence of the auditors and the stakeholders of the company in its financial statement. The
timely record process also makes it easy for the accountant to record everything properly
(Hyndman, 2018).
Faithful:
Faithfulness of annual report of the company has been evaluated and it has been recognized
that the proper rules have been followed by the company thus the faithfulness of the financial
statement of the company has been improved at better level (Keune and Keune, 2018).
Verifiable:
Lastly, the annual report (2018) explains that the entire issues of the business has been
verified by the internal and external auditors of the company so that each of the transaction
could be verified and the company didn’t found indulged in any of the accounting issues of
the company.
Conclusion:
On the basis of the above study over the contemporary issues and the Samsung’s annual
report, it has been found that issues related to the battery of the company is verified and has
been presented into annual report through considering the accounting rules. The issue was
quite huge for the company however company has taken various steps such as change in the
battery, offer some coupons and rewards to the customers etc to maintain the market cap and
improve the stock price of the company. To conclude, the current contemporary issues of
Samsung limited is still impacting on the company however the impact has been reduced.

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References:
Annual report. (2018). Samsung global. [online]. Available at:
https://images.samsung.com/is/content/samsung/p5/global/ir/docs/2017_con_quarter04_all.p
df [accessed on 22/01/2019].
Dinnie, K., (2015). Nation branding: Concepts, issues, practice. Routledge.
Downes, J. F., Kang, T., Kim, S., & Lee, C. (2018). Does the Mandatory Adoption of IFRS
Improve the Association between Accruals and Cash Flows? Evidence from Accounting
Estimates. Accounting Horizons.
Draft, I.E., (2015).Conceptual Framework for Financial Reporting. 2015-05-01)[2015-07-
20]. http://kjs. mof. gov.cn/zhengwuxinxi/gongzuotongzhi/201506 P.
Elad, C., (2016). International Classification of Financial Reporting, Christopher W.
Nobes.Routledge, Abington, UK (2014),(160 pages,£ 95), ISBN: 0415736935.
Fontes, A. (2018). The Role of the State and Accounting Transparency–IFRS Implementation
in Developing Countries.
Garrett, J., Hoitash, R. and Prawitt, D.F., (2014). Trust and financial reporting
quality. Journal of Accounting Research, 52(5), pp.1087-1125.
Hyndman, N. (2018). Legitimating change in the public sector: the introduction of (rational?)
accounting practices in the United Kingdom, Italy and Austria. Public Management
Review.20(9).1374-1399.
Keune, M. B., and Keune, T. M. (2018). Do Managers Make Voluntary Accounting Changes
in Response to a Material Weakness in Internal Control?. Auditing: A Journal of Practice &
Theory.37(2).107-137.
Laffin, M., and Gomes, T. (2018).The Prevention of Error and Fraud in Accounting. IJAME.
The Guardian. (2018). Samsung share price dives after Galaxy Note 7 phone recall. [online].
Available at: https://www.theguardian.com/business/2016/sep/12/samsung-galaxy-note-7-
share-prices-dives-phone-recall [accessed on 22/01/2019].

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