This reporting season may not provide much of a guide to future earnings numbers, but will provide some insight into how the companies are coping with, and responding to, the biggest challenge [COVID-19] the corporate sector - and the wider economy - has experienced in at least 30 years." Stephen Bartholomeusz Senior business columnist The most important, and meaningless, reporting season in history The Age August 10, 2020

Assume you are a winter vacation intern at the Melbourne office of an international accounting firm and have been assigned by a partner of the firm to a team that will produce for the partner a business report about the ASX listed companies: Nick Scali Limited, JB Hi-Fi Limited, Cochlear Limited and Virtus Health Limited. Specifically, the partner asks the team to write a report that:

i.     explains:

·        any four accounting policies common to all four companies used in the preparation of their financial statements;

·        the changes in accounting policies used in the financial statements prepared by the four companies (if any);

·        how significant events after the reporting period have been treated in the financial statements and the notes to the financial statements by the four companies (if any);

·        the role of materiality in the preparation of the financial statements and the notes to the financial statements of the four companies;

    ii.       identifies the approaches taken by the four companies to reporting in the financial statements and the notes to the financial statements on the effects of COVID-19 on current and future operations;

  iii.        evaluate the usefulness of this information to users of the financial statements and the notes to the financial statements of the four companies. The evaluation must include identification of whether the team finds the provided information strengthens or weakens the usefulness of the financial statements and the notes to the financial statements; and

  iv.        provides three recommendations that could be implemented by accounting standard setters to improve the quality of reporting by companies.  

Prior to writing the report, you will:

·        first, reflect on the comments of Bartholomeusz;

·        second, read the 30^th June 2020 corporate reports issued by Nick Scali Limited, JB Hi-Fi Limited, Cochlear Limited and Virtus Health Limited Transurban, with a particular focus on the financial statements and the notes to the financial statements.

·        third, undertake necessary research - including relevant parts of the Corporations Act 2001, relevant accounting standards, newspaper and other media reports and scholarly articles. In addition, you will need to read the AASB Conceptual Framework for Financial Reporting May 2019 CHAPTER 1—THE OBJECTIVE OF GENERAL PURPOSE FINANCIAL REPORTING and CHAPTER 2—QUALITATIVE CHARACTERISTICS OF USEFUL FINANCIAL INFORMATION

Answer rating: 100% (QA)

What are Accounting Policies Accounting policies are rules and guidelines that are selected by a company for use in preparing and presenting its financial statements Accounting policies are important ... View the full answer