Acfi3009 Contemporary Accounting Issues-Faithful Representation Assessment Answers

Answer:

Financial performance is the major criteria to determine how well the company is working. To achieve the financial performance, the organization has to apply the accounting process. The accounting process is generally the need of each public company to take care of the financial performance of the organization. Therefore the organizations are of the idea to prepare the reports and the guidelines to make the operations of the business easy and creative. It also helps the stakeholders to understand the performance of the business which leads to better decision making on their part. In this report a detailed analysis of the accounting process and its association with the Atlas Pearls Limited has been considered (Chand, Patel and White, 2015).

Company Overview 

Atlas Pearls is serving as the global leader in eco pearling and are specialists in silver and white Pinctada maxima, commonly known as South Sea Pearl. It is founded in 1987 in Claremont, Australia. The company has secured the direct relationship with the retailers at the global level. The company also manufactures rings studs, earrings, bracelets, cuffs, pendants and cufflinks. Earlier the company was known as Atlas Pearls Limited in December 2017 (MorningStar, 2018).

In case of Atlas Pearls Limited it has been found that after taking into consideration the conceptual framework the Atlas Company has designed the annual reports of the company. The relevant accounting standards have been followed by the company only to main a record of the performance of the company. The financial statements are made in accordance of the rules and regulations. The examples of the follow up of all the policies are outlined below.

Financial notes have been included for the ease of the shareholders to understand the financial aspect with the financial statement. Since the uniformity and the performance of the companies are most important factors for the shareholders all the transactions are entered on the basis of the regulations prescribed by IFRS and according to the conceptual framework. The auditor’s report and the director’s report are the key drivers that exhibit a relationship involved with the measurement of the performance and opportunities (Deegan, 2014).

From the above analysis it can be concluded that the presentation of the financial statements are satisfactory and still there is a room for improvement to survive in the competitive market.

Compliances

A detailed analysis of the fundamental characteristics of the company has done and compared against the compliance structure set by the authorized body. Compliance also requires the statutory requirements and the feedback from the investors. Moreover the compliance also deals in the preparation and presentation of the financial statements as per the relevant standards (Loftus, et al 2015).

Relevance:

Relevant information is the core element in the conceptual framework and it helps the shareholders in taking the decisions of the investment. It can be observed from the annual report of the Atlas Pearls Limited that in terms of the presentation the company has improved the same. The managers have worked in the most creative manner so that it becomes easy for the corporate level managers to understand the data so presented. The decisions are taken in a better manner if the recordings are in the presentable manner (Elad, 2016).

faithful Representation 

Faithful representation is a necessary step that requires the presentation of the financial and the non-financial information with the most appropriate evidences so it becomes a faithful evidence for the investors and the stakeholders. There should be a proper scrutiny of the activities operated in the business. In case of Atlas Pearls Limited all the new projects and the ideas and workings or transformation in the organization has been presented briefly.

Comparability 

The comparable information is necessary in the annual report of the company to give an idea of the present as well as the past year. The example states in a better manner with regards to the comparability of the information. The information when compared with either the standards or the past year performance of the company. In case of Atlas Pearls Limited the comparison has been shown and recorded below (Díaz, et al 2015).

Understandability 

From the level of understandability it can be deduced that the information shall be organized in such a manner that it is easy to comprehend and understand. Without the correct understanding of the information the investors and the shareholders will fail to make the right decision. Therefore to build the trust level for the longer duration the improvement becomes necessary for the organization. The understanding of the financial items is necessary as without it the financial statements cannot be understood (Cajaiba-Santana, 2014). Therefore the language of the content in the report shall be easy to read and understand. Moreover the investors are more interests in the short level of presentation. In case of Atlas Pearls Limited the content is written in the simplest manner.

Verifiability

The verifiability plays a vital role in determining the financial performance of the business. Without the verification of assets and liabilities of the business, the operations of the business cannot move forward. The new era suggest that the introduction of the conceptual framework has brought a great amount changes in the working style of the organization. Atlas Pearls Limited presents all the details of the company and gets its verified with the certified auditor as mentioned in the auditor’s report. After the verification the final reports are prepared which can be distributed among the shareholders (Barker and Teixeira, 2018).

Timeliness 

Lastly, the timelines describes the importance of the presenting the information at the right time. The right time is necessary because it is capable of influencing the decisions. When the information of the Atlas Pearls Limited was presented it was observed that almost all the information reached to the managers and the corporate level at time. The time is an important factor as it results in the fluctuation of the prices over a given period of the time (Macve, 2015).

Therefore it is necessary to evaluate the timeliness factor of the company as to whether the company is generating the reports on time and whether the invetsors are getting correct information or not.

Evaluation of the statements

The main motive of the discussion of the financial reports is to measure that whether the shareholders, investors, financial institutions and all the shareholders and the stakeholders to recognize and measure the financial performance of the business so that the business decisions can be taken. For the smooth comparison it has been observed that the reports were in accordance and compliance with the necessary standards.

The overall study on the financial report could have been possible only because of the five factors possibly discussed above. For some stakeholders the basic knowledge of accounting is sufficient but for some whose income depends majorly on the investments is keen about the entire knowledge of the business. The interest lies in the areas such as profitability, stock price. With the detailed analysis, the comparison becomes easy and the decision can be taken at the faster pace (Spiceland, et al 2018).

Accounting knowledge evaluation 

There is a debate over the fat that the stakeholders need to have a proper and the full knowledge about al the concepts of the accounting, but the truth is different from what it has been perceived. Most of the stakeholders are still unaware and yet make the decisions under the influence of the other investors and the stakeholders, the level of the profitability derived by the company in the current year as well as the present year. Through the study it has been found that now the sufficient knowledge is required on part of the stakeholders. It would make the financial items a bit easy for them to compare with the industry benchmarks.

Conceptual framework is basically designed for those people who have the less knowledge about the financial items, the accounting policies and the guidelines to identify the actual performance of the company and form the decisions on the basis of that (Barker and Teixeira, 2018).

General Purpose Financial Reporting Requirements

The examiner's report and the executive's report are the key drivers that display a relationship required with the estimation of the execution and openings. The basic criteria to determine whether the financial statements are prepared in such a way that the information so deduced shall met with the expectations of the users so that it becomes easy for them to make any decisions (St Amant, 2014). In case of Atlas Pearls Limited the detailed analysis gave an outlook of the performance of the company, and determines how well the company has complied with the entire rule and regulations set up by IFRS. The report also examines the GPFR rules that have been followed by the company to prepare all the financial statements that are to be issued by to the investors (Macve, 2015).

Conclusion 

The conceptual framework has been analyzed with the sets of the different examples and apart from this IFRS rules and GPER rules have also been focused on and discussed about. The main objectives of the guidelines are to follow the rules and the regulations to provide the faithful and the relevant information to the stakeholders. To conclude the Atlas Pearls Limited annual report is prepared keeping in mind all the standards, provisions and the conceptual framework so that the performance can be enhanced and grown.

References

Barker, R. and Teixeira, A., 2018. Gaps in the IFRS conceptual framework. Accounting in Europe, 15(2), pp.153-166.

Cajaiba-Santana, G., 2014. Social innovation: Moving the field forward. A conceptual framework. Technological Forecasting and Social Change, 82, pp.42-51.

Chand, P., Patel, A. and White, M., 2015.Adopting international financial reporting standards for small and medium?sized enterprises. Australian Accounting Review, 25(2), pp.139-154.

Deegan, C. M., 2014, Financial accounting theory, 4th ed., North Ryde, N.S.W. McGraw-Hill Education (Australia) Pty Ltd

Díaz, S., Demissew, S., Carabias, J., Joly, C., Lonsdale, M., Ash, N., Larigauderie, A., Adhikari, J.R., Arico, S., Báldi, A. and Bartuska, A., 2015. The IPBES Conceptual Framework—connecting nature and people. Current Opinion in Environmental Sustainability, 14, pp.1-16.

Elad, C., 2016. International Classification of Financial Reporting, Christopher W. Nobes.Routledge, Abington, UK (2014),(160 pages,£ 95), ISBN: 0415736935.

Loftus, J, Luke, B, Leo, KJ, Boys, N, Daniliuc, S, Hong, A, & Byrnes, K 2015, Financial Reporting, 1st ed., Wiley, Melbourne. ProQuest Ebook Central.

Macve, R., 2015. A Conceptual Framework for Financial Accounting and Reporting: Vision, Tool, Or Threat?. Routledge.

MorningStar, (2018) Atlas Pearls Limited [Online] Available from https://www.morningstar.com.au/Stocks/NewsAndQuotes/ATP [ Accessed on 17^th December 2018].

Spiceland, D., THOMAS, W., Nelson, M., TAN, P.H.N., Low, B. and LOW, K.Y., 2018. Intermediate accounting. United States: John wiley & Sons

St Amant, R., Yazdanbakhsh, A., Park, J., Thwaites, B., Esmaeilzadeh, H., Hassibi, A., Ceze, L. and Burger, D., 2014. General-purpose code acceleration with limited-precision analog computation. ACM SIGARCH Computer Architecture News, 42(3), pp.505-516.

Zhang, Y. and Andrew, J., 2014. Financialisation and the conceptual framework. Critical perspectives on accounting, 25(1), pp.17-26.