The company that has been selected is 1ST group limited – Health Care Equipment & Services providing company is where the doctors and the patients connect with each other on a common portal. It aims to reduce the gap between the doctors and the patients and make sure that people have health services easily available. In this assignment the annual report of the company has been downloaded to make a statement whether the company has followed the guidelines in the preparation of the statements and how friendly it is to the users of the company and on what grounds do they need to improve (Abdullah & Said, 2017). The conceptual framework of preparation of the financial statements that has been presented by the IASB aims to improve how companies all around the world are preparing their statements and enhance and includes certain characteristics like timeliness, reliability, validity etc. All this helps the users in understanding that the financial statements are free from all kinds of errors and understanding that analyzes is based on the same. The conceptual framework also aims to improve the concept of comparability by ascertaining that there in uniformity among the companies based on which they are preparing their financial statements (Boghossian, 2017).
Requirements of the Conceptual Framework of the company
The annual statements of the company have been analyzed to see what methods are based on which they are preparing the assets and liabilities of the companies and presenting the same. They need to see that valuation is done on correct methods so that the correct financial position of the company is presented and there are no errors in the same. It can be seen that IASB has presented the various guidelines that companies need to follow and the management needs to have proper knowledge about that so that they can apply it (Charles H, et al., 2015). In case of 1ST group limited they have prepared the financial statements based on the guidelines that were presented to them as per the conceptual framework. It has been clearly mentioned what methods of valuation has been used and what are the areas in which the users need to focus more. All of these have been presented in the annual reports of the company in the notes to accounts of the company. An extract from the annual report of the company has been presented below to showcase this point very clearly-
The fundamental qualitative characteristics of the conceptual framework which includes relevance and faithful representation. It is important that the information that is presented in the annual report of the company should be relevant and should be related to the period during which the report has been provided for. It is also important that information should be faithfully represented and there should be no errors and frauds on part of the company. This is the main basis based on which the conceptual framework has been prepared by the authorities and thus that would be helpful to the users as they will have that guarantee that the financial statements are free from all kind of errors. In case there is any threat to the materiality level in case of the company then that should also be properly highlighted by the management of the company in the annual report of the company. The auditors should also do the same (Coate & Mitschow, 2017).
The various qualitative characteristics includes-
It is important that data should be presented in such a manner that it can be easily compared with the information of the other companies. Conceptual framework helps in making sure that there is uniformity between the financial statements of the companies around the world so that helps in comparing the results accordingly. Thus, that is useful to the users also as they can compare the competitors and take decisions accordingly.
It is important that the financial statements of the company should be free from all kind of errors, and there should not be any mistakes and fraud on part of the management. The management should make sure that they need to prepare the statements in such a manner that is free from errors and in case they are making that assumptions they should state the same in their notes to accounts. All significant accounting policies and accounting methods must be stated properly in case of all items that have material relevance (Cundill, et al., 2017). An extract from the annual report of the company has been given below-
It is important that information should be related to the period during which the financial statements have been presented. It should be related to the current period, in case there are certain events that are affecting material levels of the company then should be clearly stated in the annual reports of the company. So, we see that information should be time related and should be prepared on such basis that it showcases the true position of the company and its financials related to that period (Johan, 2018).
The financial statements should be such that there are easily understandable, the users are not having high advanced knowledge about the accounting policies. They only have basic knowledge, so it is important that financial statements should be easy to understand and should not include any kind of errors and mistakes. The language used should be clear, it should not be vague, and it must be user friendly and that should be the aim of the company preparing such statements (Webster, 2017).
Based on all this it can be said that the financial statements have been prepared based on the principles of fundamental framework. They have applied all the guidelines and principles that they need to follow (Kaufmann, 2017). It aims to make the user experience very simple and better decisions can be taken based on the same. So, we see that conceptual framework is a very important change that the IASB has tried to bring in preparation of the financial statements and thus that makes it better for all the companies of the world. And in case of this company also same has been followed (Wellmer, 2018).
The directors give a declaration that they have prepared their statements as per the rules of the conceptual framework and, they have stated that the statements have been prepared as per the Australian Accounting Standards and the Corporations Regulations 2001. They have stated that the statements give a true and fair view of the company financials. The director has also stated that there are reasonable grounds to believe that the company would be able to pay of their debts. So, this can give a clarity to the users accordingly (Kusolpalalert, 2018). The company has followed the same and proper clarity has been given in this case also. An extract from the director’s declaration has been given below-
The auditors are given the responsibility to manage the financials of the company and make a comment on the validation of the same. They review the annual reports and state whether the books of the company are free from all kind of errors and mistakes. The auditors have stated that the books of the company are free from all kind of errors and, they have given a clear report on the same (Ruth, 2018). The users can refer to the audit report of the company and take decisions whether they want to invest in the company or not. An extract from the annual report of the company has been stated below-
Conclusion
Based on the overall analysis it can be said that financial statement of the company is free from all kind of errors. The conceptual framework has made the financial statements easy to understand for the users. It has also helped in making the directors more responsible. In case they fail then they can be held liable for the same. The conceptual framework aims to attain uniformity between the accounts of the companies all around the world. In the given case it can be seen that the company was able to abide with all the guidelines and principles.
References
Abdullah, W. & Said, R., 2017. Religious, Educational Background and Corporate Crime Tolerance by Accounting Professionals. State-of-the-Art Theories and Empirical Evidence, pp. 129-149.
Boghossian, P., 2017. The Socratic method, defeasibility, and doxastic responsibility. Educational Philosophy and Theory, 50(3), pp. 244-253.
Charles H, C., Giovanna, M., Dennis M, P. & Robin W, R., 2015. CSR disclosure: the more things change…?. Accounting, Auditing & Accountability Journal, 28(1), pp. 14-35.
Coate, C. & Mitschow, M., 2017. Luca Pacioli and the Role of Accounting and Business: Early Lessons in Social Responsibility. s.l.:s.n.
Cundill, G., Smart, P. & Wilson, H., 2017. Non?financial Shareholder Activism: A Process Model for Influencing Corporate Environmental and Social Performance. International Journal of Management Reviews, 20(2), pp. 606-626.
Johan, S., 2018. The Relationship Between Economic Value Added, Market Value Added And Return On Cost Of Capital In Measuring Corporate Performance. Jurnal Manajemen Bisnis dan Kewirausahaan, 3(1).
Kaufmann, W., 2017. The Problem of Regulatory Unreasonableness. First ed. New York: Routledge.
Kusolpalalert, A., 2018. The relationships of financial assets in financial markets during recovery period and financial crisis. AU Journal of Management, 11(1).
Ruth, W., 2018. ‘Worrying’: Companies’ reporting of climate risks goes ‘backwards’. The Sydney Morning hearld, 20 September.
Webster, T., 2017. Successful Ethical Decision-Making Practices from the Professional Accountants’ Perspective. ProQuest Dissertations Publishing.
Wellmer, A., 2018. The Persistence of Modernity: Aesthetics, Ethics and Postmodernism. fourth ed. UK: Polity Press.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download