Accounting for business

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Executive summary

This assignment is focused on applying different concepts of cost to business

decisions. It includes the discussion of the Conceptual Framework's fundamental

qualitative characteristics of relevance and faithful representation. It includes

discussion of making Stakeholders of National Australian Bank and the role played

by the information collected from the stakeholders in making informed business

decisions. Further it includes the discussion of significance of ethics and corporate

governance in the study of accounting and business environment. At last the

Balance sheet of Advanced Cricket Coaching Pty Ltd and Statement of profit or loss

and Statement of equity of Bulmer limited has been prepared.

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Answer 1

Selected organization: National Australian Bank

National Australian Bank is one of the largest financial institution in Australia.

National Australian Bank provides several financial solutions such as accounts,

internet banking, personal loans and home loans. It is the 21 st largest bank in world

in terms of market capitalization. The bank operates more than 1600 branches

across Australia, Asia and New Zealand.

Major Stakeholders of National Australian Bank

The major stakeholders of National Australian Bank include investors, analyst,

employees and contractors, customers, industrial bodies, regulators, government

and associations, media, suppliers, and the broader community including community

partners and NGO’s.

The organization connects with diverse range of stakeholders. The information

collected from the stakeholders helps the organization in making informed business

decisions. Connecting with the stakeholders is the significant part of strategy of

national Australian bank. The constructive and open dialogue with the stakeholders

helps the organization in discovering new opportunities for improving their

performance (Zhang and Thiam, 2014). It helps the organization in identifying

emerging issues. The information received by the organization helps them in

exploring opportunities for collaborating with their partners and helps them in

understanding community expectations.

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Answer 2

Difference between the Conceptual Framework's fundamental qualitative

characteristics of relevance and faithful representation

The faithful representation and relevance are the fundamental qualitative

characteristics of the financial reporting information. On the other side enhancing

qualitative characteristics includes comparability, timeliness, understandability and

timeliness.

The term Relevance indicates the capability of making difference in decisions made

by the users in their capacity as capital provider (Achim and Chiş, 2014). Relevance

is generally operationalized in confirmatory and predictive value. The relevant

financial report includes both financial as well as non-financial information. The

relevant financial report includes information which provides useful insights into the

business opportunities and risk and provides useful information for predicting the

possible future scenario of the organization.

Faithful representation is the second qualitative characteristics in the IASB

framework. In order to faithfully represent the financial information the annual reports

must be neutral, complete and free from any type of material error (Nobes and

Stadler, 2015). The most common proxies for measuring faithful representation

includes neutrality, freedom from bias, corporate governance statement and

unqualified audit report. In order for the financial reports to be free from the bias, the

financial report should include clear explanations of estimates and assumptions

made by the accountant in preparation of financial statements and the financial

report is considered to be neutral if the report highlights both negative as well as

positive events in the balanced manner.

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Answer 3

Importance of ethics and corporate governance in the study of accounting and

business environment

Corporate governance is multi-faceted topic and is concerned with maintaining

balance between social and economic goals and between command and individual

goals. On the other hand, business ethics is standard of how businesses should be

carried out. It provides guidelines to organization and various stakeholders on

maintaining peace and harmony.

Corporate governance increases the accountability of the organization and helps

them in overcoming major disastors. Corporate governance is important in the

current competitive world for creating corporate culture of accountability,

transparency and disclosure. It helps the organization in improving governance

structures and ensuring quality decision making. It encourages effective succession

planning for the top level of management (Nordberg, 2010). Further it helps the

organization in combating corruption. Corporate governance also enables the

organization in improving their efficiency and accounting information quality.

Ethical codes are the core principals used by accounting professionals for enhancing

their profession, demonstrating fairness and honesty and maintaining public trust.

Ethics is important for maintaining objectivity, confidentiality, integrity, professional

competence and professional behaviour in accounting field. For an accountant to

remain independent and objective, it is necessary to ensure that their professional

judgement and integrity is not compromised (Uysal, 2010). In accounting, ethics

includes both careful assessment of unque situations where it is important to apply

professional judgement and strict adherence to guidelines. The proper

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understanding of ethical framework for integrity, professional competence,

confidentiality and independence can guide accountants in decision making process

and helps them in preserving the reputation of accounting field.

Answer 4

Balance sheet of Advanced Cricket Coaching Pty Ltd as at 30 June 2020

Liabilities amount assets amount

share capital 30000 non-current

assets:

retained earnings 144000 land 37500

loan payables 7500 furniture and 9000

fixtures

tax payables 7500 current assets:

Inventory 30000

account 37500

receivables

cash at bank 75000

189000 189000

Answer 5

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Statement of profit or loss of Bulmer limited for the year ended 30 June 2020

particular Amount

sales revenue during the year 1200000

Less: expenses from ordinary activities 500000

research and development cost 8000

profit before tax 692000

less: income tax expense 101000

profit after tax 591000

Statement of changes in equity of Bulmer limited for the year ended 30 June 2020

particular amount

share capital 1000000

retained earnings 180000

total capital 1180000

less: finance cost 49000

interim dividend paid 40000

share capital as at 30 June 2020 1091000

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References

Achim, A.M. and Chiş, A.O., 2014. FINANCIAL ACCOUNTING QUALITY AND ITS

DEFINING CHARACTERISTICS. SEA: Practical Application of Science, 2(3).

Hartman, L.P., DesJardins, J.R. and MacDonald, C., 2014. Business ethics:

Decision making for personal integrity and social responsibility. New York: McGraw-

Hill.

Nobes, C.W. and Stadler, C., 2015. The qualitative characteristics of financial

information, and managers’ accounting decisions: evidence from IFRS policy

changes. Accounting and Business Research, 45(5), pp.572-601.

Nordberg, D., 2010. Unfettered agents? The role of ethics in corporate

governance. Corporate governance: A synthesis of theory, research, and practice,

pp.175-191.

Uysal, Ö.Ö., 2010. Business ethics research with an accounting focus: A bibliometric

analysis from 1988 to 2007. Journal of Business Ethics, 93(1), pp.137-160.

Zhang, X.E. and Thiam, M., 2014. Assessing the role of stakeholders in the

implementation of SME‟ s Governance Principles in France. International Journal of

Business and Commerce, 3(5), pp.69-81.