ACC29083: THEORY OF ACCOUNTING
Assessment details for ALL students
Assessment item 1 — Group / Individual Case Study
Due date: / Tuesday of Week 7 / ASSESSMENTWeighting:
Length: / 30%
2500 - 3000 words / 1
Objectives
The objectives of your assignment are:
To develop your critical analytical skills and written communication to a point that you have demonstrated you can communicate and argue a case from an accounting theory perspective.
This assignment requires a substantial search of the accounting theory literature and contemporary developments on global accounting regulation. You will need to use the resources of the various databases and your text to successfully undertake this work. Extensive reading is highly desirable.
Case Study: Integrated Corporate Reporting – a new form of reporting corporate performance.
In recent years, the terms “sustainability’ and “corporate social responsibility” (CSR) have become commonplace. There has been growing awareness of the impact of corporate behaviour, not just on shareholders, but on other stakeholders. As the importance of sustainability increases, initiatives such as the International Integrated Reporting Committee (IIRC)’s Integrated Reporting Framework, United Nations Global Compact and Principles for Responsible Investment, the International Finance Corporation’s (IFC) Performance Standards, and the Global Reporting Initiative (GRI) dictate that developing an integrated/comprehensive and ongoing reporting and disclosure program with stakeholders is a necessary business deliverable. To this end, in August 2010, the Prince of Wales’ Accounting for Sustainability Project and GRI announced the formation of International Integrated Reporting Committee (IIRC). The aim is to help with the development of more comprehensive and comprehensible information about organisations, prospective as well as retrospective, to meet the needs of the emerging, more sustainable, global economy. The objective of IIRCC is to create a globally accepted integrated reporting framework which brings together financial, environmental, social and governance information in a clear, concise, consistent and comparable format (Rankin et al 2012).
Integrated Reporting (IR) is about integrating material financial and non-financial information (which includes social and environmental and other value relevant information) to assist investors and other stakeholders to understand how an organisation is really performing. An integrated report focuses beyond the traditional time frame and scope of the current financial report by addressing the wider as well as longer-term consequences of decisions and actions and by making clear the link between financial and non-financial value (KPMG 2012). It also attempts to demonstrate the link between an organisation's strategy, governance and business model. In essence, integrated reporting brings together material information about a firm’s operating environment, business strategy, governance and financial & non-financial performance in one report.
Some regulatory and professional bodies are also making integrated reporting part of their agenda. For example, Australian Securities and Investment Commission (ASIC) in Australia came out supporting integrated reporting and standards in 2013. Then in early 2014, the chief executive of CPA Australia remarked, “the release of integrated reporting framework marks a new era in the way companies report on their performance. Integrated Reporting is the way of the future when it comes to reporting on company performance. By looking beyond purely financial measures and accounting for social and environmental performance as well, it can be a key component in a company’s armory of best practice corporate governance and disclosure,”
Required:
You are the Chief Financial Officer (CFO) of a newly listed Australian company, OZGOLD Limited. OZGOLD is a manufacturer of industrial hardware components requiring heavy metals and minerals as the key raw materials. The manufacturing process is labour and fuel and water intensive and the manufacturing facilities are mainly located in developing countries. Your Chief Executive Officer happened to read the following appended articles in press: (1) “Integrated reporting radar”; (2) Are we heading to Integrated reporting in Australia?; (3) “CPA Australia welcomes new Integrated Reporting Framework”. She wonders whether OZGOLD should also be more proactive with respect to integrated reporting and disclosures. Your CEO asked you to write up a report, analysing the key issues in adopting Integrated Reporting (IR).
In your report, you should address the following questions:
1. Explain the meaning of sustainability and discuss why corporations might consider it in their business operations. (4 marks)
2. What are some of the drivers behind various global initiatives on Integrated Reporting (IR) and how will such initiatives affect corporate reporting in general? (6 marks)
3. Why should Integrated Reporting (IR) interest shareholders and other external parties?
(4 marks)
4. The case above indicates that OZGOLD’s, “The manufacturing process is labour and fuel and water intensive”. Explain the role accountants can play in addressing environmental issues in a business environment. (5 marks)
5. Are there any benefits to OZGOLD if integrated reporting is adopted? What are some of the major obstacles and costs associated with the development of Integrated Reporting (IR) in OZGOLD? Would you recommend Integrated Reporting (IR) for OZGOLD? Why? (8 marks)
Case study continued
Research (a minimum of 3 academic journals) (2 marks)
Presentation (Grammar and referencing) (1 marks)
Total (30 Marks)
Appended articles to the case
Article 1
http://www.afr.com/f/free/markets/capital/cfo/integrated_reporting_on_asic_radar_COZkHR5sOOsdsRiXWu9hPL
Integrated reporting on ASIC’s radar
PUBLISHED: 02 Apr 2012 14:00:00 | UPDATED: 02 Apr 2012 17:42:31PRINT EDITION: 02 Apr 2012
Reprints & permissions
ASIC chairman Greg Medcraft says integrated reporting will reshape the audit profession. Photo: Rob Homer
Sally Rose
Yes, integrated reporting has been on the Australian Securities and Investments Commission’s radar screen, chairman Greg Medcraft said in response to a question from
Appended article 1 (contd.)
L’Estrange Counsel and Advisors’ chairman Tim L’Estrange at the Financial Review legal conference in Sydney on Friday.
Recounting his experience the previous day at a Centre for Corporate Law & Securities Regulation seminar in Melbourne, L’Estrange said: “Professor Mervyn King – a South African judge who chairs the Global Reporting Initiative – had been very passionately describing the documents most companies produce as archaic, backward-looking, not helpful to shareholders . . . and quite often not read.”
Medcraft said sustainability reporting “is encompassed at the moment in the governance guidelines of the ASX but it’s really more of an optional thing presently”.
The ASIC chair went on to speak with reference to a general concept of “including environmental and sustainability information in company reports” rather than speaking to the GRI or International Integrated Reporting Council (IIRC) guidelines specifically.
“I do think that it is relevant because I think what we see is that investors do want to see more than just the financial information. They really do want to see what [a company’s] approach is to the environment and to sustainability,” said Medcraft.
“Frankly, I think that it’s a great move forward and it’s certainly something that [ASIC] have supported”.
“Sustainability is key to a business if you think about it, so [ASIC] are supportive and we’ve expressed that support in various forms, particularly to the audit profession. I think it’s quite an interesting challenge, if it does emerge, for the auditing profession in terms of what it means for the skills that they have.”
RELATED STORY: Medcraft backs integrated reporting
Article 2
https://www.charteredaccountants.com.au/secure/myCommunity/blogs/gmagarey/sustainability-and-regional-issues-blogs/462/are-we-heading-to-integrated-reporting-in-australia
posted 13/02/2014 10:18:39 AM by Geraldine Magarey- Views:[1400]
Are we heading to Integrated reporting in Australia?
The release of the International Integrated Reporting Council’s integrated reporting (IR) framework recently was a critical step towards global acceptance of the value of non-financial reporting.
The framework is currently being trialed in over 25 countries, 16 of which are members of the G20, the group of nations focused on strengthening the global economy. It is hoped that the framework will be used to accelerate the adoption of IR across the world.
Crossing paths with IR has been the release by ASIC of Regulatory Guide 247 Effective disclosure in an operating and financial review (RG 247). RG 247 was released in March 2013 with the goal of assisting directors of listed entities in providing useful and meaningful analysis and information in the OFR.
The OFR forms part of the annual report and complements the financial report by providing information on the entity’s operations, financial position and business strategies and prospects for future financial years.
ASIC has stated that ‘the OFR should provide underlying drivers of the financial performance and position of entities, including relevant analysis at a segment level. The OFR should also explain the business model and strategies of the entity, and how business strategies are expected to impact on future financial performance’.
Sounding like IR to you? There are similarities and it will be interesting whether the move to improve the OFR will provide Australian companies with the impetus to implement IR. Will it be the tipping point?
tags : ASIC, integrated reporting, IIRC
Article 3
CPA Australia welcomes new Integrated Reporting Framework http://www.cpaaustralia.com.au/media/integrated-reporting-framework
The finalisation and release of a new Integrated Reporting Framework will herald a new era in the way companies report on their performance, CPA Australia chief executive, Alex Malley, said today.
Speaking from London where he has been working with fellow members of the International Integrated Reporting Council (IIRC) on the new framework, Mr Malley said Integrated Reporting was an important way companies could satisfy the growing demands of investors for information about performance beyond the bottom line.
“Integrated Reporting is the way of the future when it comes to reporting on company performance. By looking beyond purely financial measures and accounting for social and environmental performance as well, it can be a key component in a company’s armory of best practice corporate governance and disclosure.
“This new framework follows an extensive, international consultation and provides a clear roadmap for companies to begin taking a more transparent and holistic approach to the way they measure and report on performance.”
Mr Malley said a recent report produced by CPA Australia in collaboration with the Global Reporting Initiative (GRI), found that while uptake on Integrated Reporting in Australia is relatively low, compared with companies in the United Kingdom and Hong Kong, Australian companies disclose most on the environment.
“However our report also showed that British companies produce more diverse sustainability information and spread this information across more global reporting indicators than companies in other jurisdictions.
“So while we are seeing a trend towards this new era of corporate reporting, it is clear that we still have a way to go and it is my hope that this new framework can add strength to the arm of those organisations in Australia and around the world planning to make the leap into a new era of transparency.
“As with any innovation of this kind, there will doubtless be some complexities that individual organisations will have to work through in order to apply this new approach to corporate reporting, however the framework provides an excellent starting point for comprehensive take-up over time.”
Appended article 3 (contd.)
The IIRC is a global coalition of regulators, investors, companies, standard setters, the accounting profession and NGOs. Alex Malley was appointed to the IIRC in 2012 and was the Council’s first Australian member. The Council’s role, as a forum for senior representatives of the IIRC’s member organisations, is to:
· Advise on the IIRC’s mission, role and governance practices.
· Provide thought leadership, intellectual contribution and strategic insights relating to IIRC initiatives and activities.
· Lend weight and credibility to the IIRC’s profile.
Media contact
Ben Pratt
P: 0419 968 734 begin_of_the_skype_highlighting0419 968 734FREEend_of_the_skype_highlighting
Important points for assessment:
· You are required to demonstrate scholarly discussion, critical analytical skill, some courage to take a stand, and express your position on the issues. You should be able to understand the questions and answer them with precision.
· You may use the CQU library for the case study.
· Academic as well as professional journal articles may be relevant for the case studies. Academic journal articles are generally approximately 4500 words in length and always include references.
· You may use your text to provide additional information not covered in your articles which you believe is important. However, most of your material should come from other sources.
· The best databases for finding relevant articles are: EBSCOHOST, Infotrac and Emerald.
· The assignment should be prepared in a case analysis format. Answer the specific questions. Do NOT write an essay. This is an individual case study. You are free to discuss the case with your fellow students. But your answers and writing style must be different from those of others. Do not share your submission with others. Otherwise you may be accused of plagiarism.
· You may also wish to seek assistance from the Communications Learning Centre or Learning Skills Unit for additional assistance on how to research and write your assignment.
Regular access to the course website is a requirement of this course. Additional information regarding this course may be placed on the course website. This information may include, but is not limited to, assignment guidance and exam preparation.
Referencing
· You must use both in-text referencing (e.g., author surname, year of publication, page no. if applicable) throughout this assignment and a reference list at the end of the paper. Refer to the Guide for students for referencing style.
· The assignment should be prepared using 12 point font and 1.5 line spacing.
Assessment criteria
Assessment of the case study will be based on the criteria listed below and your submission should include the following:
· A title page with the title of the case and your details.
· A brief abstract or summary (maximum 200 words).
· Preamble/introduction - how you see the case and how you have approached the case study.
· Branching out to existing literature – other resources you have used to analyse the issues in the case and collect empirical evidence in support of your answers/views. References to be provided in the text and a reference list included at the end.