Financial Analysis Report: University Financial Analysis Project 2018

This financial analysis report examines the importance of stakeholder engagement, CSR policies, and integrated accounting systems. The report begins by defining key terms such as stakeholders, CSR, and integrated accounting systems, and then discusses the benefits of stakeholder engagement in decision-making and achieving CSR initiatives. It explores various research theories supporting stakeholder engagement, including CSR and wealth management theories. The report also differentiates between primary and secondary data sources, highlighting the benefits of using a mixed methodology. Furthermore, the report proposes a research project title focusing on the impact of stakeholder theory on fulfilling stakeholder demands. It includes research questions, literature reviews, and analysis of relevant articles exploring stakeholder engagement, ethical decision-making, and the role of accountants in achieving social responsibility goals. The report concludes with a discussion on how companies can manage stakeholder demands effectively.

Financial Analysis
2018

1
By student name
Professor
University
Date: May 12 , 2018.
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Contents
Part 1………..………………………………………………………………….....................................................3
Part 2…..………………………………………………………………………………………………………………..……….…6
References.....……………………………………………………………..........................................................11
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Research Project
Part 1
Requirement 1
The key words in case of a stakeholder’s engagement would include, the stakeholders, CSR policies,
Integrated accounting system etc. Stakeholders are the people who are dependent on the company and
are affected by the activities of the company. The main stakeholder groups would include the investors,
the employee, the public, government etc. Anyone who depends on the company in some or the other
manner would consist of the stakeholder group for that company. There are many theories that
supports the fact that satisfying the interest of the stakeholders in terms of giving them good return for
money that they are investing in the company is a good approach. Investors are the people who invest
their money in the company, they provide the much-needed capital and in return of that the company
provide them with interest and dividend out of the profits that they earn. Thus, this brings to the crux of
the discussion that the main work of the companies is to indulge in wealth maximization and provide the
stakeholders with highest amount of interest (Abbott & Kantor, 2017). The other important term would
include integrated accounting system which means presenting your account in such a manner that it
would cover all the other different stakeholders who are dependent on the company, which brings to
the main point of CSR development. CSR refers to Corporate Social Responsibility which means that the
companies should perform their actions in such a manner that it is beneficial for all the stakeholders
related to the company. Corporate Social Responsibility does not promote the fact that companies
should indulge in wealth based accounting system but states that the aim should be to promote the
overall growth of all the parties that are affected by the actions of the company. This brings to the
discussed research topic whether companies should focus more on wealth based accounting where the
only aim would be to develop income for the shareholders or the aim would be to indulge in a balance
approach that would help in satisfying the needs of all the related parties to the company (Alexander,
2016).
Requirement 2
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Stakeholder engagement refers to the concept where companies would include their stakeholders in
their overall decision making and accountability system. They would ask the stakeholder to put in their
opinion and with regards to the social and environmental issues that would matter to them the most
and include these points in the overall decisions made by the company. This would help in including the
stakeholders in the major decisions that the company makes and help in achieving the CSR initiatives of
the company. The stakeholders may support or oppose the decisions depending on their needs but at
least they can pitch in their demands that the company can consider if needed. It will help the
organizations in understanding such complex issues or concerns that might be affecting the stakeholders
and in the later stages might hamper the overall growth of the company (Boghossian, 2017). The
underlying issue with this concept is that the stakeholders has the chance to influence the overall
actions of the management of the company which is very different from mere communication of ideas
and demands between two parties (YUAN, 2018). But there are a lot of benefits that cannot be ignored,
by doing this the stakeholders will have their say in matter that affect their growth and their
development. They relate to the company so they should have an idea about things that might affect the
company in some way or the other. The stakeholder’s participation will ensure that the company is not
missing on key points when it comes to achieving its overall CSR activities and that would help the
company immensely (Anon., 2017). The stakeholders among themselves can design ways on how they
should participate and what are the areas in which they should focus more (Alexander, 2016). It would
also help in developing good relationship between the shareholders and the company and would lead to
better communication between the two parties. Communication is very right; the stakeholders can put
in their grievances in front of the management easily. And the basic aim of any company is to keep their
stakeholders happy as they are the ones that would help in running the company successfully (Chariri,
2017).
Requirement 3
There is various research based theory that supports the shareholders engagement in a company. The
first and foremost being the CSR theory, which states that the main aim of the companies should be to
fulfil the needs of all the parties that are related to it in a substantial manner and not focus on the
growth and development of one party only. This means that companies should focus on the overall
needs rather than just management of wealth to suffice the needs of the investors who are investing in
the company. It also covers the wealth management theory that relates to creation and distribution of
wealth in such a manner that people who have invested in the company get good returns for all their
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engagements. The stakeholder theory will also encompass how much this will influence the decisions of
the management and till what level there must be coordination between the two. The management also
needs to prioritize the needs of the stakeholders in a way that there should be weightage given to them
based on their overall resilience to the company and its former parts. There are CSR based accounting
guidelines that the company needs to consider and make sure that appropriate reporting is there that
would be helpful for future endeavors (Alexander, 2016) (Coate & Mitschow, 2017).
Requirement 4
Secondary sources of data refer to information from such sources that did not indulged in the
researched activities themselves and do not have firsthand experience related to it. They have only
researched and documented for it that can be used for further analysis by the company. Primary data
sources refer to that sources which are having firsthand experience of indulging in such activities.
Normally people prefer using mixed methodology that would include both the primary data and the
secondary data as that would help in effective analysis. Now we see that Professor Shallow is stating
that using only secondary data would be enough, while Professor Thoughtful is stating that we used a
mix of both the data types. If we analyze clearly it would be better if companies use both sources of data
that would help in effective analysis in a way that both sources have their own importance but getting
data from people who have had first-hand experience would be much better. This can be stated given
the fact that the stakeholders who have experienced this themselves can give a better idea on how their
engagements in the decisions of the company have helped them in securing a good return and how the
management of the company has dealt with their demands. It also makes it apparent that which are the
areas in which the company needs to work to generate more returns. Thus a mix of both the data
sources must be used it would be better for the company and would also help them in taking
informative decisions and even with respect to research paper it would help in generating sound results
that have been totally studied and analysed.
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PART 2: Preparing a Potential Research Project
Title for your Research Project
The title of the research project would include: How helpful have been the stakeholder theory be in
fulfilling the demands of the stakeholders of the company
Importance of Research – It is an important topic to research because there has been a lot of studies
that states that stakeholder’s engagements are important for the companies but there are certain
negative points associated with it in a way that it can lead to too much interference from the
shareholders in the company which may hamper their overall growth. So, it is important that a research
must be conducted to ascertain how much importance should be given to shareholders engagement in
the affairs of the company and up to what extent is that feasible enough. This is the crux of the research
paper to develop an idea about how much and up to what extent does the shareholders can influence
the company and its operations.
Research Question – The most important research question would be –
• How has the shareholders benefited from this theory and up to what extent they have been able
to put in their opinions in front of the company
• The second question would be how the companies have managed to consider the demands of
all the stakeholders in their decisions and whether they face any major challenges because of that.
• The third question would be if the company gives a little more importance to the demands of
the shareholders in relation to all the other parties.
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The minor Questions would include:
• What changes would the company want in these policies of stakeholder’s engagement in their
overall business structure?
• Whether the stakeholders are taking advantage of their position and influencing the decisions of
the company a lot?
• Does all the needs of an effective CSR policy is achieved or not through this theory of including
the shareholders in the decisions of the company?
Literature Review.
The six articles that can be used for explaining the overall process with relation of stakeholder’s
engagement is given below along with proper citation and summary.
Vieira R and his coauthors have stated in their article how companies should align their strategy with
respect to the overall performance management for the companies. This throws light on the concept of
how the performance of the company plays a major role in deciding the fate of the stakeholders. When
companies earn more profit, they believe in the fact that they can provide more returns to the
shareholders of the company and vice versa. Thus, the strategies that the company develops is
somewhere linked to their performance where the stakeholders have little or no say (Vieira, et al.,
2017).
T Webster has stated in his article how companies can indulge in making ethical decisions from the
perspective of accounting. There have been several cases where the shareholders have tried to
influence the decisions of the management of the company to earn from profit through unethical ways.
Hence the same is stated here on how companies can deal with that (Webster, 2017).
C.J. Coate have stated in their article on how the accountants play an important role in achieving the
social responsibility target that has been set by the management of the company. The company and the
management have some social responsibility and it is very important that they work as per that to
deliver what the management would require. Thus, the accountants of the company also play a very
important role when it comes to meeting the standards of the corporate social responsibility and
delivering ethical performance. So, they can also be considered as primary sources of information on
how the insider accounting of the company works (Coate & Mitschow, 2017).
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Ghofiqi in his assessment how having correct knowledge of the accounting standard and principles is
extremely important for the long-term survival of the company and would help the management in
preparing the books of the company to the best of their knowledge. It can also be seen that there are so
many stakeholders so the need should be ascertaining how much influence can one cause in the
finances of the company and in what way they can be held responsible in case there are too much issues
with respect to how the accounting is conducted (Ghofiqi, 2018).
Norberg in his article has stated that how companies who do not deal with the justified CSR
requirements suffers in the long run. Given the fact that it is important on part of the companies to be
ethically correct and for this there are instances when they end up supporting the needs of one party in
place of another party. For example, the shareholders of the company have maximum influence because
they have invested their money in the company, thus from there the entire theory of stakeholder
relationship and wealth management crops in where they decide how they would suffice the needs of
all the parties in sync with the requirements of effective CSR policies (Norberg, 2018).
Wellmer in his article has stated how important it is to be ethically correct when it comes to accounting
because there are so many parties that are related to the company and each are playing an important
role in the success of the company. Hence ignoring all other aspects being ethically correct in all their
endeavors is important so that people will have some faith on the overall company. This responsibility
goes to the management of the company (Wellmer, 2018).
Accounting theories
The major accounting theories to be considered would include the stakeholder wealth management
theory that deals with creating wealth for the shareholders in terms of high return that they can be
provided with. It also refers to the corporate responsibility theory that refers to taking into
consideration the demands of all the stakeholder who area related to the company in some or the other
way and providing them with best results. These accounting theories will be based on the idea that the
goal of the management is not to only satisfy the needs of the shareholders but also to provide them
with appropriate results so that there is maximum benefit in all ends (Coate & Mitschow, 2017).
Methodology
The methodology would include taking into consideration both primary and secondary sources for
research analysis. This would include taking various steps like surveys can be conducted through
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different companies that would include both the large companies and smaller companies. They can be
quizzed on their overall operations related to the management of the company and their overall
responsibility towards their shareholders and other stakeholders would also be discussed.
Market research can be conducted to understand if the CSR policies are implemented feasibly or not
and whether correct measures are taken by the company or not.
Data analysis should be done through manual questionnaires and spreadsheets with effective data from
various companies that can be analyzed for better results. The information with relation to the company
can be found on their websites (Iggers, 2018).
Data analysis can also be done with the help of books and articles that are available on the internet.
There are various scholarly articles that are good source of secondary data for the company and can
help in providing good amount of information. Data can also be taken from publications on the internet
that contains details about the various steps that have been taken by companies in recent times that
suffice to their shareholders needs and what are the prospects they are looking at for better growth in
times to come. All these help in effective analysis of data for the company and provides enough sources
to conduct the research and provide a genuine conclusion based on that research.
Interview Survey Question would Include:
• Asking questions to the management that would be based on what are the steps they are taking
for stakeholder’s appreciation?
• What are possible channels through which they are communicating with the stakeholders?
• Whether such information is secured in sense that it is not influencing other stakeholder?
• Whether the overall approach of the management is unbiased towards all the parties
dependent on them?
• Shareholders can be contacted to ask the whether the management has sufficed with their
needs or not, and whether new opinions should be taken into consideration or not?
• Companies can be asked question on what their prospects looks in terms of CSR policies and
how they are dealing with the application of the same in their financial statements?
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• Management of the company can be asked on how much they pay heed to demand of other
stakeholders for the company apart from the investors?
• Investors can be asked whether they are getting good returns and what changes they would
want in the accounting of the CSR activities?
• Companies would be asked whether they are providing proper disclosure with respect to the
various CSR related activities they indulge in?
• Other stakeholders that include the customers, the government, the suppliers etc can be asked
if the companies are considering their demands along with the that of the investors.
Ethical Approval
Appropriate ethical approval is required to conduct any kind of research in Tasmania, that would include
getting permissions from the appropriate authorities. Before conducnting any kind of research they
need to ask the management of the companies. The information with relation to the companies that
they require and very secured so to get it in an ethical manner they need to file application based on
that the companies would fulfil their demands. There are various other rules and regulations that has to
be taken care of in such situations that require effective research undertaking (Abbott & Kantor, 2017).
In case there in an unethical stance it would lead to heavy penalty and hence all steps should be taken
to avoide it. Thorough knowledge of the ethical issues is also required to effectively follow and
implement them for long term standing.
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References
Abbott, M. & Kantor, A., 2017. Fair Value Measurement and Mandated Accounting Changes: The Case of
the Victorian Rail Track Corporation.
Australian accounting Review.
Alexander, F., 2016. The Changing Face of Accountability.
The Journal of Higher Education, 71(4), pp.
411-431.
Anon., 2017. Explaining auditors’ propensity to issue going-concern opinions in Australia after the global
financial crisis.
Accunting and Finance, pp. Carson,E;Fargher,N;Zhang,Y;.
Boghossian, P., 2017. The Socratic method, defeasibility, and doxastic responsibility.
Educational
Philosophy and Theory, 50(3), pp. 244-253.
Chariri, A., 2017. FINANCIAL REPORTING PRACTICE AS A RITUAL: UNDERSTANDING ACCOUNTING
WITHIN INSTITUTIONAL FRAMEWORK.
Journal of Economics, Business and Accountancy, 14(1).
Coate, C. & Mitschow, M., 2017.
Luca Pacioli and the Role of Accounting and Business: Early Lessons in
Social Responsibility. s.l.:s.n.
Ghofiqi, M., 2018. FORMATION OF VIEWS AND INTERESTS TO THE ACCOUNTANTS PROFESSION IN
MASTER OF ACCOUNTING STUDENTS OF JEMBER UNIVERSITY FORCE OF 2016 USING STRUCTURATION
THEORY ANALYSIS.
THE 3RD INTERNATIONAL CONFERENCE ON ECONOMICS, BUSINESS, AND
ACCOUNTING STUDIES.
Iggers, J., 2018.
Good News, Bad News: Journalism Ethics And The Public Interest. s.l.:s.n.
Norberg, P., 2018. Bankers Bashing Back: Amoral CSR Justifications.
Journal of Business Ethics, 147(2),
pp. 401-418.
Vieira, R., O’Dwyer, B. & Schneider, R., 2017. Aligning Strategy and Performance Management Systems.SAGE Journals, 30(1).
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