ACCT3601 Global Financial Reporting: Qantas Airways and Woolworths
You are a senior research associate at Globa136ol, one of the largest and the best global consulting firms. One of your responsibilities is to prepare a report to answer clients’ queries on corporate reporting matters.
You have been approached by a US client who is quite keen to understand current global financial reporting practices. The client is interested expanding his investment portfolio to include international corporations, including a couple of Australian companies — Qantas Airways Ltd. and Woolworths Group Ltd. He is, however, concerned about some of their reporting practices and has asked you to prepare a summary report to address the following questions:
1. There are quite a lot of commentaries about preparing financial statements in accordance with US GAAP or IFRS. Does it matter which accounting standards companies apply? That is, should I worry that Qantas and Woolworths both use IFRS instead of US GAAP?
2. I have also heard that even if companies are using the same accounting standards to calculate their statutory earnings, they can also include non-statutory (i.e., non-GAAP) earnings in the annual report. Now, that is confusing— just look at the Qantas 2021 annual report! Why is that allowed and how can I tell whether these figures are relevant to me?
3. Another issue for me is the concept of segment reporting. I know that it is required by the accounting standards, both US GAAP and IFRS. What I want to know is whether looking at segment information can provide me any additional information? I mean, companies seem to pick and choose segments to report each year—for example, look at Woolworths 2020 and 2021 annual reports!
4. So, do you think I should invest in Qantas Airways Ltd. and Woolworths Group Ltd.?
In providing answers to the above questions, your summary report should adopt the following format:
• Presentation matters—consider what and who the report is for. Include short introduction and conclusion paragraphs to the report.
• Use in-text referencing and include a reference list, if any (i.e., bibliography).
• Use Times New Roman (or equivalent) Font 12 or larger, and 1.5-line spacing.
• Your report must comprise fewer than 1,000 words (excluding a reference list). Writings beyond the word limit will not be marked.