Essay On Accounting Theory And Westpac Financial Report Analysis." (70 Characters)

Discuss about the Accounting Theory, The analysis of the Westpac Financial Report involved analysis of the financial report for the company was evaluated by analyzing the financial position of the company.

About Westpac Banking Corporations

There have been many issues, situations faced by the major companies of the Australia Banking system, and the relevant accounting standards followed by the company were discussed in the assignment. The report will currently aim and discuss about the current issues of the accounting and the relevant characteristics of the accounting standards followed by the company (Atkinson 2018).

  It is important for discussing the background of the company and the same has been evaluated in the assignment. The Westpac Banking Corporation also known as the Westpac Company; the Australia Banking company is located and headquartered in the Sydney. The company provides financial advisory and services primarily in the finance and insurance sector and consumer banking services, and other corporate financial services such as investment banking services, global wealth management and other private equity related services. The company provides various kinds of financial services and the different services of the business are divided into various subsidiaries divisions of the company (Finizio 2018).

The scope of the accounting principles were assessed in order to identify the accounting principles and policy followed by the company in the preparation of the financial statement and relevant reports (Athanasiou 2015).

The Westpac Banks along with the other major banks in Australia have been under the review of the Royal Commission for intense scrutiny about the various issues reported against the company. There were various instances when the banks used to charge fees by the customers when the banks used to not provide services for the same. The company claimed that the same happened due to some technical errors and failures in the operational process of the work (Schaltegger and Burritt 2017).

The Royal Commission based on the charges is now scrutinizing the issues and charges faced by the company and issues raised are being discussed in several round of hearings.

The analysis of the Westpac Financial Report involved analysis of the financial report for the company was evaluated by analyzing the financial position of the company. The profitability of the company had remained over the last quarter and the changes in the profit level has been observed in the company due to the falling customer base (Berry, Broadbent and Otley 2016).

While analyzing the financial report of the company it was clear that they might face some litigation issue and have to make provisions and pay other fees. The company may also issues related to the administrative actions and other actions taken by the company which can result in disruptions in the operations of the bank.

The primary sources of generation of revenue for the company is the income earned from the fees and other kind of services charge revenue earned by the company for the various kinds of services provided by the company. The company has followed the Australian Accounting Standard Board and the Corporation Act, 2001 for preparing the financial statements of the company and the relevant financial statement has been made in accordance with the same (Granof et al. 2016).

Conceptual Framework

The proportion of fees and commissions earned by the bank were inconsistent and the volatility in the numbers presented by the company shows inconsistency in the same. The issues and charges faced by the company were discussed and included in the financial statement of the company. The bank had a good base of customers in the year 20154-16 but the same has fallen significantly in the recent years. The financial report of the company should be having some general and necessary qualitative characteristics like relevant accounting informations and data and the same be presented in a faithful way so that the shareholders can timely make relevant decisions on the same.

The company had included relevant information based on the accounting principles followed by the company but should also include relevant information of the current issues and the operations related information on the annual report of the company. The financial or the annual report presented by the company though is clear, as the company has given enough informations and facts about the company (Libby 2017). The financial report of the company were presented in a comparable way which can be compared by the investors of the company so that the same can be applied for the decision making by the investors or the stakeholders of the company. The company should also include recent activities and charges faced by the banks in the terms of the operation issues faced by the company due to investigation faced by the Royal Commission (Maas, Schaltegger and Crutzen 2016).

The auditors of the company and the relevant informations had verified the financial report of the company and data presented by the company has been crosschecked. The informations and data presented by the company should be relevant and faithful enough so that the same can be applied in the decision making process. The companies should include and maintain an accounting policy thereby showing sustainability and smoothening of the annual profits or the income generated by the company (Almujamed et al. 2017).

The stock price of the company and the movement or the changes in the stock price of the company reflects the market opinion on the stock price. The market reflection and the perception of the investors is reflective of the indicative stock price in the market, which represent the current and forecasted information and news on the company. If the forecast for the company is forecasted to be sound and reflects growth in the earnings estimate for the company then the same will be reflected in the terms of the higher share price. Issues and information related to the company plays a significant role in determining the share price of the company (Hyndman et al. 2018). The share price of the company has followed drastically in the last one year, which has been due to the current issues and charges faced on the company by the Royal Commission. The share price in the last year had fallen for the company in the last year and the improvement in the same cannot be done and may further fall if the charges and other operational issues comes into play for the bank (Müller 2015).  

Analysis of the Westpac’s Annual Report

The Financial informations and data presented by the company play an important prospect in determining the investors forecast for the company. The company should include relevant financial data and other various informations about the company so that the same can be applied in decision-making process of the stakeholders of the company.  The share price of the company has fallen from 31.28 during December 17 and the share price has fallen to around 24.07 during December 18.

Conclusion

The analysis of the accounting and the relevant principles followed by the company in the preparation of the financial statement of the company were discussed. The major findings of the company included major findings about the accounting policies followed by the company and the relevant accounting principles followed by the company. The current issues faced by the company and the analysis of the same was included and the impact the same has on the financial statement of the company. The financial performance of the company was also assessed in the assignment and the movement of the share price of the company was assessed in the report. The movement in the share price of the company and the relevant interpretations of the same were included in the report.

The financial performance of the company has been volatile and non-sustainable and the stock price of the company has been falling since the last year after the company started facing issues related to the fees and services charge they are charging to the customers of the bank. The company has not disclosed all relevant financial informations and news related to the company. Thus, overall from a financial feasibility view pointy the company would not be recommended for investment perspective giving the uncertain business environment and various other factor which can hamper the operations of the work.

Reference

Almujamed, H., Tahat, Y., Omran, M. and Dunne, T., 2017. Development of Accounting Regulations and Practices in Kuwait: An Analytical Review. Journal of Corporate Accounting & Finance, 28(6), pp.14-28.

Athanasiou, A., 2015. Acounting for tax: To deal or not to deal at arm's length. Taxation in Australia, 50(2), p.99.

Atkinson, R., 2018. The Banking Royal Commision and the price of everything. HERDSA Connect, 40(3), p.24.

Berry, A.J., Broadbent, J. and Otley, D.T. eds., 2016. Management control: theories, issues and practices. Macmillan International Higher Education.

Finizio, A., 2018. Aboriginal justice: The true cost of aboriginal incarceration-the case for justice reinvestment. Bulletin (Law Society of South Australia), 40(4), p.22.

Granof, M.H., Khumawala, S.B., Calabrese, T.D. and Smith, D.L., 2016. Government and Not-for-Profit Accounting, Binder Ready Version: Concepts and Practices. John Wiley & Sons.

Hyndman, N., Liguori, M., Meyer, R.E., Polzer, T., Rota, S., Seiwald, J. and Steccolini, I., 2018. Legitimating change in the public sector: the introduction of (rational?) accounting practices in the United Kingdom, Italy and Austria. Public Management Review, 20(9), pp.1374-1399.

Libby, R., 2017. Accounting and human information processing. In The Routledge Companion to Behavioural Accounting Research (pp. 42-54). Routledge.

Maas, K., Schaltegger, S. and Crutzen, N., 2016. Integrating corporate sustainability assessment, management accounting, control, and reporting. Journal of Cleaner Production, 136, pp.237-248.

Müller, S., 2015. Pay for Performance? Relationship between CEO incentive compensation and future stock price performance in DAX and MDAX companies.

Schaltegger, S. and Burritt, R., 2017. Contemporary environmental accounting: issues, concepts and practice. Routledge.