Assignment title: Information
Question 1 [35 marks]
The regulatory environment and financial reporting
You are employed in a large accounting firm which specialises in preparing general
purpose financial reports for large companies that are listed on the Australian Securities
Exchange (ASX). As the training manager, one of your key tasks is to prepare a regular
newsletter for staff involved in the preparation of the above financial reports. The
purpose of the newsletter is to keep staff updated on the latest financial reporting news,
alerting staff of changes and developments that may impact their work, and provide
enough information to staff to satisfy the following:
For staff to understand the nature of the news / change / development and its
potential impact (so staff can decide whether they need to investigate further
given the nature of their own work);
Provide directions to staff of where they can access further information on the
news / change / development if they wish to (including website links where
appropriate).
Required:
Prepare a 2 page newsletter that identifies and summarises changes / developments
and news in the financial reporting environment for the period from 1 December 2016
to 17 March 2017.
Detailed guidelines for completing this task:
1. Identification of changes and developments
This will involve extensive research on a number of sources over the required period.
You will need to identify and consider a range of developments/changes such as:
Technical issues: for example the issue of new accounting standards,
amendments to accounting standards, updates on AASB or IASB projects in
progress, outcomes of AASB or IASB meetings, amendments to ASX listing
rules.
Regulation and monitoring of financial reporting: for example ASIC reviews on
financial reporting.
Political influences or other potential developments. 'Political' does not only
mean action from politicians – it would also include lobbying/actions by other
groups to promote their own interests – for example there may be articles
about companies, or particular interest groups such as Group of 100, saying
that if certain accounting standards are introduced this will disadvantage or
have a negative impact.
You will need to consider both local (Australian) and international sources and
developments.
The restriction of a 2 page newsletter means that you need to use your own judgment
as to whether to include information about specific news items and changes /
developments, and how much information to include. It is not intended that you provide
complete details of changes / developments (although you may consider in particular
cases that more detail is needed).
Given the target audience, it would be assumed that they have a working knowledge of
common terms and abbreviations (such as AASB, IASB), so abbreviations may be
used.
What not to consider?
You need to take care that the news / changes / developments included in the
newsletter are relevant to the objective, in particular that they relate directly to the
preparation of general purpose financial reports for large companies listed on the
Australian Securities Exchange. The newsletter should not consider areas only
indirectly related to the preparation of financial reports such as (this is not an exhaustive
list):
Fraud
Auditing
Taxation
Other disclosures by listed companies such as: industry disclosures required
by peak organisations, and voluntary disclosures in the area of corporate
social responsibility.
2. Potential sources
Given the scope of the potential influences on financial reporting, you will need to
research a range of sources. Below is a list of sources that may be of interest. Note that
this list is not exhaustive, students should search for sources outside of these. Students
should not rely on any one type of source, but a range of sources from each category,
i.e. do not just look at websites, also check journals, newspapers etc. Examples of
possible information sources include:
(a) Websites such as those of:
Australian Accounting Standards Board
Financial Reporting Council
Australian Securities and Investment Commission
Australian Securities Exchange
International Federation of Accountants
Chartered Accountants Australia and New Zealand
CPA Australia
International Accounting Standards Board
Websites of large accounting firms
(b) Professional publications:
In the Black (CPA)
Acuity (CAANZ)
(c) Newspapers/journals
3. Format and presentation
The following are to be observed for your newsletter preparation.
The top of the newsletter must include the title (you need to decide what to call
your newsletter) and details of the period the newsletter is considering.
The newsletter should not read as one continuous 'essay'. It must include
headings and sub-headings that assist in identifying the nature of news /
changes / developments and help to guide the reader, and also enable the
reader to distinguish between items of interest and the relative importance of
changes.
You must refer the reader to specific sources (including website links where
appropriate) so that they are able to obtain more detailed information of the
news / change / development.
The newsletter must be printed in minimum font set at 11 points (You may
wish to use larger fonts etc for headings etc). Apart from minimum font size,
there are no specific requirements in relation to line spacing, margins etc.
However, you should note that simply reducing line spacings or margins to 'fit
more in' may impact on the presentation and effectiveness of the newsletter.
There is no specific 'word limit'. The newsletter must be no longer than 2
pages. In cases where the newsletter exceeds the 2 page limit, only the first 2
pages will be marked.
Do not attach actual articles/printouts of web sources etc to your assessment.
You are only required to include details of these in the bibliography (see
section 4 below).
Don't be afraid to be creative. The effectiveness of a newsletter is impacted by how
interesting the readers find it.
4. Bibliography and referencing
This assessment must include a bibliography rather than a reference list (this should not
be part of your newsletter and is to be given on a separate page). A bibliography
includes all materials used/read in the preparation of your assignment, not just those
referenced or cited within the paper. The reason a bibliography is required (rather than
a reference list) is that this will provide an insight into the range of your research
activities which is part of the criteria for assessment. It is expected that the bibliography
will be quite long. The bibliography needs to include specific articles or readings that
you have actually accessed - not just a general link to a website or newspaper etc.
Therefore if you use a source such as the AASB website, please reference every article
that you have read separately. You should only include sources that are related to the
area. For example, if you look at a particular publication but most of the content relates
to taxation or auditing issues, it would not be appropriate to include these articles in
your bibliography as these are not directly related to the area of interest.
Newsletters without a bibliography may not be accepted or marked.
When citing electronic sources, please also include the date accessed. If you are
unsure how to cite and reference your readings, check the APA referencing guide
here: APA referencing guide.
Please be reminded that plagiarism is regarded as a serious issue within the University
system with severe consequences for students who have been found to have
deliberately plagiarised, the minimum penalty being zero for the assignment. All
students should ensure that they are familiar with the plagiarism policy and referencing
requirements before commencing assessment tasks.
Question 2 [15 marks]
Financial statement presentation
You are the senior financial accountant at Kool Klothes Ltd. One of the new trainee
accountants has prepared the following statement of financial position as at 30 June
2016, after its first year of operations:
Kool Klothes Ltd
Statement of financial position as at 30 June 2016
$000
Assets
Cash at bank 84
Receivables and inventory 190
Raw materials 12
Work in progress 24
Prepaid insurance 13
Shares in listed companies (at cost) 40
Advertising costs 16
Property, plant, equipment and intangible assets 328
Motor vehicles 185
Patents 40
Cash management account 60
Total asets 992
Liabilities
Accounts payable and provision for warranty 80
Allowance for doubtful debts 5
Accumulated depreciation - property, plant and equipment 48
Borrowings 120
Debentures 80
Current and deferred tax liabilities 36
Provision for annual leave 18
Retained earnings 90
Dividend payable 25
Total liabilities 502
Net assets 1 494
Equity
Share capital - ordinary shares 490
Total equity 1 004
Additional information:
Where AASB 101 requires entities to disclose further sub-classifications of the minimum
line items either on the face of the statement or in the notes, the directors of Kool
Klothes Ltd have advised you that they wish to disclose these sub-classifications in the
notes and only report the minimum line items on the face of the statement.
Required:
Review the statement of financial position prepared by the trainee accountant. Discuss
what corrections / changes need to be made to the statement of financial position, to
ensure that it complies with the requirements of AASB 101. Provide references to
relevant paragraphs in the accounting standards where appropriate to support your
answers. Note: You are not required to discuss any note disclosures that are needed,
or prepare a revised statement of financial position.
Question 2 Allocated marks
Discuss corrections / changes needed 12
References 3
Total 15
Rationale
The purpose of this task is to help you further develop some of the skills and knowledge
required and valued by the accountancy profession. The task that you will be required to
undertake is similar to the tasks required of a professional accountant working within the
financial reporting field. Accounting professionals need to ensure they are aware of
current developments and that their knowledge is up to date. They need to be able to
identify changes that have occurred that may impact on their work and to know where
they can obtain information about these changes.
In this assignment you are asked to provide a summary of recent developments relating
to financial reporting. As such this assignment allows you to:
develop the ability to identify and source changes to accounting/reporting
requirements so as to update professional knowledge required for practice;
acquire an awareness of current developments and changes (both locally and
internationally) that may impact on current and future accounting and reporting
rules and regulations;
develop the ability to provide written material appropriate to the accountancy
profession;
appreciate the limitations of the currency of knowledge in a technical financial
reporting area.
This assignment will assess your ability to:
prepare basic financial statements for reporting entities; and
discuss critically and comprehensively changes and developments in the
statutory and professional requirements upon which published financial
statements are based.
Marking criteria
You will be assessed on the following:
QUESTION 1: Newsletter (35 marks)
The newsletter will be assessed in relation to the criteria specified in the following
marking guide:
Criteria High Distinction Distinction Credit Pass
Research
current
statutory and
professional
sources for
current
development
s and
changes in
the financial
reporting
environment
relevant to
large ASX-
listed
companies.
Report
findings by
categorising
the
information in
order of
importance,
and providing
focussed
attention to
major news
items. [65%]
The newsletter
correctly identifies
and reports on an
impressive range
of local and
international
changes/develop
ments in the
financial reporting
environment.
All news items
reported are
directly relevant to
financial reporting
for large ASX-
listed companies.
The newsletter
clearly
differentiates
between
significant and
minor news items.
Appropriate detail
is provided for all
news items, with
an emphasis on
key aspects of
major changes
and
developments.
The newsletter
correctly identifies
and reports on a
large range of
local and
international
changes/develop
ments in the
financial reporting
environment.
Almost all of the
news items
reported are
directly relevant to
financial reporting
for large ASX-
listed companies.
The newsletter
clearly
differentiates
between
significant and
minor news items
in most instances.
Appropriate detail
is provided for
almost all news
items, with an
emphasis on key
aspects of major
changes and
developments.
The newsletter
correctly identifies
and reports on a
good range of
local and
international
changes/develop
ments in the
financial reporting
environment.
Many of the news
items reported are
directly relevant to
financial reporting
for large ASX-
listed companies.
The newsletter
provides some
differentiation
between
significant and
minor news items.
Appropriate detail
is provided for
most news items.
The newsletter
correctly identifies
and reports on a
satisfactory range
of local and
international
changes/develop
ments in the
financial reporting
environment.
Most of the news
items reported are
directly relevant to
financial reporting
for large ASX-
listed companies.
The newsletter
provides limited
differentiation
between
significant and
minor news items.
Appropriate detail
is provided for
some news items.
Provide
directions to
readers to
access
further
information.
[5%]
All news items
provide details of
where audience
members can
access further
information,
including website
links where
appropriate.
Almost all news
items provide
details of where
audience
members can
access further
information,
including website
links where
Most news items
provide details of
where audience
members can
access further
information,
including website
links where
appropriate.
Some news items
provide details of
where audience
members can
access further
information,
including website
links where
appropriate.
appropriate.
Prepare
bibliography
of relevant
information,
presented in
accordance
with the APA
referencing
system.
[10%]
A very impressive
range of highly
relevant local and
international
sources listed in
bibliography.
Bibliography
prepared
according to the
APA referencing
system without
flaw.
An impressive
range of highly
relevant local and
international
sources listed in
bibliography.
Bibiliography
prepared
according to the
APA referencing
system, with
minor flaw.
A broad range of
relevant local and
international
sources listed in
bibliography.
Bibliography
prepared
according to the
APA referencing
system, with
some errors.
A limited range of
sources listed in
bibliography.
Bibliography
prepared
according to the
APA referencing
system, with a
number of errors.
Publish
written
material
appropriate
to the
accountancy
profession. [2
0%]
The design of the
newsletter is
highly creative
and it is
structured
exceptionally well.
Titles and
headings attract
attention and are
highly informative.
The writing style
is succinct,
cohesive, easy to
read and it is
grammatically
correct with
accurate use of
syntax, spelling
and punctuation.
The design of the
newsletter is
creative and it is
very well
structured.
Titles and
headings attract
attention and are
informative.
The writing style
is clear and
succinct, easy to
read and it is
grammatically
correct with
accurate use of
syntax, spelling
and punctuation.
The design of the
newsletter is
simplistic but
effective, and it is
well structured.
Titles and
headings attract
some attention
and are
informative in
most cases.
The writing style
is appropriate and
easy to read most
of the time, with
mostly accurate
use of syntax,
spelling and
punctuation.
The design and
structure of the
newsletter is
simplistic but
effective.
Titles and
headings attract
some attention,
however could be
more informative.
The writing style
is appropriate and
easy to read most
of the time, with
mostly accurate
syntax, spelling
and punctuation.
QUESTION 2: Preparation of Financial Statements (15 marks)
Criteria High
Distinction
Distinction Credit Pass
Prepare financial
statements in
accordance with the
accounting
Demonstrates a
comprehensive
understanding of
the presentation
Demonstrates a
thorough
understanding
of the
Demonstrates a
good
understanding of
the presentation
Demonstrates a
satisfactory
standards. requirements in
AASB 101
Presentation of
Financial
Statements and
the ability to
apply these
requirements to
a range of
practical
situations,
without flaw.
Applies the
definition and
recognition
criteria for
assets, liabilities,
income,
expenses and
equity in the
Conceptual
Framework to
the preparation
of financial
reports for
reporting
entities, without
flaw.
Where required,
workings,
explanations
and references
are provided,
and are accurate
and complete.
presentation
requirements in
AASB 101
Presentation of
Financial
Statements and
the ability to
apply these
requirements to
a range of
practical
situations, with
minor flaw.
Applies the
definition and
recognition
criteria for
assets,
liabilities,
income,
expenses and
equity in the
Conceptual
Framework to
the preparation
of financial
reports for
reporting
entities, with
minor flaw.
Where
required,
workings,
explanations
and references
are provided,
and are mostly
accurate and
complete.
requirements in
AASB 101
Presentation of
Financial
Statements and
the ability to
apply these
requirements to
a range of
practical
situations, with a
number of minor
errors.
Applies the
definition and
recognition
criteria for
assets, liabilities,
income,
expenses and
equity in the
Conceptual
Framework to
the preparation
of financial
reports for
reporting
entities, with a
number of minor
errors.
Where required,
workings,
explanations
and references
are mostly
provided, and
are accurate.
understanding of
the presentation
requirements in
AASB 101
Presentation of
Financial
Statements and
the ability to
apply these
requirements to
a range of
practical
situations, with a
number of
errors.
Applies the
definition and
recognition
criteria for
assets, liabilities,
income,
expenses and
equity in the
Conceptual
Framework to
the preparation
of financial
reports for
reporting
entities, with a
number of
errors.
Where required,
workings,
explanations
and references
are partially