Business report on financial reporting (see attachment)
ACCG224 ORAL PRESENTATION TOPIC S22020 ACCG2024 Page 1 ACCG2024 - Session 2, 2020 Individual Assignment Part I - Research Based Report (20%) Due: Tuesday 29 September 2020, 5 pm Word limit: 1,200 words Part II – Video Oral Presentation (5%) Due: Tuesday 6 October 2020, 5 pm Time limit: 4 minutes S22020 ACCG2024 Page 2 “In the current environment, the quality of financial reports and related disclosures is more important than ever for investors and to maintain confident and informed markets” (Australian Securities and Investments Commission (ASIC) 2020, p.1). The ASIC Chair, James Shipton, further added that, ‘Entities with businesses adversely affected by the COVID-19 pandemic should focus on the reporting of asset values and financial position. Investors will expect clear disclosure about the impacts on an entity’s businesses, any risks and uncertainties, key assumptions, management strategies and future prospects” (Australian Securities and Investments Commission (ASIC) 2020, p.1). According to ASIC’s media release on 7 July 2020 - 20-157MR Focuses for financial reporting under COVID-19 conditions – one of the key focus areas for the annual reports are the disclosures in the Operating and Financial Review (OFR). The media release highlights that “The OFR should complement the financial report and tell the story of how the entity’s businesses are impacted by the COVID-19 pandemic. The underlying drivers of the results and financial position should be explained, as well as risks, management strategies and future prospects.” Furthermore, according to the Conceptual Framework, the fundamental qualitative characteristics of relevance and faithful representations determine the decision usefulness of the information provided to the users of the GPFS (General Purposes Financial Statements). Given the future perspectives of the businesses that the users are interested in, it is important that companies provide as much relevant information as possible to enable them to make decisions. In light of this, on 12 August 2019 ASIC released the updated Regulated Guide (RG) 247 Effective Disclosure in an operating and financial review. The purpose of RG 247 is to assist listed companies and their directors in meeting the requirements under s299A of the Corporations Act 2001 and in providing useful and meaningful information to shareholders when preparing the OFR. You were lucky to get an internship with the Australian Securities & Investments Commission's (ASIC) Financial Reporting Surveillance Program that aims to improve the quality of financial reporting by reviewing the annual financial reports of a selection of listed companies and other significant entities, to monitor compliance with the Corporations Act and Australian Accounting Standards. The Head of the Financial Reporting Surveillance Program (your boss for the time of your internship), Zachary King*, plans for the next review round to focus on the OFR and related disclosures. For preliminary research into this matter, he asks you to provide a report which highlights the current compliance by one listed company in this regard. For this, you must research into a listed ASX300 company of your choice and identify the disclosures in terms of the OFR and potential gaps. You may review RG 247 through the following link: https://download.asic.gov.au/media/5230063/rg247-published-12-august-2019.pdf * Fictitious Name S22020 ACCG2024 Page 3 Required: You are required to write a business report to the Head of ASIC's Financial Reporting Surveillance Program, Zachary King†, covering the following areas: 1. Briefly summarise the importance of the operating and financial review in assessing how the financial information can assist users to make resource allocation decisions in light of the current COVID-19 pandemic. You may need to refer to some financial and business periodicals/newspapers for the financial impact of the crisis. (10 Marks) 2. Critically evaluate whether the disclosures made by the company are consistent with the guidance provided by ASIC in Sections B, C and D of the guide (RG 247) and whether they effectively disclose the sources of estimation uncertainty as per paragraphs 125-133 of AASB 101 Presentation of Financial Statements. (15 Marks) 3. How do the disclosures made by your chosen company in Part 2 above meet the objective of financial reporting and the fundamental characteristics of financial reporting as per the Conceptual Framework? (10 Marks) 4. Based on your analysis in Part 3, provide recommendations on how your chosen company can enhance their disclosures for the year ended 30 June 2020 so that they are more closely linked with the objective of financial reporting with specific reference to the impacts of the COVID-19 pandemic on their business. (5 Marks) You need to attach a copy of the relevant parts of the annual report showing disclosures made by the company under the OFR. Do not attach the entire annual report. To complete this assignment, you will need to select a suitable company yourself that meets the following criteria: • The company must be a constituent of the S&P/ASX 300 index (www.asx300list.com); • The company must publish audited annual financial reports in English, fully complying with IFRS or AASB standards and • The company must have a 30 June year end. • Choose the annual report for the financial year ended 30 June 2019. † Fictitious Name S22020 ACCG2024 Page 4 Assessment of report The research-based report represents 20% of your total mark for ACCG2024 and is compulsory. Your assignment will be marked out of 60 as shown in the Report Marking Rubric on page 9 of this document and will then be converted to a mark out of 20 percent. Report submission instructions Where to submit The written report must be submitted in electronic form using Turnitin (through iLearn via the ‘Business Report and Presentation’ section folder). Detailed submission instructions are provided on iLearn. Please ensure that you are familiar with these instructions and submit before the deadline in case of technical issues. A hardcopy submission is not required. When to submit Due: Tuesday 29 September 2020, 5 pm No extensions will be granted. There will be a deduction of 10% of the total available marks made from the total awarded mark for each 24-hour period or part thereof that the submission is late (for example, 25 hours late in submission – 20% penalty). This penalty does not apply for cases in which an application for Special Consideration is made and approved. How to submit The report can be submitted either in a PDF or word format. The filename of your report must be as follows: ACCG2024_XXXXXXXX (where the crosses represent your eight digit SID) S22020 ACCG2024 Page 5 Report Format Before you start writing your report, it is recommended that you undertake the following (both of these can be accessed through the ‘Business Report and Presentation’ section on iLearn): 1. Watch the e-lecture on business report writing 2. Take a look at the sample Business Research Report provided on iLearn. Structure The report must contain the following (in this order): • Report cover page (You can design your own cover page) • Table of contents • Executive summary • Introduction • Body • Conclusion • Reference list • Appendix You should include relevant parts of the annual reports that you have used and referred to in your report. Do NOT attach entire annual reports. You can include the relevant parts of annual reports as screenshots rather than copying and pasting content, since it can impact the Turnitin similarity percentage. Length Total word count limit = 1,200 words. Your word count must be included on your cover page. Included in word count Excluded from word count • Introduction • Body • Conclusion • Report cover page • Table of contents • Executive summary • Reference list • Appendix Penalties for exceeding the word limit are as follows: Word count Penalty • 1,201 – 1,319 words • 1,320 – 1,439 words • 1,440 or more words • No penalty • 10% of total marks • 20% of total marks Style The report must be presented as follows: Font: Times New Roman 12 point Spacing: 1.5 times line spacing Margins: not less than 2.5 cm S22020 ACCG2024 Page 6 Footer Each page must have a footer containing the following: ACCG2024 S2 2020 Your SID Page number Referencing In text referencing is required for all sources used and a complete list of references must be provided using the Harvard Referencing System. A copy of the Harvard Referencing System is available under the ‘Assessment Task’ folder on iLearn. Please note that as this is a research assignment it is not appropriate to reference to textbooks or lecture slides. Plagiarism All assignments will be manually and electronically checked for plagiarism and it is extremely important that you are familiar with the policy on Academic Honesty. A link to the policy is available in the ‘Business Report and Presentation’ section on iLearn. S22020 ACCG2024 Page 7 Part II – Video Oral Presentation (5%) Your boss was impressed by your report and has asked you to prepare a video presentation to be played to the senior members of the Financial Reporting Surveillance Program at their next meeting. Your video presentation should: a) Summarise the importance of the OFR especially in light of the current COVID-19 pandemic. b) For your chosen company, provide a critical analysis of the consistency of the disclosures with sections B, C and D of RG 247. c) Summarise your key recommendations to improve the disclosures so that they meet the objective of financial reporting as per the Conceptual Framework in light of the COVID-19 pandemic. Assessment of video The research-based report represents 5% of your total mark