• Assessment item 2
Assignment 1: Newsletter and financial statements
Value: 15%
Due date: 06-Apr-2018
Return date: 30-Apr-2018
Submission method options
Alternative submission method
Task
Complete the 2 questions given below. A total of 50 marks are allocated to the questions below, which will then be converted to a mark out of 15%.
All workings, where appropriate, must be shown to substantiate your answers.
Question 1 [35 marks]
The regulatory environment and financial reporting
You are employed in a large accounting firm which specialises in preparing general purpose financial reports for large companies that are listed on the Australian Securities Exchange (ASX). As the training manager, one of your key tasks is to prepare a regular newsletter for staff involved in the preparation of the above financial reports. The purpose of the newsletter is to keep staff updated on the latest financial reporting news, alerting staff of changes and developments that may impact their work, and provide enough information to staff to satisfy the following:
o For staff to understand the nature of the news / change / development and its potential impact (so staff can decide whether they need to investigate further given the nature of their own work);
o Provide directions to staff of where they can access further information on the news / change / development if they wish to (including website links where appropriate).
Required:
Prepare a 2 page newsletter that identifies and summarises changes / developments and news in the financial reporting environment for the period from 1 December 2017 to 31 March 2018.
Detailed guidelines for completing this task:
1. Identification of changes and developments
This will involve extensive research on a number of sources over the required period. You will need to identify and consider a range of developments/changes such as:
o Technical issues: for example the issue of new accounting standards, amendments to accounting standards, updates on AASB or IASB projects in progress, outcomes of AASB or IASB meetings, amendments to ASX listing rules.
o Regulation and monitoring of financial reporting: for example ASIC reviews on financial reporting.
o Political influences or other potential developments. 'Political' does not only mean action from politicians – it would also include lobbying/actions by other groups to promote their own interests – for example there may be articles about companies, or particular interest groups such as Group of 100, saying that if certain accounting standards are introduced this will disadvantage or have a negative impact.
You will need to consider both local (Australian) and international sources and developments.
The restriction of a 2 page newsletter means that you need to use your own judgment as to whether to include information about specific news items and changes / developments, and how much information to include. It is not intended that you provide complete details of changes / developments (although you may consider in particular cases that more detail is needed).
Given the target audience, it would be assumed that they have a working knowledge of common terms and abbreviations (such as AASB, IASB), so abbreviations may be used.
What not to consider?
You need to take care that the news / changes / developments included in the newsletter are relevant to the objective, in particular that they relate directly to the preparation of general purpose financial reports for large companies listed on the ASX. The newsletter should not consider areas only indirectly related to the preparation of financial reports such as (this is not an exhaustive list):
o Fraud
o Auditing
o Taxation
o Other disclosures by listed companies such as: industry disclosures required by peak organisations, and voluntary disclosures in the area of corporate social responsibility.
2. Potential sources
Given the scope of the potential influences on financial reporting, you will need to research a range of sources. Below is a list of sources that may be of interest. Note that this list is not exhaustive, students should search for sources outside of these. Students should not rely on any one type of source, but a range of sources from each category, i.e. do not just look at websites, also check journals, newspapers etc. Examples of possible information sources include:
(a) Websites such as those of:
o Australian Accounting Standards Board
o Financial Reporting Council
o Australian Securities and Investment Commission
o Australian Securities Exchange
o International Federation of Accountants
o Chartered Accountants Australia and New Zealand
o CPA Australia
o International Accounting Standards Board
o Websites of large accounting firms
(b) Professional publications:
o In the Black (CPA)
o Acuity (CAANZ)
(c) Newspapers/journals
3. Format and presentation
The following are to be observed for your newsletter preparation.
o The top of the newsletter must include the title (you need to decide what to call your newsletter) and details of the period the newsletter is considering.
o The newsletter should not read as one continuous 'essay'. It must include headings and sub-headings that assist in identifying the nature of news / changes / developments and help to guide the reader, and also enable the reader to distinguish between items of interest and the relative importance of changes.
o You must refer the reader to specific sources (including website links where appropriate) so that they are able to obtain more detailed information of the news / change / development. If you include direct quotations in your newsletter, you need to include in-text citations using the APA referencing format.
o The newsletter must be printed in minimum font set at 11 points (you may wish to use different formatting (such as larger fonts) for headings etc. Apart from minimum font size, there are no specific requirements in relation to line spacing, margins etc. However, you should note that simply reducing line spacings or margins to 'fit more in' may impact on the presentation and effectiveness of the newsletter.
o There is no specific 'word limit'. The newsletter must be no longer than 2 pages. In cases where the newsletter exceeds the 2 page limit, only the first 2 pages will be marked.
o Do not attach actual articles/printouts of web sources etc to your assessment. You are only required to include details of these in the bibliography (see section 4 below).
Don't be afraid to be creative. The effectiveness of a newsletter is impacted by how interesting the readers find it.
4. Bibliography and referencing
This assessment must include a bibliography using the APA referencing style, rather than a reference list (this should not be part of your newsletter and is to be given on a separate page). A bibliography includes all materials used/read in the preparation of your assignment, not just those referenced or cited within the paper. The reason a bibliography is required (rather than a reference list) is that this will provide an insight into the range of your research activities which is part of the criteria for assessment. It is expected that the bibliography will be quite long. The bibliography needs to include specific articles or readings that you have actually accessed - not just a general link to a website or newspaper etc. Therefore if you use a source such as the AASB website, please reference every article that you have read separately. You should only include sources that are related to the area. For example, if you look at a particular publication but most of the content relates to taxation or auditing issues, it would not be appropriate to include these articles in your bibliography as these are not directly related to the area of interest.
When citing electronic sources, please also include the date accessed. If you are unsure how to cite and reference your readings, check the APA referencing guide here: APA referencing guide.
Please be reminded that plagiarism is regarded as a serious issue within the University system with severe consequences for students who have been found to have deliberately plagiarised, the minimum penalty being zero for the assignment. All students should ensure that they are familiar with the plagiarism policy and referencing requirements before commencing assessment tasks.
Question 2 [15 marks]
Financial statement presentation
You are the senior financial accountant at Blake Ltd. One of the new trainee accountants has prepared the following statement of profit or loss and other comprehensive income and statement financial position from the trial balance, after its first year of operations:
Additional information:
o Blake Ltd uses the single statement format for the statement of profit or loss and other comprehensive income and presents an analysis of expenses by function on the statement.
o In relation to the statement of financial position, where AASB 101 requires entities to disclose further sub-classifications of the minimum line items on the face of the statement or in the notes, the directors of Blake Ltd want to report only the minimum line items on the face of the statement, and leave the sub-classifications to be disclosed in the notes.
Required:
Review the financial statements prepared by the trainee accountant. Discuss what corrections / changes need to be made to the financial statements, to ensure that they comply with the requirements of AASB 101. Provide references to relevant paragraphs in the accounting standards where appropriate to support your answers. Note: You are not required to discuss any note disclosures that are needed, or prepare revised financial statements.
Question 2 Max. marks awarded
Discuss corrections / changes needed 13
References 2
Total 15
Rationale
The purpose of this task is to help you further develop some of the skills and knowledge required and valued by the accountancy profession. The task that you will be required to undertake is similar to the tasks required of a professional accountant working within the financial reporting field.
Given that all reporting entities need to prepare general purpose financial reports, accounting professionals need to be experts in preparing key financial statement reports that comply with the presentation requirements contained in the accounting standards.
Accounting professionals also need to ensure that they are aware of current developments in the financial reporting environment and that their knowledge is up to date. They need to be able to identify changes that have occurred that may impact on their work and to know where they can obtain information about these changes.
In this assignment, you are asked to provide a summary of recent developments relating to financial reporting and prepare financial statement reports in accordance with accounting standard requirements. As such this assignment allows you to:
o develop the ability to identify and source changes to accounting/reporting requirements so as to update professional knowledge required for practice;
o acquire an awareness of current developments and changes (both locally and internationally) that may impact on current and future accounting and reporting rules and regulations;
o develop the ability to provide written material appropriate to the accountancy profession;
o appreciate the limitations of the currency of knowledge in a technical financial reporting area; and
o research current financial reporting obligations relating to the preparation and presentation of general purpose financial statement reports and apply this knowledge to a range of practical situations.
This assignment will assess your ability to:
o discuss critically and comprehensively changes and developments in the statutory and professional requirements upon which published financial statements are based;
o prepare basic financial statements for reporting entities, in accordance with accounting standard requirements; and
o be able to interpret and apply generally accepted accounting principles and specific financial accounting standards relating to concepts of recognition, measurement, and disclosure of key financial statement elements when preparing general purpose financial reports.
Marking criteria
You will be assessed on the following:
QUESTION 1: Newsletter (35 marks)
The newsletter will be assessed in relation to the criteria specified in the following marking guide:
Criteria High Distinction Distinction Credit Pass
Research current statutory and professional sources for current developments and changes in the financial reporting environment relevant to large ASX-listed companies. Report findings by categorising the information in order of importance, and providing focused attention to major news items. [65%] The newsletter correctly identifies and reports on an impressive range of local and international changes/developments in the financial reporting environment.
All news items reported are directly relevant to financial reporting for large ASX-listed companies.
The newsletter clearly differentiates between significant and minor news items.
Appropriate detail is provided for all news items, with an emphasis on key aspects of major changes and developments. The newsletter correctly identifies and reports on a large range of local and international changes/developments in the financial reporting environment.
Almost all of the news items reported are directly relevant to financial reporting for large ASX-listed companies.
The newsletter clearly differentiates between significant and minor news items in most instances.
Appropriate detail is provided for almost all news items, with an emphasis on key aspects of major changes and developments. The newsletter correctly identifies and reports on a good range of local and international changes/developments in the financial reporting environment.
Many of the news items reported are directly relevant to financial reporting for large ASX-listed companies.
The newsletter provides some differentiation between significant and minor news items.
Appropriate detail is provided for most news items.
The newsletter correctly identifies and reports on a satisfactory range of local and international changes/developments in the financial reporting environment.
Most of the news items reported are directly relevant to financial reporting for large ASX-listed companies.
The newsletter provides limited differentiation between significant and minor news items.
Appropriate detail is provided for some news items.
Provide directions to readers to access further information. [5%] All news items provide details of where audience members can access further information, including website links where appropriate. Almost all news items provide details of where audience members can access further information, including website links where appropriate. Most news items provide details of where audience members can access further information, including website links where appropriate. Some news items provide details of where audience members can access further information, including website links where appropriate.
Prepare bibliography of relevant information, presented in accordance with the APA referencing system. [10%] A very impressive range of highly relevant local and international sources listed in bibliography.
Bibliography prepared according to the APA referencing system without flaw. An impressive range of highly relevant local and international sources listed in bibliography.
Bibliography prepared according to the APA referencing system, with minor flaw. A broad range of relevant local and international sources listed in bibliography.
Bibliography prepared according to the APA referencing system, with some errors. A limited range of sources listed in bibliography.
Bibliography prepared according to the APA referencing system, with a number of errors.
Publish written material appropriate to the accountancy profession. [20%] The design of the newsletter is highly creative and it is structured exceptionally well.
Titles and headings attract attention and are highly informative.
The writing style is succinct, cohesive, easy to read and it is grammatically correct with accurate use of syntax, spelling and punctuation. The design of the newsletter is creative and it is very well structured.
Titles and headings attract attention and are informative.
The writing style is clear and succinct, easy to read and it is grammatically correct with accurate use of syntax, spelling and punctuation. The design of the newsletter is simplistic but effective, and it is well structured.
Titles and headings attract some attention and are informative in most cases.
The writing style is appropriate and easy to read most of the time, with mostly accurate use of syntax, spelling and punctuation. The design and structure of the newsletter is simplistic but effective.
Titles and headings attract some attention, however could be more informative.
The writing style is appropriate and easy to read most of the time, with mostly accurate syntax, spelling and punctuation.
QUESTION 2: Preparation of Financial Statements (15 marks)
Criteria High Distinction Distinction Credit Pass
Prepare financial statements in accordance with the accounting standards. Demonstrates a comprehensive understanding of the presentation requirements in AASB 101 Presentation of Financial Statements and the ability to apply these requirements to a range of practical situations, without flaw.
Applies the definition and recognition criteria for assets, liabilities, income, expenses and equity in the Conceptual Framework to the preparation of financial reports for reporting entities, without flaw.
Where required, workings, explanations and references are provided, and are accurate and complete. Demonstrates a thorough understanding of the presentation requirements in AASB 101 Presentation of Financial Statements and the ability to apply these requirements to a range of practical situations, with minor flaw.
Applies the definition and recognition criteria for assets, liabilities, income, expenses and equity in the Conceptual Framework to the preparation of financial reports for reporting entities, with minor flaw.
Where required, workings, explanations and references are provided, and are mostly accurate and complete. Demonstrates a good understanding of the presentation requirements in AASB 101 Presentation of Financial Statements and the ability to apply these requirements to a range of practical situations, with a limited number of minor errors.
Applies the definition and recognition criteria for assets, liabilities, income, expenses and equity in the Conceptual Framework to the preparation of financial reports for reporting entities, with a limited number of minor errors.
Where required, workings, explanations and references are mostly provided, and are accurate.
Demonstrates a satisfactory understanding of the presentation requirements in AASB 101 Presentation of Financial Statements and the ability to apply these requirements to a range of practical situations, with a limited number of errors.
Applies the definition and recognition criteria for assets, liabilities, income, expenses and equity in the Conceptual Framework to the preparation of financial reports for reporting entities, with a limited number of errors.
Where required, workings, explanations and references are partially provided, and are satisfactory.
Presentation
There are detailed presentation requirements provided in the 'Task' section above for the newsletter.
Correct referencing procedures following the APA referencing style should be strictly adhered to for all assignment tasks. For further information about referencing, please refer to the CSU referencing website at: http://student.csu.edu.au/study/referencing-at-csu
Requirements
The assignment must be submitted through Turnitin and a printed copy of the assignment from Turnitin with the date of your Turnitin submission must also be submitted to your lecturer.
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