Accounting and Changes in Policies and Concern for the Environment and Society - Essay Example

Financial reports form a vital part of every organisation. Every business ensures to submit a report as per the required guideline set by each country and adhering to the international requirements. Financial reports helps different people associated with the company. The users of the report find valuable information about the company, their performance and future plans. This also forms vital for the society as they come to know the organisation work towards the society. It helps the society to find out whether the corporate social responsibilities are adhered to. For this it is important that it is submitted in a manner which benefits most. The report submitted in Australia helps the society as it provides valuable information. The financial reports contain “both the financial and non financial information to improve their strategy”. (Robert & Michael, 2010) The non financial information provides “valuable information to the society like the organisations efforts to curb pollution, their contribution towards the society and other areas where the company is working to improve the condition of the society”. (Robert & Michael, 2010) This provides the needed information and helps the society to identify areas which will help them. Having single reporting is ensuring that “information is compiled in a better way and it helps to find out how the financial performance gets altered due to it”. (Robert & Michael, 2010) The society based on it can understand the contribution towards the stakeholders. The manner in which it is submitted improves clarity and presenting in it this form makes it easy for the readers. The Australian financial reports to improve transparency for the society and to ensure that all the requirements are met have prescribed certain norms. Organisations need to “submit audited financial statement for at least two years and the proposed balance sheet for the next three years so that they get the loan required”. (LCA, 2003) This will benefit the society as they will know what the company is going to do in coming years. It will also help the society to know the future prospects and their contribution to the society. The submission of financial report in the form they are submitted ensures that “the three tier reporting framework required for companies limited by guarantee is streamlined as per the guidelines”. (Collins, 2010) This helps to ensure that the rules are adhered to. This new streamlined process ensures that “annual reports are submitted to each member so that they know the way in which organisation is performing so that they know the impact it has on the society and self”. (Collins, 2010) This will thereby improve efficiency and ensure that people associated with the company knows what is happening. The Australian government with their measure to curb global warming has also brought about a change in the policies. The Australian government is looking for “Environmental policy, the indigenous people policy and involuntary resettlement policy to avoid, minimize and reduce the impact on environment and society so that project costs are reduced and society is protected”. (Rosien, 2007) This will help to save the society and integrating it with the financial report is providing the society an inward view into the different ways an organisation is performing. The carbon reduction pollution scheme of trading in carbons which is accounted in the financial statement will affect their “valuation of assets as impairment cost will have to be accounted for”. (CPA, 2008) This will change the financial decision as “suppose a business entity has considered using cash flows on expected basis so the business units will have to adjust it so that the impact on the scheme gets reduced and proper valuation is done”. (CPA, 2008) Representing this in the financial reports has ensured that the society knows the relevant information with regard to it. The finance department will have to consider whether “the increase in cost is passed on to the customers partially or fully and the mechanism through which this will be encountered will have to make the management think upon”. (CPA, 2008) This mechanism for pricing will have a bearing on the decision taken by the business. It will make the business units to bring about a change in the financial decision. Presenting this in the financial report will help the society to know the way the business is looking towards the society and the perspective they are considering for it. The presentation of financial report looks “into corporate governance issue and how this benefits the society on a large”. (CPA, 2008) This will make the financial decision to change as corporate governance will be looked as a major issue and to account for the changes it has necessary changes will have to be made in the financial decisions. This will make the society gather more relevant information with regard to corporate social responsibility. The Australian financial reports also ensure that “a public disclosure statement is mentioned in the report so that the person associated with the report and the society understands the policies and can decide their decision based on it”. (PDS, 2007) This will provide all the necessary information and having a statement will push the onus on the society. This ensures that the society knows the area of concern and put those in their schemes of things. The financial report presentation also helps to identify the core areas. This are of vital help to the society as it provides an overview of areas where the organisation is working. Also the detailed description of transactions provides transparency. Any change in the policies or strategies is mentioned. Even, a major decision taken by the organisation is provided with. This helps the society to get a guideline of changes that is about to follow. The society from the financial reports also comes to know the future opportunities and areas where the government along with the organisation is working for the society. The report on proper evaluation helps to find vital information. Still, there are certain areas which need to be worked upon. Improving this will help to gather more momentum and provide the society with more information. Australia which “is a market oriented economy faces the problem of imperfect information, legal problems regarding how the powers and responsibilities will be shared and difficulty in designing the incentive system and accounting information is making financial regulation difficult”. (Davis, 2008) This is making the manner in which financial reports are submitted loose a bit of relevance. This is also making it tough to identify important information for the society. The organisations need to improve this. This will help the society to find out areas where important and relevant information for the society cab ne gathered. It will help them find areas where the corporate social responsibility is adhered to. This problem of social responsibility can be adhered by “financial regulation and regulatory agencies looking that organisations submit the financial reports in the required format so that the users i.e. the society can find out information that is relevant to them and find out areas where the organisation is helping the society”. (Davis, 2008) To make the financial reports more relevant for society certain changes if the way it is submitted will ensure better results. A change which is seen is that “Australian Financial Institutions Commission has brought about a change in presentation of financial reports by ensuring that assets and liabilities are disclosed which are attributable to the benefit management fund”. (Niven, 1999) This will help to find areas which are of interest for the society. It will also as a glimpse help the society to find the contribution towards them and ways that will improve efficiency. To improve transparency for the society “it is compulsory that a director and auditor declare that the details are true and the consequences of misleading information will fall on them”. (Niven, 1999) This will make the society know that the organisation is working towards the common good. This will reveal that all information is true and based on that the society can understand the contribution of the organisation. The concern for Australian government with regard to financial report is that “there in un-clarity on the part of the way environmental transaction will be recorded which will make the financial report unclear and doubtful for the society”. (Rosien, 2007) The government needs to frame laws to improve the transparency so that the manner in which financial report is submitted gets more value. The manner in which carbon trading is to be recorded is not clear. The financial department will face the issue of reporting. As, “there is no accounting standards defined and will be done by the International Accounting Standards Board shortly so there will be a problem to recognise which standards will reap the best results”. (CPA, 2008) The emission trading has already taken in European countries and they have shows different results. So, coming down to the accounting standards which fits all will be something which will effect the financial decision. Thus, the financial reports submitted in Australia helps to achieve the objective it is meant for. With the recent changes in policies and concern for the environment and society certain changes needs to be accounted for o that the presentation of reports becomes better and more information regarding to transparency is provided. These small changes will help to improve the efficiency and make the presentation of reports better. References Collins B, 2010, “Corporation Amendment Bill 2010”, Australian Friendly Societies retrieved on April 17, 2010 from www.asfpa.org.au CPA, 2008, “Carbon Pollution Reduction Scheme: What will be the business impact”, CPA Australia Ltd, retrieved on April 17, 2010 from http://www.cpaaustralia.com.au Davis K, 2008, “Financial Regulation: Cost, benefit and process of regulatory change”, Economic Society of Australia, High Beam Research LCA, 2003, “Audit Procedure for LCA organisation (financial)”, Lutheran Church of Australia, Australia Niven D, 1999, “New Financial Reporting for Benefit Fund Friends Society”, Volume 99, Issue 16, Australian Prudential Regulatory Authority PDS, 2007, “The Product Disclosure Statement”, Mutual Life Australia Limited, CUNA Mutual Group Rosien J, 2007, “Concern’s regarding ADB safeguard policy”, Oxfam Australia, Australia Robert G & Michael P, 2010, “One Report: Better strategy through Integrated Reporting”, Harvard Business Standard Working Knowledge, retrieved on April 15, 2010 from www.One Report: Integrated Reporting for a Sustainable Strategy.com Read More