Reference no: EM132514886 , Length: word count:2000

ACCT2006 Financial Reporting - Curtin University

Choose Ansell Limited or Advance Nanotek Limited company

Part 1: Presentation of financial statements

Instructions

In your pairs (on-campus students), you will have already chosen an ASX listed company. Your assignment will require the comparison and analysis of their last two published annual reports.
You will therefore need to obtain copies of their two most recently published annual reports. Depending on when your chosen company publishes their reports, these may be the reports for 2016-17 and 2017-18; or 2017-18 and 2018-19.
Your analysis will be presented in report format. You will need to use Excel, Word and finally PDF to prepare your report.
1. Requirement one - preparation in excel (Total of 5 marks, based on completeness, accuracy and correct format of your presentation)
Once you have obtained the two annual reports, transfer their income statement, balance sheet, statement of changes in equity and statement of cash flows into an excel spreadsheet.
1a) Prepare an excel spreadsheet with these financial statements. Ensure that the statements are formatted in a professional and attractive manner.
1b) Use formulas in excel to verify that the totals shown in the financial statements have been correctly calculated.

2. Requirement two - analysis in word

Once you have transferred the financial statements and notes into excel, you will then prepare a report (using Microsoft Word, or a similar word processing program) which analyses some aspects of these reports.
Your report must be formatted in a professional and attractive manner1. Further, your report must follow the conventions of report formatting2.2a) Provide the reader with an introduction to the company you are analysing. This introduction should provide the reader with a basic understanding of what they do, which industry they operate in, the company information and when their financial statements are prepared. As a minimum, we are looking for you to tell the reader the company the industry is in, when it was formed, what their structure is, what its market capitalisation is and who their auditors are.

2b) Identify both the time period for which the reports refer and when the reports were published.

2c) Identify the figures provided in the older of the two reports (e.g. if you downloaded FY2018 and FY2019's annual reports, the older of the two reports would be FY2018). These figures will also be stated in the newer report, so that you can compare the results between the most recent and the second most recent year3. Compare the figures as stated in both reports4. Are they the same? If not, you must identify the differences. If there are differences, provide reasons for why they have been changed. In excel, you should make comparison of the two columns by using one column to minus the other to demonstrate the ‘differences'. A separate extraction of the specific year's results is recommended in answering this question.

2d) Provide a reconciliation note for your company's most recent retained earnings account balance (if a business does not have positive profit, they may report ‘retained losses' instead). This information can be found and extracted from the statement of changes in equity. The purpose of this note is to explain what the balance of the retained earnings account was at the start of the period, what caused it to move up or down and thus demonstrate how it got to the ending balance.

Your analysis should provide both the reconciliation note, as well as a written explanation of the note.

Your assessment
In light of the recent media exposure of wage theft by some large corporations (such as Woolworths Group, Coles, 7-Eleven and more), it appears that in some businesses, there is a structural and cultural problem which is leading to staff being underpaid.
This is in contrast to the public statements made by many of these large businesses (especially those that are listed on the Australian Stock Exchange), declaring that they value their employees.

For example, in their 2019 CSR report, Woolworths wrote the following:
"Our team members are key to the success of our business, including our ability to build retailers of the future by attracting, retaining and motivating team members with diverse skills, capabilities and backgrounds. To achieve a Customer 1st, Team 1st mindset, team members need to feel empowered to drive change at pace consistently with our culture to continue to learn and develop."
- Woolworths CSR report p.34, 2019

There is an apparent inconsistency between the images which companies present in their CSR reporting and their actual business practices. From time to time, corporate behaviour does not match stakeholder expectations. These include responsible companies acting irresponsibly and previously notorious companies attempting to redeem their reputation by doing good deeds.

Requirements

Whilst many are quick to denounce corporate misbehaviour, one should seek to understand their possible reasons for engaging in questionable conduct.

Requirement 1:
Examine the annual reports of Woolworths over the last seven years (2013 to 2019). Assuming that they underpaid staff by a total of $315 million and assuming that these underpayments were evenly spread over the seven year period from 2013 to 2019, calculate an adjusted gross profit and adjusted net profit figure for each of those seven years based on correct payment of their staff. Present the reported profit figures side by side with the adjusted profit figures in order to allow for easy comparison.

Requirement 2:
Consider the negative consequences to Woolworths of their behaviour. How has the company been made worse off as a result of underpaying their staff and to what extent? The more valid items you document, the better. Where applicable, provide references and calculations to support your claims.

Requirement 3:

Do not ignore the suggested reading list, but conduct your own research into the issue of employee pay. Citing examples, identify other demographic, social or cultural groups who have been unfairly compensated for the work they perform. How many people are affected? To what extent are they affected? Does this issue affect only unskilled, casual workers? Or does it also affect professionals and those on salaries?

Attachment:- Financial Reporting.rar