a.The TPG Telecom Company is the leading telecommunication company in Australia that provides variety of services in this field which include various mobile and dth services. It has its own mobile network and is the second largest supplier of internet in Australia. On the basis of the annual reports of the company the company is performing extremely well, given its high revenue and market share. The company is also trying to expand in other areas of the world and improve its annual position (Abbott & Kantor, 2017). It is trying to make its presence in the international market with its high data services and efficient broad band network. The company has large number of subsidiaries that provides bundle services to large number of companies. The accounting policies and the estimates of the company will be discussed in brief in this report.
There are various accounting standard and provisions that has been set as per the conceptual framework network that has been prepared by the regulatory authorities to help the company in the preparation and presentation of their financial statements. The most important of these are US GAAP and IFRS that has large number of provisions that the company requires to follow. The conceptual framework is a conceptual tool that is used by companies to take conceptual decisions and make rational choices. The IFRS is a global framework that is trying to unify the accounting policies around the world so that all the companies follow the same method and it helps in removing barriers between the nations (Alexander, 2016). The main purpose of these accounting policies and programs is to provide a system of logics and ideas that can be used to provide a consistent set of various rules and standards. It helps in defining the nature of the financial statements and sets specific rules for the same. In the given case we will analyze the annual report of the stated company.
b.i.The consolidated statements of the company are prepared as per the AASB 101 conceptual framework of accounting which has been issued by the Australian Accounting Standard Board . The books of the company are prepared as per the IFRS and the same has been followed very accurately. All the notes of account are accurate and proper disclosures has been given by the company. The accounting policies of the firm are stated in the report of the director, an extract of the same is attached below.
ii) There is required amount of flexibility in the preparation of the financial statements. However in case of any deviations from the said standards the companies need to give proper disclosure in their notes to accounts
iii) IFRS is a global accounting framework of accounting that is followed by large number of competitors of the company like Vodafone and Telstra. However in case of TGP Telecom the company follows the rules that has been set as per the AASB in compliance with the IFRS and a note for the same is attached. The main guiding framework is of the AASB.
iv) One of the rival companies of the company is Telstra, that operates in the same line of business. It is the largest telecommunications company in Australia that provides variety of services. The company has the largest market share in this industry given its strong equity position. The books of accounts of the company are prepared as per the IFRS network and corporations and the same is declared in the annual reports of the company.
Both the companies are complying with different accounting frameworks , however in case of TGP Telecom IFRS is followed for the preparation of the annual statements and proper disclosures in regard to the same has been given.
As per the ration analysis of both the companies on the basis of the information that is provided in their annual reports it can be said that the liquidity position of Telstra is better than TGP, as the overall current ratio and quick ratio of the company is very favourable (Burke & Clark, 2016). The shareholders of the TGP company are in a better position than Telstra, as the overall return on assets and return on equity of the company is very string that shows that the shareholders are gaining from the company. In case of Telstra the retun on equity and assets are not strong thus this shows that the company is not earning enough to satisfy the needs of the shareholders. Howveer it can be said that the Telstra company is having better position financially given its strong market presence on the basis of its overall trading of equity. On the basis of the policies that are followed by the companies in the preperationa nd presnetaion of their annual reports. It can be said that Telstra has more stronger accounting framework and better disclosure and presentation is followed by the company (Chariri, 2017). Proper assumptions have been taken and the same is stated in the annual report. In case of TGP the company is following the AASB Framework which is as per the Australian rules and standards , hence the company lacks the touch of the global essence. Moreover it can be seen that there are no proper disclosure given and the overall prepeartion and presnetaion of the statements is not upto the mark as desired of such a gbig company. In comparison of both the company, the policies of Telstra are more stronger than the TGP Telecom company (Crosby & Henneberry, 2016).
iv) Yes I agree with the polices and estimates. No matter what accounting framework does the companies follow they need to comply with all the relevant accounting assumptions and proper disclosures must be given in their notes to accounts.
v) The accountings strategy that has been followed by the company is revealing as the company ahs sated briefly about the same in their annual reports and has also given relevant disclosures in respect to it. The auditors of the company have given a green flag to the company in comparison to the overall statements that are prepared by them and the same has been stated in their audit reports. An extract of the same is attached.
vi) There are no such red flags that are visible in the accounting statements and the annual reports. For each of the figure that is there proper disclosures have been given very briefly and the same has been stated in the annual reports. So there is no visible activity that raises a question on the overall functionality of the company or the rules that has been followed by them. Red flags occur when the management of the company indulges in false practices to earn more revenue in which their personal motives are involved(Fay & Negangard, 2017).
c.i)There are many pressures that exist on these companies that influence their overall decisions and actions. The major political influences that affect the functioning of the company and their overall operations are that there are a lot of regulations that are very complex in nature and that the companies have to comply with. The major issues are present in the various trade barriers, complex networks, national radio spectrums that affect the position of these companies in the market (Fay & Negangard, 2017). The companies need to comply with all these and in any case if they fail they will be penalized. The only political factors that are working in the favor of these companies are deregulation and privatization. Deregulation and privatization helps the company to avoid unwanted political interference and hence help them in doing their work as per their own wish (Prasad & Chand, 2017).
ii) Every company makes certain accounting assumptions while prepration of their financial ststemnts and gives the relevant disclosures for the same. The companies needs to prove the main logic behind these estimate and how it is reasonable for them(Dichev, 2017). The same thought must be supported by the auditors and it should be in line with the guidng conceptual framework that the company is following. In any case if the company has made certain estimates but no disclosure is given in regard to the same than the company will be held liable and in the long run they have to justify their action. In case of TGP the company has made certain assumptions and gave relevant disclosures for the same. These are mianly stated in the notes to account of the company, relevant disclosures in regard to the same has been in it.
iii) It is very important for these organizations to properly state the various facts and figures related to the annual accounts. In any case if the company make any disclosures but there is no proper basis for the same then the company needs to prove the given statements (Chiapello, 2017). It can also be seen that in all these cases if the company is found guilty to falsifying the annual reports strict actions will be taken against it. Hence it is stated that these companies must properly check the facts and figures before making such disclosures and must given proper justification to all the various assumptions that were made by them (Given, 2016).
d. Investigative report on the Managers’ Accounting Strategy and Reporting Strategy
The managers of the company are the main people who are given the responsibility to supervise the overall formulation and presentation of the annual reports of the company. In case the auditors find any issues then the managers need to help the auditors in solving the same. In the given case we will prepare a report on the overall actions of the managers and the necessary steps that can be taken by them
Section 1: key accounting policies
In the given company the books of the company are prepared as the AASB framework in compliance with the IFRS in the preparation and presentation of the annual reports of the company. Relevant disclosures have been given in the various notes to account and the company has also attached proper declaration for all the actions that has been taken by them. In any case if the company malpractices than the management of the company will be held liable (Guragai, et al., 2017). The managers must see that all the disclosures are clear and price and in any case if they notice any red flags immediate actions must be taken for the same. Proper presentation and disclosure is very important for the overall success of the company (Crosby & Henneberry, 2016).
Section 2: Assess Accounting Flexibility
In case the managers of the company are not able to follow a single rule for the preparation of the consolidated statements there are high chances that the information will be distorted. It will lead to lack of uniformity in the accounts over the years, and the companies may not be able to follow a single path for their analysis (Han, et al., 2017). It is thus important that the managers do not indulge in large amount of fluctuations, a single accounting framework must be followed over the years that makes the overall accounting clear and free from all kind of distortions and will be helpful for the investors also as they will be able to make necessary comparisons while taking important decisions in regard to the company and its operations.
Section 3: Evaluation of the Accounting Strategies
If there is high amount of flexibility involved in the overall preparation of the financial statements than that might lead to huge amount of distortions and sometimes it is good also because the managers will be able to convey such economic decisions that they otherwise might not be able to convey to people. This is where the decision making abilities of the management comes into play and can be helpful in the long run. It is important that the mangers use the standards that are as per the industry guidelines and norms (Kew & Stredwick, 2017). It is important that there must not be any personal motives involved in case of the managers. In case the management is considering changes in the accounting policies then there must be basis for the same and the rationality must be established. It must be seen whether certain transactions have been structured to achieve particular objectives of the company. Like in case of TGP we see that the consolidated financial statements the same has been prepared on the basis of historical cost, except the all over assets and the liabilities that have been valued on the basis of the fair value. This is done to make the correct valuation of the assets of the company (Laursen & Thorlund, 2016).
Section 4: Evaluation of the Quality of disclosure
It is important for the mangers of the company to see whether all the disclosures that has been given is in line with the accounting standards that has been followed. In case of TGP all the necessary disclosures are adequate and price. They are sufficient with the current norms. The US GAAP do not restricts the company with respect to the disclosures they can make. Proper segment disclosures have been done in case of TGP as per the respective guidelines (Maynard, 2017).
Section 5: Identify Potential Red Flags
Red flags refer to certain disclosures in the accounts of the company that are not relevant and consistent with the activities of the company. It is an indication that there might be certain malpractices on part of the management that might hamper their overall performance (Minnis & Sutherland, 2017). But in this case we see that there are no potential red flags in the system that might affect their performance. The company has given relevant disclosures for the all their actions and all is properly defined (Birt, et al., 2017).
Section 6: Compliant with the Conceptual Framework
In this report we can say that the company has complied with the relevant accounting framework and has given proper disclosures in regard to the same. The fact has been supported by the management of the company and relevant actions have been taken to make sure that the books are free from all kind of errors and issues (Sweeting, 2017).
Conclusion
Thus we can say that it is very important for the companies to follow the accounting framework for the preparation and presentation of the financial statements. It is the standard that all the companies must comply with and in any case if there is any issue relevant actions must be taken against the management of the actions. The books of the company must be audited properly so that the relevancy of the financial statements can be established and necessary steps must be taken to keep the accounts free from errors and discrepancies (Prasad & Chand, 2017).
Abbott, M. & Kantor, A., 2017. Fair Value Measurement and Mandated Accounting Changes: The Case of the Victorian Rail Track Corporation. Australian accounting Review.
Alexander, F., 2016. The Changing Face of Accountability. The Journal of Higher Education, 71(4), pp. 411-431.
Birt, J., Muthusamy, K. & Bir, P., 2017. “XBRL and the qualitative characteristics of useful financial information”. Accounting Research Journal, 30(1), pp. 107-126.
Burke, J. & Clark, C., 2016. The business case for integrated reporting: Insights from leading practitioners, regulators, and academics. Business Horizons, 59(3), pp. 273-283.
Chariri, A., 2017. FINANCIAL REPORTING PRACTICE AS A RITUAL: UNDERSTANDING ACCOUNTING WITHIN INSTITUTIONAL FRAMEWORK. Journal of Economics, Business and Accountancy, 14(1).
Chiapello, E., 2017. Critical accounting research and neoliberalism. Critical Perspectives on Accounting, Volume 43, pp. 47-64.
Crosby, N. & Henneberry, J., 2016. Financialisation, the valuation of investment property and the urban built environment in the UK. Urban Studies, 53(7).
Dichev, I., 2017. On the conceptual foundations of financial reporting. Accounting and Business Research, 47(6), pp. 617-632.
Fay, R. & Negangard, E., 2017. Manual journal entry testing : Data analytics and the risk of fraud. Journal of Accounting Education, Volume 38, pp. 37-49.
Given, L., 2016. 100 questions (and answers) about qualitative research. s.l.:Sage.
Guragai, B., Hunt, N., Neri, M. & Taylor, E., 2017. Accounting Information Systems and Ethics Research: Review, Synthesis, and the Future. Journal of Information Systems: Summer 2017, 31(2), pp. 65-81.
Han, B., Subrahmanyam, A. & Zhou, Y., 2017. The term structure of credit spreads, firm fundamentals, and expected stock returns. Journal of Financial Economics, 24(1), pp. 147-171.
Kew, J. & Stredwick, J., 2017. Business Environment: Managing in a Strategic Context. second ed. London: Chartered Institute of Personnel and Development.
Laursen, G. & Thorlund, J., 2016. Business Analytics for Managers: Taking Business Intelligence Beyond Reporting. Second ed. CANADA: Wiley Publisher.
Maynard, J., 2017. Financial accounting reporting and analysis. second ed. United Kingdom: Oxford University Press.
Minnis, M. & Sutherland, A., 2017. Financial Statements as Monitoring Mechanism: Evidence from small Commercial loans. Journal Of Accounting Research, 55(1), pp. 197-233.
Prasad, P. & Chand, P., 2017. The Changing Face of the Auditor’s Report: Implications for Suppliers and Users of Financial Statements. Australian Accounting Review.
Sweeting, P., 2017. Financial Enterprise Risk Management. Second ed. UK: Cambridge University 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