Question

make the artice about the current trends of corparate reporting

Answer 1

Current Trends of corporate reporting:

Contents:

1. Introduction
2. Need
3. Aspects of corporate accounting

• Detail information about Corporate accounting & it's annual and financial reports
• Reporting of Intangibles
• Triple bottom line(TLB) Reporting
• Corporate environment reporting
• Human resource accounting(HRA)
• Corporate social responsibility(CSR)
• Forensic accounting

Introduction:

In olden days, Business or trade was carried out in a small scale.The activities then were confined or restricted to local areas.

   However years passed by, trade and commerce have crossed the local frontiers and the globalization has turned the whole world into small village.

   The volume of trade required the pooling of resources Viz. capital which have alternate use. so retaining the trust and sustaining the shareholders trust is an entity in a critical phase in a corporate world.

Why corporate reporting?

Corporate financial reporting is an essential activity for all businesses. This form of accounting should provide investors and creditors with useful information that they can employ in making lending or investment decisions.

• Day to day control
• Answerability medium
• Responsibility statements
• Compulsory disclosure

A key component in corporate reporting is an annual corporate report. What is an annual report? It is a comprehensive report intended to give information to shareholders and other interested people about a company's activities and financial performance throughout the preceding year. Most jurisdictions require companies to prepare and disclose an annual corporate report, and many require each annual report to be filed at the company's registry. Companies listed on a stock exchange are required to engage in corporate reporting at more frequent intervals (depending on the rules of the stock exchange involved).

Typically, an annual report will include:

•Chairman's report (Note: whether the person is a woman or man, business convention is to use the title "chairman.")

•CEO's report

•Auditor's report on corporate governance

•Mission statement

•Corporate governance statement of compliance

•Statement of directors' responsibilities

•Invitation to the company's AGM

Annual company reports should also include financial report statements including:

•Auditor's report on financial statements

•Balance sheet

•Statement of retained earnings

•Income statement

•Cash flow statement

•Notes to the financial statements

•Accounting policies

Other information deemed relevant to stakeholders may be included in an annual report. This may include corporate reporting on operations for manufacturing firms or corporate social responsibility reporting for organizations with environmentally or socially sensitive operations. For many larger companies, the annual corporate report will usually be presented as a sleek, colorful, high gloss publication.

Different aspects of corporate reporting:

• Reporting of intangibles
• Triple line bottom reporting
• Corporate environment reporting
• Human resource accounting
• Corporate social responsibility
• Forensic accounting

1) Reporting of intangibles: "An intangible asset is an identifiable non-monetary asset, without physical substance, held for use in the production of supply of goods or services for rental to others or for administrative purposes, which can generate future earnings of benefits".

Intangible assets value management is mandatory as per IFRS 3 march 2004.

Intangible assets constitute 75% to 90% of total assets. So company's worth is represented by intangible assets rather then physical and financial assets.

Eg: Computer software, patents, Copyrights, marketing rights.

2) Introduction to Triple Bottom Line (TBL):

to cape up with the situation of global warming and to induce the corporations to preserve the environment by reporting not only financial and social practices but also their environment friendly practices.

What is TBL?

• First bottom line stands for financial performance of company.
• Second bottom line stands for CSR.
• Third bottom line stands for environmental protection practices of the business.

Features of TBL:

• Accepting accountability
• Being transparent
• Integrated planning and operations
• Committed to stakeholders engagement
• Multidimensional measurement & reporting.

3)Human resource accounting:

American accounting association committee defines HRA as

• "The process of identifying and measuring about human resources and communicate the information of to interested parties."
• OBJECTIVES:    provide feedback to managers.         

                                       to plan manpower.

                                       to boost morale and loyalty of employees

4) Forensic Accounting(FA):

Meaning

Forensic accounting means, belonging to, used in or suitable to courts of judicature or to public discussion, debate and ultimately dispute resolution.

In wide sense it can be said as the integration of accounting, auditing and investigative skills to obtain a particular result.

Reasons for the growth of forensic accounting:

• Problem of internal audit management
• Rotation of statutory auditors
• The certificates of the auditors are hardly scrutinized carefully, especially when teh reports and unclean and qualified.
• Internal auditors can surely detect what was happening but they are hardly in a position to initiate proper action in proper time.

CASE STUDY OF FA:

Situation:

Swenson was engaged by high ranking government official to investigate the misappropriation of funds from multiple entities over a 3 year period.

Swenson Solution:

The swenson forensic team analyzed the company's records and identified all material transactions with related entities. Swenson determined that funds were misappropriated through fictitious/fraudulent payroll activity, altered checks, and debt forgiveness granted to certain customers. Once the team discovered the misappropriation of funds , the employee was interviewed, confessed to the misappropriations and was terminated swenson assisted legal counsel in the prosecution/restitution process.

Results

> Chief Financial officer gave a written confession leading to termination.

> Assisted the company with the placement of a new chief Financial officer.

> New Internal controls were implemented.

> Strict confidentiality maintained throughout the process.

5) Corporate social responsibility

• "Every company shall, in the report of its board of directors, disclosed briefly the particulars of steps taken or proposed to be taken towards adoption of clean technologies for prevention of pollution, waste minimization, waste re-cycling and utilization etc.,

IMPORTANCE :

1) Towards employees

2) Towards consumers

3) Towards Govt

4) Towards Owners