Adelaide Brighton Limited

The research report should be a maximum of 1,300 words (excluding executive summary, references and any appendices).
The preparation of notes should be a maximum of 200 words.

Issue to be investigated: Cutting the clutter in financial reports

You have recently been appointed as a graduate accountant in a company listed on the ASX200, and are currently reporting to the Chief Financial Officer (CFO). (Note: You will be assigned your specific company in Week 1 tutorial). – Adelaide Brighton Limited

In recent years, there has been a growing concern about the increasing complexity of financial reports. Corporate boards face a tremendous challenge where they need to clearly communicate key information to various stakeholders whilst ensuring efficient use of firm resources.
In 2014, KMPG revealed a report* showing that many organizations have started to ‘cut the clutter’ in financial reports by:
i. Removing immaterial disclosures
ii. Re-ordering and re-labelling accounting policy and detailed notes
iii. Re-writing technical wording into plain English
* KPMG (2014). Cutting the clutter: Review of recent financial report de-cluttering trends in the ASX 200. KPMG: Australia, October.

Specific requirements and guidelines:

Part 1. Prepare a research report to the CFO and the Board of Directors. In this report, you are to research the issue and critically evaluate the first and third aforementioned suggestions (i.e., removing immaterial disclosures and re-writing technical wording into plain English) to ensure clarity and reduction of clutter in financial reports with reference to the Conceptual Framework for Financial Reporting. In supporting your discussion, you may link your discussion to other theories covered in Weeks 1 to 3 in this unit, if relevant and applicable. Support your position and discussion with reference to academic articles.

(65 marks)

 Word limit is 1,300 words for this section (excluding executive summary, references and any appendices).
 Use a minimum of six academic articles.

Part 2. Obtain the latest annual report for your allocated Australian publicly listed company. Choose two (2) disclosure items in the ‘Notes to the financial statements’ from the following: leases, provision for employee entitlements/long service leave, intangible assets and impairment of assets.

Prepare a note, re-phrasing the two disclosure items that you have chosen, into plain English. Your audience for this task are users of financial statements who may not have the requisite accounting and finance skills. You are required to attach a copy of the two notes that you have re-written into plain English for your allocated company.

(10 marks)

• Word limit is 200 words for this section.
• Students who fail to supply the relevant notes sections of the financial statements with their research report will receive a penalty of 1 mark out of 20. (Please note: We do not want the entire annual report submitted).

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