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ACC3005 The Accounting Research Project

Solution:

Accounting Research Project

Introduction

Accounting practices refer to the managerial activities by which the management of an organization tactfully perform to identify, collect and analyse its potential kind of financial transactions so that corrective strategy might be implemented to meet defined objective effectively (Agrawal, 2018). This research is based on further expansion of assignment 2 as well as assignment 3 and this study helps in understanding how 10 ASX listed firms are executing their accounting practices for getting sustainable development. With the help of the innovative assignment, the annual reports and financials indicators of the selected 10 ASX (Australian Stock Exchange) companies have been evaluated and these have been further analysed to conclude the work effectively.

Analysis of the Accounting Practices of 10 ASX Listed Companies

According to Ahinful, et al., (2017), the management of an organization is required to identify different kinds of accounting practices that make it efficient in communicating its competitiveness to its potential stakeholders so that corrective actions might be taken to improve performance. In order to understand the potential kind of accounting issues and practices available within the operational framework of the selected 10 ASX listed companies, their respective annual reports have been evaluated as follows-

Schaffer Corporation Limited

Schaffer Corporation Limited is a leading automobile-oriented leather producing company in Australia and it has been incorporating a positive brand image in the global market with its fair and customer-centric accounting practices. Owing to the annual report of this firm, it is found that it has strategically discussed how many portions of its annual budget it invested to minimize the emission of carbon which is probable during its operational activities (ASX, 2022). It means that the business head of Schaffer is successful in communicating to its potential stakeholders what initiatives it is taking to make the surrounding environment and surroundings pollution less (Schaffer, 2022).

Bellamy’s Australia Limited

The ASX listed company is a leading beverage and food-producing as well as the retailing company of Australia and it has been found efficient in incorporating an environment-friendly brand image within the perspective of its potential customers using competitive accounting practices. On the evaluation of the current annual report of the ASX listed firm, it has been found that its management has detailed its initiative towards the betterment of farmers and this has detailed how it is deliberately compromising its profit margin for upgrading their lifestyle by providing higher margin (Annual Report, 2022). In short, the business head of the ASX listed company has tactfully shown ethics in declaring its financials whether that is related to debt, equity, liabilities and assets and these might bring a positive impact on its brand image in the long run (Ameen, et al., 2018).

BHP Group limited

BHP group limited operates its operations as a mining company and it is engaged in several activities that are development, exploration, production, processing of the iron ore, copper and metallurgical coals etc. BHP group limited is the ASX listed company which has a market capital of 243.5 billion in 2022 (ASX, 2022). From the annual report of the firm, it is found that in FY2021 there are no accidents records across the global operations. On the other hand, it is observed that this company investment in technologies and green energy alternatives to reduce pollution and the negative impact on the environment (BHP, 2022).

Wesfarmers limited

Wesfarmers Limited is known as one of the popular Australian conglomerate companies which have been headquartered in Western Australia. This ASX listed company operates its business operation in New Zealand and other domestic markets in Australian. Wesfarmers Limited is operating in retail, safety and industrial goods, chemical and fertiliser. In order to prepare the financial report of this ASX listed company, the accounting department uses the AASB and the IFRS standard. On the other hand, the company also includes a non-IFRS standard that helps to measure and compare the sustainable practices of other companies (Wesfarmers, 2022). From the annual report, it is not clearly observed how many capital assets is invested in maintaining the social responsivities and reducing the pollution.

Rio Tinto Group

Rio Tinto Group is the Anglo Australian multination mining company that is listed in the ASX (Rio Tinto, 2022). The accounting practices of the Rio Tinto group includes the activities of recording the business transaction. There are several tools likecash receipts journals, disbursement journals, purchases and sales journals that allows the accounting department of the entity to record the accounting transactions like investment, purchase, sales etc. From the annual report, it is found that with the help of these journals the accounting department creates the balance sheet, income and cash flow statement. It is also found that the business head of Rio Tinto also communicates with the potential stakeholders to implement effective sustainable initiatives to reduce Greenhouse gas emissions, carbon emissions etc. (Rio Tinto, 2022).

Woolworth

Woolworth Supermarket Company is one of the popular chains of grocery stores and grocery stores. This ASX listed company is considered as the biggest supermarket chain in Australia, which attained 33% market share. From the annual report, it has been found that the company sets its sights on the long term horizons by including the goals of 2030, 2050 and the science-based target initiatives. This ASX listed company will take initiatives to reduce 63% carbon emission from the business operations and 19% from the supply chain of the company at the end of 2030 (Woolworth, 2022). These are the major issues related to CSR where the firm is putting high focus to secure effective and operating with feasibility.

Coles group limited

Coles group limited is an Australian public corporation that is operating several retail chains in the domestic market. The management of this ASX listed company is primarily focused on selling foods and groceries by its flagship. From the annual report of the Coles group limited, it has been found that the company has attained $3846.4 million in revenue in 2019 (Coles Group, 2022). On the other hand, the potential kind of accounting issue related to the CSR and the sustainability which is noticed within the respective practice of the ASX listed firm is that it has not detailed on what basis, it is planning to provide a higher profit margin from its stakeholders (Coles Group, 2022). Owing to these kinds of issues, it becomes essential for the firm to reform its accounting practices concerning the global accounting standards. That will surely enhance accountability and remove errors over its presentation of accounting information.  

Newcrest Mining Limited

The Newcrest mining limited is a mining corporation that includes the activities of development, exploration, mining and sales of gold-copper concentrate and gold. This ASX listed company includes the accounting policies which is associated with the AASB financial standards. The accounting policies are AASB 16 Leases and the AASB 17 leases, these are the single agreement accounting model that allows the accounting department to recognise the liabilities and assets for all the leases (Newcrest Mining, 2022). Apart from that this accounting practice of the leases allows the accounting department to realise the optimal usage of assets and underlying financial instruments and it is necessary for the firm to get an idea about its investment or funding potential. Overall these accounting practices allow recording the business transaction owing to its sustainable development and the CSR related spending and help the management to operate its daily activities with valid care.

Amcor

Amcor plc is the global packaging association which is one of the popular global packaging companies. This association supports the subsidiary companies to produce rigid containers, flexible packaging and specially cartons, services and products etc. From the annual report, the operational management and management has spent a large number of financial assets on sustainable packaging (Amcor, 2022). That reflects its approach towards managing sustainability over its accounting practices which is an ideal way to promote business feasibility to operate at any business level.          

Trans-urban company

Trans-urban company is the road operators association which is listed in ASX, this association develops and manages the urban toll road network in Australian (Transurban Group, 2022). From the annual report, it has been found that the management invested $50 million on the technologies to reduce greenhouse gas emissions while increasing road efficiency and operating the business operations (Transurban Group, 2022).

Findings and Analysis

Thematic data analysis is defined as a distinctive process that helps to evaluate and analyse the qualitative data for accomplishing research. In the thematic analysis, the information is evaluated by including three aspects that are extract, code and theme.

ExtractCode
The management of an organization is required to identify different kinds of accounting practices that make it inefficient in communicating its competitiveness to its potential stakeholdersThe organisational management recognises the best option from the accounting practices to communicate with the stakeholders regarding the business operations
ASX listed companies invest in the technologies and green energy alternatives to reduce the pollution and the negative impact on the environmentASX listed companies solely concentrate on developing the initiatives to reduce pollution and the negative impact on the environment
Business heads of these ASX listed companies communicate with the potential stakeholders to implement effective sustainable initiatives to reduce Greenhouse gas emissions, carbon emissions etc.ASX listed companies communicate with the potential external and the internal stakeholders to maintain the CSR
CodeTheme
The organisational management recognises the best option from the accounting practices to communicate with the stakeholders regarding the business operationsBy including the accounting practices, the manager communicates with the potential stakeholders
ASX listed companies solely concentrate on developing the initiatives to reduce pollution and the negative impact on the environmentManagement take initiatives to reduce the negative impact on the environment
ASX listed companies communicate with the potential external and the internal stakeholders to maintain the CSRManagement of ASX Company’s list focuses on maintaining the CSR and communication with stakeholders  

Theme 1: By including the accounting practices, the manager communicates with the potential stakeholders

From the secondary data, it is found that the management of the companies who are listed in the ASX includes the IFRS and AASB financial standards to create the financial reports. That supports the management to provide significant information regarding the values, culture, CSR, sustainable initiatives etc. Apart from it, the administration of the ASX listed entities is tactfully detailed which kind of regulation of AASB it has deployed to evaluate and compile its financial transactions so that its internal and external stakeholders might be understood what principles it is following in its accounting practices (Ajeigbe, et al., 2021). Besides this, the accounting issue which is identified from the annual report of the ASX listed companies like Newcrest, Amcor, Coles etc. is that it is unable to detail how much money is contributed or planning to invest for the betterment of society and the environment. In short, the lack of information disclosure related accounting issues is identified within the accounting practice of the ASX listed firms and this might create a negative image in the perspective of its potential stakeholders. 

Theme 2: Management take initiatives to reduce the negative impact on the environment

By evaluating the annual reports of the 10 ASX listed companies it is observed that the business heads develop effective goals to reduce the pollution and the negative impact on the environment. From the annual reports, it has been found that most of the companies take 2030, 2050 goals by relying on climate change. Apart from that the mining companies like Newcrest in the ASX list, invested a large amount in the technologies to reduce carbon emission while exploration and decrease the emission of greenhouse gases. Overall, it reflects that accounting practices by including the IFRS and AASB help to maintain the environment safety policies and the CSR in the business.   

Theme 3: Management of ASX Company’s list focus on maintaining the CSR and communication with stakeholders

By using the accounting standards and principles, the Australian companies prepare a clear financial statement which helps to provide effective information regarding the investment, turnover and sustainable practices. The outcome of the lack of future planning related accounting issues related to the CSR and the sustainability of the Australian might create an obstacle for its internal and external stakeholders in deciding whether it will make a profitable business in future or not. It means that the management or business head of the food manufacturing company has been marginally failed in showing ethics in terms of detailing its future profit-making business plan and this might impact its growth adversely.

Conclusion

It is concluded that the accounting practices of businesses are associated with CSR as the accounting department have the responsibility to measure disclose and assure the information of CSR. The study also found that ASX listed firms are including effective CSR policies and sustainability initiatives to remove the ethical issues and reduce the negative impact on the environment. In addition to that global accounting standards are also taking place amongst all of these firms in terms of presenting its financial transactions within a financial year. That enhanced accountability and feasibility of its accounting practices which is effective to attract foreign investors easily.     

References

Agrawal, R. K., 2018. Principle of Management Accounting. London: Educreation Publishing.

Ahinful, G., Addo, S., Boateng, F. & Danquah, J., 2017. Accounting Ethics and the professional Accountant: the case of Ghana. Available at SSRN, 12(1), pp. 22-29; DOI : 10.2139/ssrn.3009253.

Ajeigbe, K. B., Swanepoel, T. & van Vuuren, H. J., 2021. Firm’s value sustainability via accounting ratios: The case of Nigerian listed firms. Journal of Economic and Financial Sciences, 12(1), pp. 22-29; DOI : 10.4102/jef.v14i1.529.

Amcor, 2022. Annual reports | Amcor. [Online] Available at: https://www.amcor.com/investors/financial-information/annual-reports [Accessed 24 February 2022].

Ameen, A. M., Ahmed, M. F. & Abd Hafez, M. A., 2018. The Impact of Management Accounting and How It Can Be Implemented into the Organizational Culture. Dutch Journal of Finance and Management,, 12(2), pp. 22-29.

Annual Report, 2022. Annual Report. [Online] Available at: https://www.annualreports.com/Company/Bellamys-AustraliaLtd [Accessed 24 February 2022].

ASX, 2022. Company directory – ASX. [Online] Available at: https://www2.asx.com.au/markets/trade-our-cash-market/directory

ASX, 2022. Schaffer Corporation Limited. [Online] Available at: https://www.asx.com.au/asxpdf/20210917/pdf/450m68jf56ltjf.pdf

BHP, 2022. Annual report 2021 | BHP. [Online] Available at: https://www.bhp.com/investors/annual-reporting/annual-report-2021[Accessed 24 February 2022].

Coles Group, 2022. 2020 ANNUAL REPORT – Coles Group. [Online] Available at: https://www.colesgroup.com.au/DownloadFile.axd?file=/Report/ComNews/20200924/02284766.pdf

[Accessed 24 February 2022].

Coles Group, 2022. Coles Group | A trusted retailer, delivering quality value and …. [Online] Available at: https://www.colesgroup.com.au/[Accessed 24 February 2022].

Newcrest Mining, 2022. 2021 Annual Report – Newcrest Mining. [Online] Available at: https://www.newcrest.com/2021-annual-report/overview[Accessed 24 February 2022].

Rio Tinto, 2022. Annual Report – Rio Tinto. [Online] Available at: https://www.riotinto.com/en/invest/reports/annual-report[Accessed 24 February 2022].

Rio Tinto, 2022. Rio Tinto | Global. [Online] Available at: https://www.riotinto.com/en

[Accessed 24 February 2022].

Schaffer, 2022. Annual & Half Yearly Reports | Schaffer Corporation Limited. [Online]

Available at: https://schaffer.com.au/shareholders-investors/annual-half-yearly-reports/[Accessed 24 February 2022].

Transurban Group, 2022. Environmental initiatives | Transurban Group. [Online] Available at: https://www.transurban.com/community-and-sustainability/environment[Accessed 24 February 2022].

Transurban Group, 2022. Reports | Transurban Group. [Online] Available at: https://www.transurban.com/about-us/reporting[Accessed 24 February 2022].

Wesfarmers, 2022. Wesfarmers Annual Report. [Online]

Available at: https://www.wesfarmers.com.au/docs/default-source/asx-announcements/2020-annual-report.pdf?sfvrsn=67950abb_0[Accessed 24 February 2022].

Woolworth, 2022. Annual Reports. [Online] Available at: https://www.woolworthsgroup.com.au/page/investors/our-performance/reports/Reports/Annual_Reports[Accessed 24 February 2022].

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