Application of the Reporting Entity Concept in Australia

For decades, the reporting entity concept has been the foundation of differential reporting in Australia. Those entities classified as ‘reporting entities’ are, prima facie, required to produce full GAAP‐based financial reports while other (non‐reporting) entities are generally able to produce less complex and shorter ‘special purpose’ financial reports. In recent years, the application of the concept, as originally set out in the Statement of Accounting Concepts (SAC) 1 Definition of the Reporting Entity, has been criticized on several grounds—particularly, that it does not yield the reporting outcomes originally intended by regulators. Our analysis of 1,546 companies lodging financial statements with the corporate regulator in Australia (ASIC) shows the principles‐based criteria in SAC 1, designed to indicate the existence of a reporting entity, do not systematically explain its application by entities. Our findings are relevant for policy makers, researchers, and regulators concerned with how these choices might be more effectively regulated in future and whether this is best done through principles‐based or rules‐based approaches.     

Practical Problems In The Reporting Entity Concept

The concept of a reporting entity has been introduced into financial reporting in Australia through a number of statements and standards. These documents require reporting entities to prepare so-called general-purpose financial reports which comply with all statements of accounting concepts and accounting standards, whereas non-reporting entities are not bound to the same level of compliance. Unfortunately, little authoritative guidance on interpretation and application of the reporting entity concept has come from either the Australian Accounting Standards Board or the Auditing Standards Board, despite the fact that the reporting entity concept has applied since 30 June 1992. The solutions proposed here may be temporary, given that the Corporations Law could be amended. It would be in readers' interests to consider any further authoritative guidance which might become available.     

Definition of the Reporting Entity

Harmonisation between Generally Accepted Accounting Principles and Government Finance Statistics is the highest priority for Australian public-sector reporting. This paper addresses the question of the reporting entity in a harmonised GAAP-GFS framework and discusses whether the GFS General Government Sector meets the criteria for the general-purpose reporting entity. The objective of harmonisation is to achieve an Australian accounting standard for a single set of government reports which are auditable and comparable between jurisdictions, and in which the outcome statements are directly comparable with the relevant budget statements. Since there is widespread interest in General Government Sector information by users, the sector is the obvious candidate for the government general-purpose reporting entity.     

The Business Model in Integrated Reporting: Evaluating Concept and Application

A key feature of the International Integrated Reporting Council's (IIRC) agenda to improve corporate reporting is to encourage companies to use Integrated Reports to disclose their underlying business models. However, extant research suggests that the IIRC's distinctive business model concept is not well understood. This paper aims to unpack and critically evaluate the core features of the IIRC's business model concept. To unpack the IIRC's business model, the paper conducts a structured comparative analysis of the IIRC's model against eight influential alternatives in prior business model research. The paper then evaluates the extent to which Integrated Reporting's distinctive business model is: (1) internally coherent and consistent; and, (2) consistent with the IIRC's broader reporting objectives. The paper identifies tensions in both these areas. Since the IIRC's business model is central to its agenda to improve corporate reporting, these tensions are relevant to both Integrated Reporting research and broader discussions about whether, or how, disclosing business models advances mainstream reporting frameworks.     

The True And Fair View: A Study Of Australian Auditors' Application Of the Concept

A fundamental requirement of Australian corporate reporting is that financial statements be "true and fair". This paper describes the history of the true and fair requirement in Australia, considers various meanings which have been attributed to the concept and examines the merits of eliminating the qualitative standard of the true and fair view. Special attention is given to auditors' definitions of the term, and how they design their audit testing of truth and fairness, as distinct from compliance with applicable accounting standards and other statutory disclosure requirements.     

Beyond Redemption: The Reporting Practices Of Unlisted Property Trusts

The deterioration over recent years of the Australian real property market brought the focus of public attention on to the investment entities which manage holdings of real properties. Concerns grew particularly about the stability and liquidity of unlisted property trusts. Some of the worries related to asset valuations and whether the balance-sheet representations of trusts' real property reflected likely recoverable amounts. These concerns were realised on 23 July 1991 when the Federal Government announced a 12-month freeze on redemptions from all existing unlisted property trusts. The significance of the financial reporting policies of unlisted property trusts is amplified when their size is considered: for the quarter ending 30 June 1991, assets under management in unlisted property trusts which were members of the Investment Funds Association of Australia (IFA) totalled $6.7 billion. This article describes a survey of unlisted property trusts' general-purpose financial reports.     

User Requirements for Not-For-Profit Entity Financial Reporting: An International Comparison

This study investigates the not-for-profit (NFP) external financial reporting regulatory environments of the US, the UK, Canada and New Zealand and compares them with that of Australia. It finds a lack of clarity in the definition of a NFP entity under Australian accounting standards. The study also identifies various types of information that earlier research and the guidance in other countries suggest are useful to the users of NFP entities' financial statements. This information is not currently required under Australian accounting standards.     

User Requirements for Not-For-Profit Entity Financial Reporting: An International Comparison

This study investigates the not-for-profit (NFP) external financial reporting regulatory environments of the US, the UK, Canada and New Zealand and compares them with that of Australia. It finds a lack of clarity in the definition of a NFP entity under Australian accounting standards. The study also identifies various types of information that earlier research and the guidance in other countries suggest are useful to the users of NFP entities' financial statements. This information is not currently required under Australian accounting standards.     

构建多层次资本市场助推经济结构转型

当前在资源短缺和环境保护的条件约束下,在全球金融危机的背景下,中国经济靠高投资率和外需拉动增长的模式已经难以持续,这加大了中国经济结构调整和经济增长方式转型的压力;同时,世界金融危机和世界经济下滑为中国企业提供了利用两个市场实现要素重组的机会。     

The Credibility Of Australian Financial Reporting: Are The Co-regulation Arrangements Working?

Credible financial reporting is hard to achieve without an accounting regulatory system. In Australia a system of co-regulation has evolved, based on collaboration between the federal government and its agencies and the accounting profession. Compared with overseas systems, the Australian approach to regulation has unique as well as derivative features. Is the system working effectively for the delivery of dependable, internationally comparable financial reports that make reporting entities transparent and enhance investor confidence?     

周小川:从经济学家到央行行长

周小川,这位前中国证监会主席在2002年底被宣布为新任央行行长,从而接替戴相龙.与2000年年初出任证监会主席一样,都是在没有形成公众预期的情况下宣布的.其实仔细想来,这种任命也是很符合逻辑的.学者出身的周小川,在金融圈的名望和影响力是勿庸置疑的.作为经济专家型人才,他既有很好的教育背景,又有很高的学术成就,再加上曾履职国家体改委、外经贸部、中国银行、中国人民银行和证监会,这些当然有助于其更加胜任央行行长这一专业性很强的岗位.     

Financial Reporting BY Local Government And The Disproportionate Requirements Of AAS 27

This paper discusses the economic characteristics, and related financial reporting issues, of goods and services provided by local government. These goods are grouped into three categories: public, private, and mixed public/private goods and services. Modified cash-based reports are found to be proper for government units that provide public and mixed goods, and accrual-based accounting is appropriate for units that provide private goods. When the provision of mixed goods and services by local government is not mandatory, the disclosure of the market value of the assets employed in producing these goods or services is also warranted.     

面对风云变幻迎接财务报告挑战

2002年12月12日,在美国注册会计师协会全国会员代表大会上,美国财务会计准则委员会(FASB)主席Robert H.Herz先生作了主题为“面对风云变幻迎接财务报告挑战”的演讲,介绍了FASB正在从事的改进美国的财务报告质量的工作和即将采取的一些主要措施。现将其主要内容概述如下: FASB面临的客观现实2002年发生的上市公司财务报告系列造假丑闻,严重动摇了投资者对财务报告质量和资本市场的信心。虽然大多数问题主要来自于上市公司恶意违背市场规则,管理当局蓄意舞弊,审计工作和公司治理明显失败,投资银行家、证券分析师虚假误导,但是这…     

银行公司治理之路

作为特殊的公司,商业银行的公司治理倍受各方关注,20世纪90年代以来,完善商业银行公司治理,规避金融风险的呼声日益高涨.特别是东南亚金融危机以后,各国纷纷做出完善本国商业银行公司治理的努力.在东南亚,新加坡金管局要求商业银行必须设立提名委员会,提名委员会需包括5～7名董事会成员,且该委员会成员必须经金管局批准.该委员会主要确定和审查董事会成员,以及管理层、薪酬、审计和其他委员会的提名和任命.印尼银行规定在每家银行内部必须任命"合规稽核官",直接负责审计商业银行是否符合印尼银行审慎性规定,合规稽核官必须具有独立性并承担责任;此外,印尼银行详细阐述了"合适和适当"(fit and proper)测试,要求所有董事会员和某些高级管理行政人员必须通过这一任职资格型测试.     

Statutory Budgetary and Financial Reporting by Australian Universities

A review of reporting practices in 1998 suggested that New South Wales universities were systematically breaching requirements for the publication of budgets in their annual reports, since the coverage of published budget documents did not encompass all financial transactions reported in financial statements. A government funding agency has required universities to present operating statements in a standard format. But the definitions used in these instructions lead to understatement of spending on administration by not counting expenditure incurred in faculties, schools or departments. It is argued that the combination of reporting practices based on government instructions and the failure of NSW universities to comply with state legislation has led to the production of accounts which are of limited usefulness to key stakeholders.     

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