Accounting Theory and Current Issues: A Report on Westpac Banking

This report provides an accounting analysis of Westpac Banking Corporation, focusing on current accounting principles and issues. It discusses the characteristics of accounting principles, enhancing qualitative characteristics of financial reports, and the conceptual framework followed by the company. The report examines issues arising from the Royal Commission, analyzes Westpac's annual report, and assesses the relevance, faithful representation, and timeliness of its financial information. It also covers understandability, comparability, verifiability, and the movement in the company's share price, concluding with recommendations based on the findings. This document is available on Desklib, where students can find a variety of solved assignments.

Running head: ACCOUNTING THEORY AND CURRENT ISSUES
Accounting Theory and Current Issues
Name of the Student:
Name of the University:
Author’s Note:

1ACCOUNTING THEORY AND CURRENT ISSUES
Executive Summary
The aim of the assignment is to conduct an accounting analysis and finding on the accounting
principles and the current issues of the accounting in the company. The assignment deals with
the current accounting principles and the ways for dealing the same. The characteristics of the
accounting principles and the enhancing qualitative characteristics of the financial report were
discussed in the assignment.
The conceptual framework of the accounting were discussed for the financial report of the
company and the relevant accounting theory followed by the company were discussed in the
report.
The issues based on the Westpac Banking Corp. and the current issues based on the company
and the relevant news and articles related to the same were discussed for the same.
The financial performance of the company and the relevant performance of the share price of the
company were assessed in detail.

2ACCOUNTING THEORY AND CURRENT ISSUES
Table of Contents
Introduction......................................................................................................................................3
About Westpac Banking Corporations........................................................................................3
Conceptual Framework................................................................................................................3
Discussion........................................................................................................................................4
Westpac Issue based on Royal Commission...............................................................................4
Analysis of the Westpac’s Annual Report...................................................................................5
Relevance, Faithful Representation and Timeliness....................................................................5
Understandable, Comparability and Verifiability........................................................................6
Movement in the Share Price of the Company............................................................................7
Conclusion.......................................................................................................................................9
Recommendation.............................................................................................................................9
Reference.......................................................................................................................................10

3ACCOUNTING THEORY AND CURRENT ISSUES
Introduction
There have been many issues, situations faced by the major companies of the Australia
Banking system, and the relevant accounting standards followed by the company were discussed
in the assignment. The report will currently aim and discuss about the current issues of the
accounting and the relevant characteristics of the accounting standards followed by the company
(Atkinson 2018).
About Westpac Banking Corporations
It is important for discussing the background of the company and the same has been
evaluated in the assignment. The Westpac Banking Corporation also known as the Westpac
Company; the Australia Banking company is located and headquartered in the Sydney. The
company provides financial advisory and services primarily in the finance and insurance sector
and consumer banking services, and other corporate financial services such as investment
banking services, global wealth management and other private equity related services. The
company provides various kinds of financial services and the different services of the business
are divided into various subsidiaries divisions of the company (Finizio 2018).
Conceptual Framework
The scope of the accounting principles were assessed in order to identify the accounting
principles and policy followed by the company in the preparation of the financial statement and
relevant reports (Athanasiou 2015).

4ACCOUNTING THEORY AND CURRENT ISSUES
Discussion
Westpac Issue based on Royal Commission
The Westpac Banks along with the other major banks in Australia have been under the
review of the Royal Commission for intense scrutiny about the various issues reported against
the company. There were various instances when the banks used to charge fees by the customers
when the banks used to not provide services for the same. The company claimed that the same
happened due to some technical errors and failures in the operational process of the work
(Schaltegger and Burritt 2017).
The Royal Commission based on the charges is now scrutinizing the issues and charges
faced by the company and issues raised are being discussed in several round of hearings.

5ACCOUNTING THEORY AND CURRENT ISSUES
Analysis of the Westpac’s Annual Report
The analysis of the Westpac Financial Report involved analysis of the financial report for
the company was evaluated by analyzing the financial position of the company. The profitability
of the company had remained over the last quarter and the changes in the profit level has been
observed in the company due to the falling customer base (Berry, Broadbent and Otley 2016).
While analyzing the financial report of the company it was clear that they might face
some litigation issue and have to make provisions and pay other fees. The company may also
issues related to the administrative actions and other actions taken by the company which can
result in disruptions in the operations of the bank.
Relevance, Faithful Representation and Timeliness
The primary sources of generation of revenue for the company is the income earned from
the fees and other kind of services charge revenue earned by the company for the various kinds
of services provided by the company. The company has followed the Australian Accounting
Standard Board and the Corporation Act, 2001 for preparing the financial statements of the
company and the relevant financial statement has been made in accordance with the same
(Granof et al. 2016).

6ACCOUNTING THEORY AND CURRENT ISSUES
The proportion of fees and commissions earned by the bank were inconsistent and the
volatility in the numbers presented by the company shows inconsistency in the same. The issues
and charges faced by the company were discussed and included in the financial statement of the
company. The bank had a good base of customers in the year 20154-16 but the same has fallen
significantly in the recent years. The financial report of the company should be having some
general and necessary qualitative characteristics like relevant accounting informations and data
and the same be presented in a faithful way so that the shareholders can timely make relevant
decisions on the same.
Understandable, Comparability and Verifiability
The company had included relevant information based on the accounting principles
followed by the company but should also include relevant information of the current issues and

7ACCOUNTING THEORY AND CURRENT ISSUES
the operations related information on the annual report of the company. The financial or the
annual report presented by the company though is clear, as the company has given enough
informations and facts about the company (Libby 2017). The financial report of the company
were presented in a comparable way which can be compared by the investors of the company so
that the same can be applied for the decision making by the investors or the stakeholders of the
company. The company should also include recent activities and charges faced by the banks in
the terms of the operation issues faced by the company due to investigation faced by the Royal
Commission (Maas, Schaltegger and Crutzen 2016).
The auditors of the company and the relevant informations had verified the
financial report of the company and data presented by the company has been crosschecked. The
informations and data presented by the company should be relevant and faithful enough so that
the same can be applied in the decision making process. The companies should include and
maintain an accounting policy thereby showing sustainability and smoothening of the annual
profits or the income generated by the company (Almujamed et al. 2017).
Movement in the Share Price of the Company
The stock price of the company and the movement or the changes in the stock price of the
company reflects the market opinion on the stock price. The market reflection and the perception
of the investors is reflective of the indicative stock price in the market, which represent the
current and forecasted information and news on the company. If the forecast for the company is
forecasted to be sound and reflects growth in the earnings estimate for the company then the
same will be reflected in the terms of the higher share price. Issues and information related to the
company plays a significant role in determining the share price of the company (Hyndman et al.
2018). The share price of the company has followed drastically in the last one year, which has

8ACCOUNTING THEORY AND CURRENT ISSUES
been due to the current issues and charges faced on the company by the Royal Commission. The
share price in the last year had fallen for the company in the last year and the improvement in the
same cannot be done and may further fall if the charges and other operational issues comes into
play for the bank (Müller 2015).
The Financial informations and data presented by the company play an important
prospect in determining the investors forecast for the company. The company should include
relevant financial data and other various informations about the company so that the same can be
applied in decision-making process of the stakeholders of the company. The share price of the
company has fallen from 31.28 during December 17 and the share price has fallen to around
24.07 during December 18.

9ACCOUNTING THEORY AND CURRENT ISSUES

10ACCOUNTING THEORY AND CURRENT ISSUES
Conclusion
The analysis of the accounting and the relevant principles followed by the company in the
preparation of the financial statement of the company were discussed. The major findings of the
company included major findings about the accounting policies followed by the company and
the relevant accounting principles followed by the company. The current issues faced by the
company and the analysis of the same was included and the impact the same has on the financial
statement of the company. The financial performance of the company was also assessed in the
assignment and the movement of the share price of the company was assessed in the report. The
movement in the share price of the company and the relevant interpretations of the same were
included in the report.
Recommendation
The financial performance of the company has been volatile and non-sustainable and the
stock price of the company has been falling since the last year after the company started facing
issues related to the fees and services charge they are charging to the customers of the bank. The
company has not disclosed all relevant financial informations and news related to the company.
Thus, overall from a financial feasibility view pointy the company would not be recommended
for investment perspective giving the uncertain business environment and various other factor
which can hamper the operations of the work.

11ACCOUNTING THEORY AND CURRENT ISSUES
Reference
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Regulations and Practices in Kuwait: An Analytical Review. Journal of Corporate Accounting &
Finance, 28(6), pp.14-28.
Athanasiou, A., 2015. Acounting for tax: To deal or not to deal at arm's length. Taxation in
Australia, 50(2), p.99.
Atkinson, R., 2018. The Banking Royal Commision and the price of everything. HERDSA
Connect, 40(3), p.24.
Berry, A.J., Broadbent, J. and Otley, D.T. eds., 2016. Management control: theories, issues and
practices. Macmillan International Higher Education.
Finizio, A., 2018. Aboriginal justice: The true cost of aboriginal incarceration-the case for justice
reinvestment. Bulletin (Law Society of South Australia), 40(4), p.22.
Granof, M.H., Khumawala, S.B., Calabrese, T.D. and Smith, D.L., 2016. Government and Not-
for-Profit Accounting, Binder Ready Version: Concepts and Practices. John Wiley & Sons.
Hyndman, N., Liguori, M., Meyer, R.E., Polzer, T., Rota, S., Seiwald, J. and Steccolini, I., 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), pp.1374-1399.
Libby, R., 2017. Accounting and human information processing. In The Routledge Companion
to Behavioural Accounting Research (pp. 42-54). Routledge.