Reflective essay

This essay mainly record the learning outcome and learning experience of previous 11 weeks of ACCG 399. I classified it into two categories: one is about corporate governance, another one is about ethical behavior.

Corporate governance means the responsibility and practices exercised by the boards of directors and senior management of an organization in order to achieve the strategic objective and manage the risks raised during the operation. The two aims of the corporate governance are conformance and performance. The topic from week 2 to week 5 and the topic from week 7 to week 9 are involved in this part. Week 2 & 3 topic talks about the influence of regulatory environment, political agenda on accounting practice and the relevant conceptual framework and accounting standards setting. Week 4 & 9 topic covers the content of performance measurement of organization and individual, and the various rewarding choices to employees. Week 5 topic describes the trend of trying to find a global explanation of accountants’ behavior. Week 7 topic focuses on tendency of international accounting convergence in a globalised world and week 8 topic is about issues raised from management control system.

I think the first two topics are relative basic and easy to understand. In week 2, I have learned the main body that create and enforce accounting regulation of Australia which it includes ASIC, AASB, FRC and ASX. AASB is responsible for develop conceptual framework and ASIC is responsible for administering such regulations. FRC deals with decisions that Australian reporting entity would adopted and ASX mainly set out the listing and trading rules. Even though a comprehensive regulation system has been set up, opinions that prefer ‘free-market’ perspective were put forward which means that the market will determine the optimum supply of information. In my opinion, a market without regulation may lose control and fall into inefficient operating situation since some person take advantage of rights that rise from free-market to make profit for themselves illegally. A humanized and comprehensive regulation system can benefit the market in various areas. Week 3 topic identifies various accounting theories developed from different period. The importance of developing accounting theory includes the evaluation of sustainability of current practice and to develop improved accounting practices. There are three theories: normative theoretical, positive accounting theories and conceptual framework that were applied from 1960 to nowadays. The recent useful theory is conceptual framework which is developed by IASB and FASB with the objective of financial reporting and the qualitative characteristics and constraints of decision-useful financial reporting information. The conceptual framework makes the accounting standards more consistent and logical, and also adapts the tendency of international compatibility of accounting standards.

Topic of week 4 and week 9 is relatively close to our life as it covers the content of performance measurement of individual and organization, and also includes the rewarding methods of employees. In week 4, the method of “truly” measurement of organization’s asset was changed from previous historical cost method to current value method. The historical cost method can not reflect the inflation of price level and exchange rate. Current cost accounting mainly includes Current Purchasing Power Accounting, Current Cost Accounting and Continuously Contemporary Accounting. But this method still exist various problems that need to be overcome. Week 9 topic provides performance measurement method in another perspective. ROI, RI and shareholder value are the main valuation factors that applied. ROI is a financial measure of the performance of an investment centre which considers both the profit and the capital invested. RI is the amount of profit remaining after subtracting the imputed interest charge.