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This task requires you to prepare a report to evaluate and comment on information provided in the annual report of a company listed on the Australian Stock Exchange (ASX). Your comments or evaluation should comply with the requirements of relevant Australian Accounting Standards (AASBs).

“Social accountability is considered in the (AASB Conceptual) Framework as part of the objectives of general purpose financial reports (GPFR).”


In this report, you should address the points outlined below:


1) Provide your comments regarding the aforementioned statement. Explain. 

2) Based on the analysis of Australian financial regulatory framework, explain why it is necessary to establish and develop AASBs in Australian business practices.

3) Examine what types of information are provided in the annual report of your chosen company. 

4) Explain what are the incentives for the managers to disclose certain type of information in the annual report. 

5) In your opinion, from the perspective of the investors and securities market, discuss how the investors or securities markets will react to the disclosures of certain information provided in the annual report, which are discussed in item 3), or in other sources. Provide appropriate evidence to demonstrate your arguments.

Importance of AASB in Business Practices

Emirates Company is the best company to be evaluated in addressing the concerned issues since the firm is substantial with adequate information regarding financial reporting aspects. The company is listed on the Australia Stock Exchange and therefore its application would be relevant internationally. Some of the key issues discussed in this report include but not limited to the importance of developing AASB in business practices, identification and evaluation of the data provided on the end year reports of Emirates Company, the motive of the managers to disclose some of the data in the annual report, personalities regarding securities market and investors and lastly comments regarding the statement integrating social accountability and the formulation of the general purpose financial reports.

1.Based on the analysis of the Emirates Annual, this report can’t hesitate to mention the fact that AASB Conceptual Framework hits the reality by displaying social responsibility as one of the major objectives of financial reporting. Most companies report their business operations with the aim of illustrating corporate social responsibility. Emirates makes use of the annual reporting program to express its relation to the public. The company has released reports in 2016 and 2017 to display various initiatives undertaken to enhance environmental sustainability (Cdn.ek.aero. 2018). The company in this case takes advantage of the 2017 being the year of sustainable tourism for development among the united nations. 2016-2017 is was a year of several economic, political and social operations in the United Nations which drove fundamental issues in the client’s travel industry. Therefore, the company had to build its reputation through displaying its concern on corporate social responsibility. The company claims to be more concerned with investing in the people as a strategic plan of improving the company resilience, and resources efficiency. The company claims to have been at pace in replacing various vehicles in Dubai and various regions across the world with a primary aim of minimizing the emission of carbon iv oxide in the air. Countries in which electronic ground equipment have been deployed in airport operations include but not limited to Netherlands, UK, US and Singapore. Emirates states that its social accountability is not limited to supporting the community but extends to the sustainable management of the business operations. As obtained from the annual report, Emirates has played a fundamental role in enhancing the welfare of the people with disabilities in the community. Additionally, the company is focused of enhancing financial literacy in the communities served. Emirates has offered employment opportunities to more than 103, 363 staff across more than 160 countries across the globe (ke.linkedin.com. 2018). The company strengthen the community and develops the quality of life through intensive investment in the community. Therefore, the presence of such information in the annual report of emirates company proves the reality of the AASB Framework statement (Corporate Accountability is one of the objectives of annual reporting).

2.Establishment and development of AASBs across the business operations in Australia is fundamental. The AASBs requires all the companies to provide the general purpose financial statements indicating the financial position of the firm, cash flows and the performance of the firm.  The importance of providing this information is to enable the owners of the business, creditors, regulators, investors and other relevant parties to make decisions regarding the allocation of the scares resources within the company. Therefore, development of the AASBs is relevant to ensure all the companies adhere to the accounting standards. Such an ideology is significant to enhance proper comparison of organizations in the market area. Therefore, adhering to the accounting standards helps the investors and other stakeholders both internally and in the external environment to make eloquent decisions regarding the business.  Financial statements display the social responsibility of the company. In such a case, different companies may fail to record facts and get biased to emphasize on corporate social responsibility. Therefore, there is a need to develop AASBs that will track the company operations such to ensure the information recorded in the annual report is reliable.

Evaluation of Emirates Company's Financial Reporting

3.The type of information contained on the annual reports include financial statements. The four major financial reporting include cash flows, balance sheet, income statement, and the statement showing changes in equity (Cdn.ek.aero. 2018). Usually, a balance sheet indicates the financial position of a business. A balance sheet is used by the business owners and investors to tell the ability of a farm to pay off all the liabilities without intervening the personal income of the business owners, managers or investors. Following the information provided on the annual report of Emirate Company, the farm is worthwhile (capable of paying all the debts). From the balance sheet indicated on the income statement, an accounting equation is derived whereby Equity is provided by the summation of liabilities and total assets. Mathematically, this expression is presented by owners’ equity = total assets + total liabilities.

A part from the balance sheet, the annual report contains a profit and loss account which is made up of the expenditure side and the revenue side. The income statement indicates the profitability of the business. Following the information on the annual report, Emirates company is profitable shown by a positive net revenue (Statista.com. 2018). The income statement also expresses the growth of a business. Emirates company is good for investors having expressed an increase in the total revenue when the report is compared to that of the previous year.

The company also contain a cash flow statement which indicates the cash outflows and the cash outflows within the firm. The cash flows indicate the liquidity of the business. In this case, the cash flow statement tells weather the business is capable of dealing with the daily operations or not. Emirates Company is capable of meeting the daily operations due to a higher rate of inflow compared to the outflow rate in the company.

The company indicates an increase in the equity following the statement indicating changes in the owners’ equity. Therefore, the business in this case encourages more investors as the company expresses accountability to the capital invested by the owners. The investment in this case is promising and reliable. Finally, the managers of the business dint hesitate mentioning corporate social responsibility initiatives of the business. The ideology has boosted the reputation of the company.

4.There exists diversity of motives that triggers managers to disclose the kind of the information in the annual reports. Firstly, most managers are after the reputation of the company. In this case, the managers are aware that a good picture to the company is popularity and success of individual leadership to the entire society. Therefore, the managers are after popularity through expressing the social responsibility perspectives of the company. Secondly, most managers are paid a commission upon improvement on the total revenue and the profitability of the firm. Therefore, most managers are motivated to indicate the profitability and growth of the company.

5.All the information provided on the annual report attracts a good reaction from the investors. Most investors look after an organization that exercises high level of corporate social responsibility. In this report, Emirates has brought forth its initiatives regarding environmental conservation and concerns regarding the disabled people. Investors are also attracted by profitable organizations just as expressed within the income statement of the Emirates Company. Thirdly, investors are pleased with an organization which is going concern. An organization is only able to operate continuously if its capable of meeting all the daily activities just as expressed by the information regarding the cash flows of the Emirates Company. Owners’ equity is very significant. Just as obtained from the balance sheet and the statement of changes in equity, investors are likely to be pleased by the organization since the organization is promising to provide higher returns on the invested capital.

This report has been faced with a challenge regarding the time limit and word count. Therefore, I would recommend further evaluation of the contents within the report to come up with a detailed and more extensive evaluation of the financial reporting of Emirates Company. Additionally, this research is a sample evaluation and backbone of further studies of most of the Companies Listed on the Australian Stock Exchange. Furthermore, this report suggests for development in the AASBs to ensure all the companies across the country adhere to the accounting standards for better decision making on the allocation of the scares resources. The information in this report is helpful internationally having studied a substantial Company listed on the Australian Stock Exchange.

References

Cdn.ek.aero. (2018). Emirates 2016-2017 annual report. [online] Available at: https://cdn.ek.aero/downloads/ek/pdfs/report/annual_report_2017.pdf [Accessed 16 Sep. 2018].

Cdn.ek.aero. (2018). Emirates 2017-2018 annual report. [online] Available at: https://cdn.ek.aero/downloads/ek/pdfs/report/annual_report_2018.pdf [Accessed 16 Sep. 2018].ke.linkedin.com. (2018). Emirates. [online] Available at: https://ke.linkedin.com/company/emirates [Accessed 16 Sep. 2018].

Statista.com. (2018). Emirates Group-Operating profit between FY 2009/10 and FY 2017/18 (In billion United Arab Emirates dirhams). [online] Available at: https://www.statista.com/statistics/300223/operating-profts-of-emirates/ [Accessed 16 Sep. 2018]

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My Assignment Help. (2021). Emirates Company: AASB Framework, Financial Reporting, And Corporate Social Responsibility Essay.. Retrieved from https://myassignmenthelp.com/free-samples/busn8181-financial-reporting-and-analysis/emirates-company.html.

"Emirates Company: AASB Framework, Financial Reporting, And Corporate Social Responsibility Essay.." My Assignment Help, 2021, https://myassignmenthelp.com/free-samples/busn8181-financial-reporting-and-analysis/emirates-company.html.

My Assignment Help (2021) Emirates Company: AASB Framework, Financial Reporting, And Corporate Social Responsibility Essay. [Online]. Available from: https://myassignmenthelp.com/free-samples/busn8181-financial-reporting-and-analysis/emirates-company.html
[Accessed 19 July 2024].

My Assignment Help. 'Emirates Company: AASB Framework, Financial Reporting, And Corporate Social Responsibility Essay.' (My Assignment Help, 2021) <https://myassignmenthelp.com/free-samples/busn8181-financial-reporting-and-analysis/emirates-company.html> accessed 19 July 2024.

My Assignment Help. Emirates Company: AASB Framework, Financial Reporting, And Corporate Social Responsibility Essay. [Internet]. My Assignment Help. 2021 [cited 19 July 2024]. Available from: https://myassignmenthelp.com/free-samples/busn8181-financial-reporting-and-analysis/emirates-company.html.

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