Assessment Type: Written Report – individual assessment
Purpose: This assessment is designed to reinforce the subject content and develop students’ skills and application of knowledge of the subject content to business situations. This assessment relates to learning outcomes a, b and c.
Topic: This assignment covers contemporary theoretical concepts with practical accounting task application based on the topics from the subject.
Task Details: This assignment requires students to access the Conceptual Framework of Accounting and select the conceptual framework tab. Students are then required to access paragraph 2.4 fundamental qualitative characteristics.
Presentation: Report – 1,500 word report. The word count excludes the cover sheet, contents page, references, appendices, and illustrations (e.g. diagrams, graphs and tables). Students need to stay within
the assigned word limits, and indicate the word count on the cover page of the assignment. The report should be typed double spaced, using Times New Roman font size of either 10 point or 12 point. Every page should be clearly numbered.
The assignment should include the following parts:
The report is related to the framework of financial statement reporting and presentation based on the accounting concepts and accounting policies. The report relates to the requirements of GPFR in the financial statements and benefits from the GPFR. There are certain rules and regulations for the financial statement which the company needs to follow and also specify the statements that are required to be presented by public listed companies such as a statement of the balance sheet, income statement, cash flow statement, and change in equity, etc.
Overview of the report:
The report is providing a descriptive intro of GPFR which is described for the presentation and preparation of the financial performance of the company. As per GPFR, the companies are required to fulfill certain fundamental qualities and characteristics while preparing the financial statement based on the risk reporting requirement by the corporations and for effective information of the company's financial position. The report also describes the risk involved in the operations of West Gold resource-limited and the role of other sources of information for the risk analysis of the company such as press, media, online websites, financial markets and sites, stock exchange, etc (Bandara, & Falta, 2019).
Qualitative characteristics of GPFR:
The GPFR framework has described certain qualitative characteristics that are required in financial reporting for effective information and true and fair presentation. The true and fair presentation refers that the reporting should contain correct information that defines the actual financial position of the company. The information presented through financial statements should be reliable, relevant, understandable, comparable, and available on time which retains the importance of information. The financial information is required for decision-making by the investors and outsiders of the company. Therefore the information should be true and fair along with per understanding of users (Mattei, Jorge, & Grandis, 2020).
The Qualitative characteristics of GPFR are as follows:
The information should be reported on time which makes the information important and useful for the users such as the financial results of the company should be available on the quarter ending, half-year ending and year ending denoting the profit and financial performance of the company relating to that period. The information should be disclosed by the company to users on time as timelines improve the quality and effectiveness of the information for the users (Migisha, et al.2018).
The information should be related to the company and enhance users' capability in taking decisions and achieve the objective of financial reporting. The financial performance should be presented effectively through the statements prepared by the company. The economic conditions and profitability of the company which helps the users in decision making are presented in financial statements.
The financial statement should be prepared by the companies presenting the comparative statement of the previous year's financial position and the current year's position along with the following year's financial planning. The comparative statements help the users in understanding the change in accounting policies and change in the account balances through ratio analysis and the relation of account balances such as net profit margin, current assets ratios, etc. The information in form of comparison helps in assessing that the company has a consistent accounting approach and policies (Heidt, et al. 2020).
The GPFR has major qualitative characteristics in the understanding of financial performance to the users of financial statements. The investors and stakeholders are the major users of the financial statements and the information provided in reports should be clear and in simple language understandable to users.
Reporting of risk in the financial report of the West Gold resource-limited
There are various stakeholders and statutory requirements to report the risk that is faced or that are probably faced by the company shortly. In the following study of west gold, a resource-limited analysis of the financial report of west coast resource-limited is made to assess the risk that is reported in the financial report. The company chosen is a leading company in the mining industry of the company. The company is a job creator for the country and a high-end value company. Thus the risk associated with the company impacts various types of stakeholders in the country and community. It is required for the company to report the risk of the company to the stakeholders in the financial report and through the proper chain of communication. Below is some of the risk of the company to be reported to the stakeholders as per the various requirements of the company (Knechel,, & Salterio, 2016).
1. Risk of operations – The operations are the main working part of the company and the going concern assumption of the company is successful when the operations of the company are going good in the said case the company is involved in the mining industry and mining is a very difficult industry for working. Thus the operational risk is required to be evaluated and reported by the company in its financial report. The operations in the mining field and the exploration risk and the other research-related expenses. In the financial report of the west gold resource-limited, the operational risk of the company is included (Maroun, 2017).
2. Financial risk and future prospective risk – The Company in its financial report should include the financial risk and the future outcome of the company's working. In the director's report of the company. The company should include leveraging risk and financial risk in the financial report. The future of the west gold resource-limited is included in the financial report of the company. The risk of finance and leveraging is a major risk for the shareholders and lenders of the company thus it should be considered in the financial report (Ji, et al. 2018).
3. Audit risk – The auditor of the company needs to specify the audit risk that is inherent in the audit process and the audit report of the company. The reliability and the use of financial information are depending on the audit of the company. Thus reporting of the audit risk is a statutory liability by the company.
Following media can be used by the company to report the risk of the company –
1. Financial report –
The financial report is created with addressing to the shareholders, thus the company should report all the risk associated with the company to the shareholders in the financial report. The financial report includes all the risks of the company.
2. Press release by the company –
The financial report of the company is issued yearly; between the dates of the financial report of the company uses the press release option to report the risk of the company. According to various statutory requirements the instant information and risk should be reported by the organization and in some of the statutory requirements reporting of risk in the print media is necessary thus the risk can be reported with a press release (Simnett, et al. 2016).
3. Submission to various bodies –
The risk of the organization is required to be reported in some of the statutory obligations to the various government departments. Thus, the risk of the corporation is recorded and reported to the organizations as per their statutory requirements. The government departments that required for the risk to be reported includes the corporate registrar, the stock exchanges of the country, and the other regulators of the industry.
4. Social Networking –
The company can report its risk apart from the financial report to the shareholders on their social media accounts. It is the emerging methods of sharing the risk and reporting of the risk to the stakeholders of the company (Simnett, Zhou, & Hoang, 2016).
The above discussion of the qualitative characteristics and the other relevant factors shows the importance of the qualitative characteristics in the financial statements. The quantitative part of the financial information of the company but the qualitative characteristics will provide meaning and relevance of those qualitative data that can be used by the users of the financial report. The report should also include the risks relevant to the organization in the financial statement it will do because of the relevance of the financial report and some of the statutory requirements.