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Discuss about the Accounting in Profession For the Influential Dynamics.

Challenges in the Australian Retail Sector

According to the case study, it has been found that the Australian retail sector confronts a number of challenges that have taken place in the recent past like minimisation in sales revenue. This has mandated the need for the business organisations to search for cost minimisation methods in order to increase profits (Canning & O'Dwyer, 2016). In this regard, it needs to be mentioned that as majority of the Australian retail stores deal with consumer goods, the business managers and owners need to make decisions after careful analysis of the possible challenges.

The retail sector in Australia has a developed system, in which a large number of organisations are conducting their business operations. Along with this, the customers possess adequate knowledge regarding the retail products and the organisations operating in the sector. However, due to the initiation of online retail stores and the fall in the purchasing power of the customers due to unfavourable in the financial markets over the past few years have created enormous challenges for the retailers operating in the nation.

Both local and global brands operate in the retail environment in the market of Australia. Thus, diversification could be observed in the retail environment of the nation due to accommodation of various sub-sector specialising in particular product categories. The significant sub-sectors of the industry constitute of the following:

  • Electronic appliance retailers
  • Clothing retailers
  • Computer retailers
  • Hardware and construction materials retailers
  • Furniture retailers
  • Shoes and footwear retailers
  • Pharmaceutical product retailers
  • Stationery and book retailers
  • Games and toys retailers

The major retailers operating in the Australian market include Woolworths Group, Wesfarmers Limited, H&M, Uniqlo, Tesco Plc, Zara, Dick Smith and Aldi. All these organisations show creativity in their accounting processes for obtaining power as well as advantage over suppliers. For example, few organisations withhold supplier payment for enhancing their financial health. Moreover, delays could be observed in debt repayments of the organisation up to two years for obtaining financial mileage (Guthrie & Parker, 2016). Furthermore, certain organisations operating in the sector depend on rebates for obtaining financial mileage. The following table shows the estimated net worth of the top ten retailers in Australia: 

After critical evaluation of the provided case, cash flow is the most significant challenge affecting the organisations operating within the industry. This is because majority of the organisations are encountering cash crisis for conducting their business operations. This has aroused mainly due to the fall in prices of products owing to the economic state of the nation. As a result, it has mandated the need for the organisations to find out other alternatives in order to collect funds for operations. Therefore, the organisations are deploying delayed payments and rebates to deal with this situation. However, the excessive reliance on rebates by Dick Smith has resulted in a crisis for the organisation due to which it has to cease its operations.

Strategies for Improving Profit

The concept of good faith, in this regard, is used for implying that it is necessary for the two groups to work in harmony without making any sort of underhand dealings. It is noteworthy to mention that the Australian retailers, particularly, supermarkets, are obtaining undue benefit over the suppliers in order to raise their financial profits. Besides, the organisations need to take into consideration the application of all ethical codes of conduct at the time of transactions so that they do not lead to controversies. In other words, it is necessary for the organisations to maintain fair competition and trading practices for providing adequate favour to the end customers.

At the time the code lays stress on good faith, the issue related to trust is addressed between the retailers and the suppliers. This is because it is crucial for both the parties to maintain trust in each other so that it becomes easy for them to work in combination for betterment of the Australian retail sector, which is confronted with numerous setbacks in the current times.

The reason that the Food and Grocery Code of Conduct is termed as a voluntary code is to enable the suppliers and retailers to reach an agreement on flexible business terms that would assure benefits for both the parties (Cameron & O'Leary, 2015). It is to be noted that particular retailers have suppliers associated with them for long time, which has helped in developing understanding of the business dealings. The code of conduct is used as a medium for assuring that both parties follow agreement terms thoroughly.

ACCC has not moved this code into law for enabling the retailers and suppliers to design practices and policies favourable to both of them and the customers. This code only checks the presence of honesty in the transactions. However, such agreements should be written formally to make it easy for ACCC in enforcing contracts.

It is noteworthy to mention that relativeness needs to be present when power is applied at the workplace. For example, at the time of managing any crisis affecting all the organisational members, it would be better to avoid using power and approach needs to be made towards the employees for coming up with one common solution (Jackson, 2015). However, power needs to be applied during dispute resolution for the two conflict parties in order to regard the person in the form of authority figure. Thus, evaluation of the managerial decisions would help in identifying the legitimacy of power made by the individual in making decisions. As the business managers undertake crucial decisions, it is necessary for them to assure the legitimacy of decisions undertaken.

Ethical Considerations in the Retail Sector

It has been identified that the Australian retailers often delay in making payments to their suppliers so that financial mileage could be gained. However, this move does not adhere to the appropriate code of ethics, as it would not be fair to the suppliers (Mastracchio Jr, Jiménez-Angueira & Toth, 2015). On the other hand, it could be ignored; in case, it assists the business organisations in coming out of financial troubles. Under such situation, when the CEO approaches an individual, a negative response is to be provided by the individual. This is because delaying the supplier payments would lead to critical ethical issues, which would result in additional cost burden for the organisation, instead of maximising cash expected from delayed supplier payments. However, if the business sake is taken into consideration, acceptance could be provided in terms of delay in supplier payments.

A number of distinctions could be observed between a developed nation and a developing nation. For instance, the developed nations have greater buying power, better economic conditions and higher GDPs compared to the other nations (Mescall, Phillips & Schmidt, 2017). This denotes that the labour standards and employment conditions are more effective in developed nations compared to developing nations. This is due to the facilitation of industrialisation as well as advanced economies in the nations. Therefore, the employment standards need to be implemented in the developing nations. However, only partial application of the standards could be applied. For example, the standards related to employee rights and basic freedom could be adopted in the developing nations. Besides, the standards about relationships between staffs and employers could be applied in the developing nations. However, cultural differences would restrict the employment-related policies and legislations to be implemented in the developing nations. The policies need to be country-specific.

It is a common notion that when the customers intend to incur more prices for purchasing the products of an organisation willingly, it is deemed to be favourable for the organisation, since there would be increase in overall revenue. Moreover, the organisation would be able to enjoy competitive advantage in the market. The customer demand confronting rise in supplier payments in less developed nations are appropriate. As commented by Mintz (2016), the suppliers in less developed nations live in substandard conditions because of verty and hardships. Hence, increasing their payments is necessary for enhancing their living standards. Hence, the CEO of the organisation needs to be convinced by providing a detailed evaluation.


As the customers incur more money as long as the suppliers are paid more in less developed nations, a maximum level could be formed by the organisation for supplier payments and the cost of garments manufactured. The cost of products needs to be increased in a way that it caters for increased supplier payments and profit margin. For example, if the suppliers obtain 10% additional payments from the organisation, it is possible for the latter to increase the cost of products by 13%. This move is considered to be favourable for both the organisation and the suppliers, as the growth of both parties could be assured in the long-run. Hence, from the economical and societal perspectives, this move seems to be feasible.  

Audit fraud is considered to be a big challenge in terms of effective audit practices. Even though employees are blamed often to change the facts deliberately, more individuals need to be engaged along with the employees (Voss, 2017). The staffs are needed to be coached in changing the fact without the fear of job loss. In this regard, it is significant to assure that the facts are provided confronting the audit procedure without any feeling of intimidation. At the time of conducting the audit work, it is essential to reassure the staffs that the information would be kept confidential for avoiding the fear of job loss. A friendly atmosphere needs to be developed to assure that the employees would not be accused or victimised for the information provided. Besides, the matter could be approached from a different perspective, in which fear could be instilled in the staffs, if they do not provide accurate information. Audit fraud is considered as a crime and any individual associated with such fraud could be convicted for wrong doing. This could be used for overcoming the fear of job loss in the staffs; instead, fear could be instilled in them to imprisonment, if they do not disclose the actual facts.

Integrated reporting includes a precise report and description regarding the ways through which the activities and operations of the organisation could result in value creation. The value creation is discussed from the perspective of both short-term and long-term. With the help of integrated reporting, an organisation could be benefitted from various aspects. For example, the report could be utilised for undertaking key decisions regarding the future growth and operations of the organisation. Thus, integrated reporting intends to provide meaning associated with the performance-related data of an entity. Besides, with the help of this reporting, relationship could be formed between the information disclosed in the reports of the entity and its overall performance.

It is significant to use the framework of integrated reporting so that any change in performance could be facilitated by detecting the accurate problem areas as well as points to the precise aspects for ensuring better change. Moreover, the design of remuneration system could be affected where the report would detect the deficiencies confronting salary payments along with allowances at the organisation and addressing the same. In this regard, a positive change would be initiated from the end of the framework for the business entity.

This concept is a contract between an entity and its staffs for pegging portions of their income on the organisational performance (West, 2018). It implies that at the time the entity is performing effectively in financial matters, the staffs would have a part of the excess income included in their salaries. However, in poor business conditions, the staffs feel the pinch, as the identical rate would minimise their salaries. Based on the report of the Productivity Commission, the arrangement of “at risk” is observed to be a significant issue for the large organisations. Since the large organisations have numerous staffs, their remuneration and salaries might run in millions based on their pay grades. On certain occasions, when the performance of an organisation fails to meet the desired expectations, it might strain to increase the overall amount of remuneration for all its staffs. Due to this, they might enter into agreement with their staffs for having portion of their salaries placed at risk.

As pointed out by Yarahmadi and Bohloli (2015), the stakeholders of a business organisation comprise of all the individuals, which are associated with the organisation in a variety of ways. For example, the management, investors, directors, employees, customers and overall community that the organisation serves are considered to be its stakeholders. In a big supermarket like that in Australia, the directors and investors are considered generally in the form of the significant stakeholders because they are associated directly in creating the organisation along with steering the same towards a specific direction. However, they require the other individuals in increasing the efficiency and functionality of the business. For example, the staffs communicate with the customers for generating adequate business opportunities for their organisations. Besides, the ethical conduct issues in the organisations need all the associated members of the organisation in stake holding matters. For example, in terms of corporate social responsibility matters, the organisation requires the engagement of the community in order to accomplish the same.


The Australian retail sector is confronted with a variety of challenges, which mainly constitute of income and cash flows. There are few organisations, which are shifting to the other methods, so that their operating income could be increased. Such increase would assist them to cope up with the increasing competition in the sector. These challenges are deemed to have positive as well as negative effects on the consumers, retailers and the overall Australian economy. Due to these challenges, the retailers have been compelled to shut down few operations for meeting their production costs. This is identified as a negative impact, as the organisations shrink rather than accomplishing growth.

Besides, the organisations are encountered with the risk of bankruptcy and eventually, closures could occur, if the current situation does not change with the passage of time. The income sources, which the organisations are moving, seem to be effective in the short-run. This is because they would provide only temporary solutions, since the organisations need to wait for the economy to recover at a faster rate. As a result, they need to minimise their production levels, which would have influence on the customers directly. The product options for the customers would decrease when they visit the retail stores for buying products. Due to this, the impact would be negative on the economy of Australia, since it would fail to experience growth.

One positive effect of the situation in the retail sector of the nation is the fairness in competition due to the fact that the organisations feel numerous challenges throughout the overall industry. The organisations would not seek undue advantage over competition. Along with this, they would make relevant and timely disclosures of the necessary information to the stakeholders for maintaining favourable brand image in the market. Furthermore, the use of integrated reporting framework has helped the organisations in identifying the deficiencies in the business areas and accordingly, they could undertake necessary actions for minimising such deficiencies. Finally, they would involve the community to ensure that appropriate corporate social responsibility practices are in place in relation to sustainable development.


Cameron, R. A., & O'Leary, C. (2015). Improving ethical attitudes or simply teaching ethical codes? The reality of accounting ethics education. Accounting Education, 24(4), 275-290.

Canning, M., & O'Dwyer, B. (2016). Institutional work and regulatory change in the accounting profession. Accounting, Organizations and Society, 54, 1-21.

Guthrie, J., & Parker, L. D. (2016). Whither the accounting profession, accountants and accounting researchers? Commentary and projections. Accounting, Auditing & Accountability Journal, 29(1), 2-10.

Jackson, C. W. (2015). Detecting Accounting Fraud: Analysis and Ethics. Pearson Higher Ed.

Mastracchio Jr, N. J., Jiménez-Angueira, C., & Toth, I. (2015). The state of ethics in business and the accounting profession. The CPA Journal, 85(3), 48.

Mescall, D., Phillips, F., & Schmidt, R. N. (2017). Does the Accounting Profession Discipline Its Members Differently After Public Scrutiny?. Journal of business ethics, 142(2), 285-309.

Mintz, S. (2016). Accounting for the public interest. Springer,.

Voss, G. (2017). Certificate of Ethics in Accounting and Professional Independence of Accountants. European Journal of Economics and Business Studies, 9(1), 212-220.

West, A. (2018). After virtue and accounting ethics. Journal of Business Ethics, 148(1), 21-36.

Yarahmadi, H., & Bohloli, A. (2015). Ethics in Accounting. International Journal of Accounting and Financial Reporting, 5(1), 356-360.

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