Week 1-2

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La Trobe University *

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LLBBC

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Accounting

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Apr 3, 2024

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ACC2CRE – FINANCIAL ACCOUNTING AND REPORTING WEEK 1 IN-CLASS ACTIVITIES RQ1.2 What is the IASB and how does it affect financial reporting regulation in Australia? RQ1.3 What enforcement powers does the IASB have? RQ 1.6 Provide a justification as to why large companies should have to produce financial statements that comply with accounting standards but small companies should not have to do this. RQ 1.19 What are some of the possible cultural impediments to the international standardisation of accounting standards? 1

Challenging questions CQ 1.25 Visit the website of a company listed on the ASX. Review the company’s corporate governance disclosures and determine whether the company complies with the ‘Eight Essential Principles of Corporate Governance’ identified by the ASX. If the company disclose non-compliance, evaluate the reasons provided for non-compliance. Answers vary with the years and company chosen. CQ 1.29 It is argued by some researchers that even in the absence of regulation, organisations will have an incentive to provide credible information about their operations and performance to certain parties outside the organisation; otherwise the costs of the organisation’s operations will rise. What is the basis of this belief? RQ 2.7 What is general purpose financial statement? RQ 2.25 Identify and explain some of the perceived shortcomings of the conceptual framework. 2

RQ 2.26 Why would the Conceptual Framework be considered to be a normative theory of accounting? Challenging questions CQ 2.28 For each of independent situations identified below, consider and conclude whether the entity is required to by the Corporation Act to prepare financial statements and, if so, whether is a ‘reporting entity’. You should also note the reporting implications of your decisions. (a) ABC Pty Ltd is small proprietary company. The shareholders are Mr and Mrs ABC, who also manage the company’s day-to-day operations. The Company’s bankers, The Bank, receive monthly management accounts, budgeted cash-flow information and the year-end statuary accounts. (b) F Pty Ltd is a large company- one of only two in Australia- involved in the manufacture of widgets. Although the shares are tightly held- by family members- the company employs more than 200 staffs. The company has a small number of major suppliers. The company’s sole banker receives the company’s statutory accounts under its borrowing agreement. (c) E Trust is a private trust wherein up to a maximum of 30 members may deposit amounts to be invested in blue-chip equities. Members’ funds consist of units of $1 each. Quarterly reports are produced, which disclose the market value of the trust assets and the value of each member’s entitlements. 3

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