Accounting standards is one of the basic concepts that consist of various standards, principles and procedure related to financial accounting rules and practices. In earlier times most organisations is having a problem in handling their large financial transactions because of not having proper accounting methods. As time passes, accounting system has change more drastically which will lead to manage their operations in more effective manner (Bradbury and Schröder, 2012). This project analyses use of accounting standards within companies like Westpac group. It is one of the largest banking organisations in Australia. The primary objective behind this report is to examine relationship between accounting standards and performance of company.
“To analysis the impact of accounting standards upon company’s performance. A case study on Westpac group”.
Q: Define concept of accounting standard?
Q: What are the implications related with accounting standards?
Q: Explain the influence of accounting on firm’s performance?
Q: Access the correlation of accounting with company productivity?
According to this research proposal, literature review is happens to be most critical aspects through which views of various authors can easily be examine. In fact, it is associated with present information that is based on analytical and theoretical nature of given topic.
Concept of accounting standards
According to Donelson, McInnis and Mergenthaler, 2012, accounting concepts are related to general assumption and rules those are work as basis of recording financial transaction and preparing accounts. It is important for Westpac group to make use of right concept while analysing its financial information. They could have numerous options such as accrual, conservatism, matching, materiality, going concern concepts and so on. All these are effectively helpful in delivering best outcome for company (Miah, 2019).
Implication related to accounting standards
In view point of Wang, (2014), it is important for organisation to have accounting standards so that chances of errors can be avoided while evaluating position of companies. The implication of the IFRS accounting standards in the company helps in strengthen the overall harmonization in the domestic and reporting framework of the company and helps in keeping the transparency in the recorded books of accounts. The main objectives of the implication of the accounting standards in the company is to ensure transparency, consistency and reliability of financial statements. There are some key accounting implication like expected credit loss, fair value impact on financial assets and consolidation of subsidiaries. It basically poses specific challenges to entire society of users those are related to financial data such as regulators, investors and credit rating agencies. They used to examine each and every data and take valuable decision based on non-conventional reporting (Newberry, 2015).
Impact of accounting standards on company performance
Pacter, (2014), states that regulators as well as accounting society are more concern with design or change related to accounting standards to attain financial reporting objectives. It has been seen that high quality standards are supposed to have positive affect firms reporting pattern and to be of maximum value to people of financial accounts. It is analysed that Australian firms have been mandated to use IFRS as its financial reporting and also align their reporting framework with the implication of the GAP rules. This will help to control performance employed in analysing profitability through using return on equity, liquidity using total deposit made by company. By the adoption of IFRS or IAS for every firms and incorporation of accounting standards rule in professional training and suggest right measure to manage its statements.
Relationship among accounting standards with organisation management
In the opinion of Chuk, (2012), accounting is specific ways a business keeps regular focus on their operations. The accountants tend to analyze business finance so the owner could make effective decision. However, with the consistent amendments accountants of the company also needs to align their accounts books as per the amended reporting framework. This data is being organised into reporting that provide financial position of Westpac. It will also assist in business owners to fulfil their compliance obligation. It is analysed that relationship between accounting and management is directly correlated to each other. Management aimed to take action, whereas financial accounting focuses on investment use of data. Company used to analyse all its accounting data and after that take necessary decision to implement appropriate strategies that can provide maximum benefit for the company. The responsibility of accounting with management is primary aspects and in fact in relation to most accounting authorities to be principal. Since, decision and action of management are equally directed towards particular objectives so that productivity of company could be maintained for long time (Peach, and Garg, 2019).
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