Accounting Approaches Comparison

Number of Words : 2060

Number of References : 8

Assignment Key : A-19745

Contents

  • Content for this assignmentIntroduction 3
  • Content for this assignmentCorporate Governance 4
  • Content for this assignmentThe requirement for Corporate Governance in United Kingdom 5
  • Content for this assignmentTotal Compliance Approach and KPI Reporting 6
  • Content for this assignmentKPI Reporting 6
  • Content for this assignmentKPI Reporting and Reliability 7
  • Content for this assignmentApproaches by Timothy Martin 7
  • Content for this assignmentConclusion and Recommendation 7
  • Content for this assignmentObjectives of the managers 7
  • Content for this assignmentTrading by the Insiders 8
  • Content for this assignmentWorks Cited 9

Description

This report is based on the following requirement -
There are 2 conflicting views on the subject of Accounting Regulation:
Total compliance and common, mandatory reporting
Or
A softer approach allowing companies to decide what shareholders need to know about their company
Tim Martin, Chairman and founder of JD Wetherspoons plc, said the following in the Chairman’s Statement within the 2014/15 Statutory Accounts
“ Modern annual reports are far too long and are often almost unreadable. They are full of semiliterate business jargon, including accounting jargon, and are cluttered with badly written and incomprehensible governance reports. The limitations of corporate governance systems should be recognised. Common sense, management skills and business savvy are more important to commercial success than board structures. All the major banks and many supermarket and pub companies have recently suffered colossal business and financial problems, in spite of, or perhaps because of, their adherence to governance guidelines. There should be an approximately equal balance between executives and non-executives. A majority of executives is not necessarily harmful, provided non-executives are able to make their voices heard. It is often better if a chairman has previously been the chief executive of the company. This encourages chief executives, who may wish to become chairmen in the future, to take a long-term view, avoiding problems of profit-maximisation policies in the years running up to the departure of a chief executive. A maximum tenure of 9 years for non-executive directors is not advisable, since inexperienced boards, unfamiliar with the effects of the “last recession” on their companies, are likely to reduce financial stability. An excessive focus on achieving financial or other targets for executives can be counter-productive. There’s no evidence that the type of targets preferred by corporate governance guidelines actually work and there is considerable evidence that attempting to reach ambitious financial targets is harmful. It is far more important for directors to take account of the views of employees and customers than of the views of institutional shareholders. Shareholders should be listened to with respect, but caution should be exercised in implementing the views of short-term shareholders. It should also be understood that modern institutional shareholders may have a serious conflict of interest, as they are often concerned with their own quarterly portfolio performance, whereas corporate health often requires objectives which lie 5, 10 or 20 years in the future”
Required:
• With a view to Accounting Regulation, critique Tim Martin’s opinion. You may want to make reference to the following elements of the Accounting Theory and Practice Unit:
• KPI reporting
• The Conceptual Framework
• Narrative Disclosure
• Corporate Governance
• Social and Environmental Accounting

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