Australian Conceptual Framework in Accounting Standard

Question: Discuss acout the Australian Conceptual Framework in Accounting Standard. Answer: Introduction: This unit will provide an understanding of Australian Conceptual Framework in accounting standard setting and its practical applicability in a commercial environment. The major purpose of this units is to make learners well versed with accounting concepts and principals applicable in Australia and its compliance by business entities. By the topics covered under this unit, I will be able to learn and understand Australian Conceptual Framework inclusive of accounting policies and standards along with its objectives and use in businesses. This study will assist me in my future as I will be able to form better business policies for my business or for the company for whom I will prevent penalties that can be imposed due to non-compliance. Further, I will also be able to develop better internal control to ensure ethics and legal framework in the accounting of operational activities. Conceptual framework refers to analytical tool with several contexts and variations. In this unit, we get to know that International Accounting Standards Board (IASB) has developed their own conceptual framework for the description of basic concepts. These standards are applicable to the preparation of financial statements in order to ensure uniformity and reliability in the information presented (Banerjee, Horridge and Vargas, 2016). In Australia, financial reporting standards are developed by Australian Accounting Standards Board (AASB). This body had also contributed to the development of global financial reporting standards. I will be able to learn Australian Conceptual Framework by studying its core principles and policies. The initial focus in this unit is focused on basic concepts as for advanced learning it is important to have a firm academic base. Thus, initially, I had cleared my basic concepts like accounting equation, double entry accounting, accounting cycle and preparation of financial statements and accounting records. I had gained this knowledge from learning of previous units, and I had practised these concepts thoroughly for a better understanding of further concepts. Now by learning accounting policies and procedures, I am shaping my accounting knowledge properly. I am applying this learning by studying financial framework of well-known Australian companies. In addition to this, I am also considering online articles on the concerned subject matter. Australian Accounting Standards are inclusive of necessities that are definite to entities operating in Australia. In accordance with the Australian accounting standards, business entities are required to prepare financial statements as per norms of Corporations Act 2001. These standards are applicable under two tiers which are as follows: Table 1: Applicability of Australian accounting standards as per tiers Tier 1 Australian Accounting Standards Tier 2 Australian Accounting Standards Reduced Disclosure Requirements This tier concept is governed by provisions of AASB 1053 and interpretations of these standards is provided under AASB 1048. In this unit, my priority was to understand the applicability of Australian Conceptual Framework on corporate entities as my aim is to become reputed financial advisor is future. For this post, I must have in-depth knowledge of financial concepts and its applicability in business situations. By considering this fact, I had focused on practical aspects of applicability, company examples instead of subjective theory. However, later I realise theoretical knowledge is the base for practical applicability. The major challenge in this unit I faced is simultaneous applicability of accounting standards for preparation of financial statements in order to show financial facts accurately. In starting classes, I was not attentive due to which now I am not able to understand some concepts. In order to resolve this issue, I will re-read the notes and study material provided to us in the unit. With this approach, I will be able to strengthen my concepts and can understand the subject matter in an efficient manner. For this, I will take help from my class fellows and mentor to resolve my doubts and for better clarifications. In addition to this, I will use secondary research to understand the concept. This will work as my strength as I will be aware of topics to make the lecture more interesting to be attentive. Furthermore, I can participate activities in academic activities to apply learnings in a proper manner. By this approach, I will be able to get good grades as well as overcome my academic weaknesses. As per my experience, various skills are required for an individual for learning in accounting. Primarily, a person must be well versed with accounting entries and double entry accounting as it is the core of the subject. If one has issues or doubts with this concept, then they can never understand further accounting concepts correctly. It is because; entire concepts are based on double entry system. Further, individual must have sound knowledge of preparation of financial statements manually as well as on software. By this, they will be able to maintain accounting records in an appropriate manner. Apart from subject knowledge, an individual must have analytical skills, communication and presentation skills and management skills (Barth, 2015). It is because they have to deal with inventory valuation, managing receivables and doubtful debts, budgeting, using of proper costing methods and managing periodic and perpetual inventory system. Feedback from the assessment is the most crucial aspect of the unit as this will let me know my weaknesses through which I will be able to identify areas on which I have to work. With the feedback, our mentor will provide us guidance to improve performance in the near future. Further, by abiding with provided recommendations I can work on my weaknesses to improve my performance and skills. In accordance with the study of Macve (2015), accounting is not about individual learnings as in real world one have to apply various concepts simultaneously in order to get desired results. This fact shows that different parts of accounting learning are strongly connected. In order to run business smoothly, entrepreneur and management is required to develop an efficient internal control. For this aspect, they are required to be aware of business concepts, ethics in accounting and regulatory framework. It is because, they are required to apply this knowledge simultaneously to develop viable business policies to achieved desired objectives. Further, this fact I also had experienced in my previous units. Previously, I was not able to make accurate depreciation entries accurately, and I ignored this fact but later in difficult problems of depreciation I completely struck. Then, my class fellow makes me understand basic concepts then he clarified my doubts. By this incident I get to know all concepts in accounting are connected in direct or indirect manner, and one should be focused while learning for better knowledge. Topics covered under this unit are directly connected to previous topics as for applicability of accounting standards it is important to understand how to record business transactions. On the basis of this knowledge, financial statements can be prepared to summarise accounting information (Henderson, Herbohn and Howieson, 2015). Further, the applicability of accounting standards is next step of learning as it assists in the disclosure of information in a proper manner. My previous concepts are clear through which I am able to understand concepts covered under this unit. However, the disclosure of depreciation is still an issue, but I am working on this by learning relevant standards like AASB 116 AASB 138 (Loyeung, Weber and Wells, 2016). My aim is to becoming a financial advisor in a reputed company and for this post, I am required to be well versed with the accounting concepts. In order to achieve my aim by learning accounting conceptual framework properly. Further, I am learning accounting software like Saasu, ERP, etc. In order to make improvement in my learning process, I will do part time job for small companies to apply my theoretical knowledge and to enhance my practical exposure in the field of accounting. Further, I will attend a seminar to know the viewpoint of experts to enhance my knowledge and to get a better vision. In addition to this, I will read online articles to get updated regarding amendments in accounting standards and its applicability on business entities. By this learning, my attitude towards accounting and commerce has been changed drastically. Previously, I think that accounting is all about figures like mathematics, but I was completely wrong. By this accounting course, I was able to understand accounting is about several policies and procedures to assist businesses in recording transactions in an appropriate manner. Further, this information assists stakeholders in making rational decisions to enhance profits and to achieve their desired objectives (Henderson, Herbohn and Howieson, 2015). For future, I am planning to apply for masters in accounting in a renowned university for enhancement of my skills and knowledge. I will also do a part time job to gain practical experience in accounting field. By this, I will be able to get proper growth in my career to achieve my dream. In addition to this, I will also learn accounting software to enhance my efficiency in accounting work. I will participate in academic activities to develop my interpersonal skills in order to become a good manager as well as a leader. By this approach, I will be able to overcome my identified weaknesses and to get prosperous future. References Banerjee, O., Horridge, M. and Vargas, R., 2016. A Conceptual Framework for Integrated EconomicEnvironmental Modeling. Journal of Environment Development, 25(3). Pp.276-305. Henderson, S., Herbohn, K. and Howieson, B., 2015. Issues in financial accounting. Pearson Higher Education AU. Macve, R., 2015. A Conceptual Framework for Financial Accounting and Reporting: Vision, Tool, Or Threat?. Routledge. Loyeung, A., Weber, J. and Wells, P.A., 2016. The cost of implementing new accounting standards: The case of IFRS adoption in Australia. Barth, M.E., 2015. Financial Accounting Research, Practice, and Financial Accountability. Abacus. 51(4). Pp.499-510.