Research proposal: Improved financial reporting for small organizations in Australia
Financial reporting is the process of presenting an organization’s financial statements, which are significant in the analysis of the organization’s financial progress (Deegan, 2009). This process is relevant because the information retrieved from it is of use to shareholders and other organizations like lending institutions and investment companies. Financial reporting is essential to any organization because a financial manager can be able to perform a comprehensive assessment of the organization. This assessment puts is emphasis on the organizations profits, losses, liabilities, assets and the organizations source capital among other things.
Financial reporting, therefore, should be prioritized by any organization if the organization aims to grow (ICAA, 2012). The process of improving financial reporting involves the implementation of advanced techniques and tools while preparing financial statements and reports. In addition, this can be aided by the initiative by human resource managers to employ qualified personnel with the necessary expertise. The process of financial reporting for internal use can also be investigated. This is because in most cases, internal financial management and reporting is usually left to the management instead of the low and mid-level management
The issue of financial reporting originates because in many countries it is usually a requirement by law for organizations to provide financial reports (Mallesons, 2008). Apart from the law, it is also a requirement by different organizations that have a monetary relationship with the organization. This is because for lending institutions such as banks, all documentation representing the financial progress of an organization is usually a requirement for capital acquisition. In addition, investors and shareholders also require the organizations financial reports so that the decisions they make are well informed.
Therefore, there is a need in many organizations for a credible and reliable financial report that reflects the organizations actual progress (ICAA, 2012). This problem brings about the necessity by organizations to employ reliable techniques and financial experts in the crucial process of preparing financial reports. The lack of a credible financial report is usually ear marked by the presence of independent auditors. In addition, some organizations usually rely on electronic methods of preparing financial reports, which in most cases gives rise to poorly prepared financial reports. These methods are usually associated by the finance community to unreliability and illegality.
This research is based on improving financial reporting for small organizations. However, there has been an early attempt to investigate this matter by Ray in 1980. This study attempted to produce evidence on the manner in which financial reporting appears to change in a small organizations. In addition, another similar study expressing broad concern in financial reporting of small organizations was carried out by McMahon and Davies in 1991. This study was aimed at proving that improved financial reporting practices are beneficial to small organization in terms of enhanced business growth and performance. In this research, we will attempt to expand on this useful information.
- To evaluate the financial reporting system for small organizations in Australia
- To determine the reliability of the financial techniques used by small organizations in Australia in comparison with the financial accounting standards
- To asses the financial performance of small organizations in Australia
This research aims at answering the following questions in relation to financial accounting of small organizations in Australia.
- What is meant by improved financial reporting?
- How does improved financial reporting affect the performance of a small organization?
- How do small organizations in Australia achieve improved financial reporting?
This research is classified as a quantitative and a descriptive research proposal. It is a descriptive research because it aims to provide a description of what causes poor quality of financial reporting. On the other hand, it is qualitative because it aims to describe the data and characteristics involved in financial reporting why at the same time explaining the reason for the situation. Therefore, qualitative technique models are more applicable in this research compared to other conventional models. The information gathering techniques in this model includes direct observation and open-ended interviews as well as in-depth interviews.
The expected results from this research proposal are numerous.
For instance, it is expected that the quality of financial reporting practices be
related to the size of the organization. Another expected result is that financial
reporting practices are improved in small organizations as compared to large
Deegan, C. (2009). Australian financial accounting. North Ryde, N.S.W: McGraw-Hill.
ICAA, . (2012). Charters accountants financial reporting handbook 2012 + auditing and assurance handbook 2012. John Wiley & Sons (Aust) Ltd.
Mallesons Stephen Jaques (Firm). (2008). Australian finance law. Sydney: Lawbook Co.