Free Essay

Differences Between Aasb Framework and Ed164

In: Business and Management

Submitted By tranminhtam1984
Words 7040
Pages 29

This report is prepared in response to the exposure draft ED164 titled ‘An improved Conceptual Framework Financial Reporting: The objective of Financial Reporting and Qualitative Characteristics and Constraints of Decision-useful Financial Reporting Information.’ released by Australian Accounting Standard Board (AASB).

Four major differences have been identified between the AASB’s current Australian Framework for the Preparation and Presentation of Financial Statements and ED 164 are identified. In Current Australian Framework financial report are prepared from a proprietary perspective whereas in ED 164 they are prepared from an entity perspective. The boards decided to identify present and potential capital providers as primary users for General Purpose Financial Report (GPFR) whereas the Australian Framework lists the users of GPFR as investors, lenders, suppliers and other trade creditors, employees, customers, governments and their agencies and the public. Besides, The boards have also decided on a broad enough objective that encompass all the decisions that equity investors, lenders and other creditors make in their capacity as capital providers, including resource allocation decisions as well as protection and enhancement of their investments whereas the other one focus on provide information to wide range of users in making economic decisions. In addition, the ED 164 has categorised the qualitative characteristics – fundamental, enhancing and pervasive constraints – while the Conceptual Framework merely lists the qualitative characteristics.

Narrowly regarding the issues in chapter 2, we agree with ED164 that relevance and faithful representation as fundamental qualitative characteristics. Importantly, classification of comparability verifiability, timeliness and understandability as enhancing qualitative characteristics are appropriate and sufficiently defined in ED164.

Besides that we acknowledge that materiality and cost are pervasive constraints for financial reporting. Generally they are appropriately identified and sufficiently defined for them to be consistently understood by the preparers and the users.

However with respect to the changes, we realized that some of the changes made are not substantially different between the existing conceptual framework and ED164. In order to improve the practice of accounting, we strongly recommend that companies do take into consideration of their Corporate Social Responsibility (CSR). In reviewing the trade-off between relevance and faithful representation still exist even after the change of term from ‘reliability’ to ‘faithfully representation’, we suggest that the board should provide better clarification on when one should be made more important than the other. This will help the preparers to prepare financial reports in a more consistent manner besides assisting users in understanding the financial report.

In approaching this report, we discussed as a team about the given issues by expressing and elaborating our opinions for and against the issues. Aside from sighting the Conceptual Framework and ED 164, the internet was mainly used as a means of gathering resources to support our opinions


The purpose of this assignment is to demonstrate the differences between current conceptual framework and exposure draft 164 (ED 164) released by Australian Accounting Standards Board (AASB) titled ‘An improved conceptual framework for financial reporting: An objective of financial reporting and quantitative characteristics and constrains of decision-useful financial reporting information ’

The main focuses will be in response to the questions raised in ED 164 besides other relevant issues such as Corporate Social Responsibilities. The study will also include whether the changes in Exposure Draft 164 would improve the practice of accounting in general or financial reporting in specific. On the other hand, the non-substantive differences will be evaluated and proposed changes that can be made to improve accounting practices will also be discussed.

The result of the group’s discussions and research done to support our opinions will all be captured in this report.

2.0Chapter 1: The Objective of Financial Reporting

2.1Difference # 1

In ED 164, the boards have decided that the preparation of financial reports should be from the entity’s perspective as opposed to the Australian Framework that outlines the use of the proprietary perspective (AASB 2008, p15; p25-26).

As defined, ‘entity perspective’ is where economic resources provided by capital provider become resources of the entity. In exchange, capital providers are granted claims on the economic resources. Financial reporting from the entity perspective involves reporting on the entity’s economic resources and the capital providers’ claims on those resources (AASB 2008, pp25-26).

In contrary, ’proprietary perspective’ suggests that the resources of the equity capital providers remain their resources (and not the resources of the entity) because the entity does not exist separately from its owners. On the other hand, lenders and other creditors provide resources in exchange for claims against the resources that would otherwise accrue to the benefit of the owner. Essentially, this reduces the owners’ equity in the resources associated with the reporting entity. Financial reporting from the proprietary perspective then involves reporting on the owners’ assets, owners’ liabilities to the lenders/other creditors and the net residual owners’ equity in the reporting entity (AASB 2008, p26).

2.1.1The Case For and Against Entity Perspective

We agree that information from entity perspective is more reflective of the entity’s financial performance and position as it is not narrowed to only the equity providers. As lenders, other creditors and equity providers are seen as a collective group - capital providers - financial reporting is more reflective and useful to all capital providers as it shows the performance and position of the entity with regards to solely the management of the economic resources it controls. Financial reporting is also less bias towards owners under the entity perspective (AASB 2008, p15).

However, reporting from entity’s perspective may result in the exclusion of useful additional financial information that previously was included to cater to the information needs of equity investors or to another group of capital providers for example, Earnings Per Share which was included to aid decision making of potential equity providers regarding investments in the entity (AASB 2008, p15). If this is the case, we see that financial reports will lose relevance as it may lose usefulness for decision-making (AASB 2008, p35). Furthermore, capital providers, especially smaller investors (but collectively may be influential to the entity) will not have the expertise to conduct a more thorough and elaborate analysis on financial reports that now does not report according to their perspectives.

Besides, as we understand, the reporting entity is the ‘supplier’ of information while the users (capital providers) ‘demand’ information. Therefore, it is illogical for an entity to supply information from its perspective rather than supplying information according to the demand (ie. needs of capital providers). As a result, financial reporting from the entity perspective may be irrelevant to capital providers (ie. too much or insufficient information that meets their information needs) (Deegan 2007, p.43-46).

In summary, it appears to us as a team that the entity perspective should be adopted because it is more applicable to all capital providers and financial reporting will not be biased towards owners. But, we would recommend that although the entity perspective is applied, financial report preparers should bear in mind to include information that will aid decision-making of equity providers, lenders and other creditors. Essentially, we are suggesting a merge between the entity and proprietary perspective. Therefore, relevance of financial reports can still be maintained.

2.1.2Improvement for Accounting Practice in General and Improvement for Financial Reporting in Particular

In general, reporting from the entity’s perspective simplifies accounting practices as financial report preparers now only need to provide financial information reflecting financial performance and position and this would not include information that reflects the perspective of the equity investor, or capital providers for that matter. However, as previously argued, excluding information that aids decision-making for capital providers can reduce relevance of financial reports, hence it does not improve financial reporting.

2.1.3Usefulness to Users

As earlier discussed, the adoption of entity perspective that involves the exclusion of financial information that are directed to equity providers and other capital providers reduces the usefulness of the financial report. On the other hand, it appears that the adoption of proprietary perspective will result in the possible biased reporting towards the owners. Therefore, to increase usefulness of financial reports to users, the entity perspective should be adopted, but information that aids decision making for equity providers, lenders and other creditors should not be precluded.

2.1.4Best Interest of the Australian Economy

If financial reports are prepared without biasness under the entity perspective and prepared with information that aids decision-making for equity providers, lenders and creditors, this will mean cost saving for these groups because financial reports are more understandable and aid effective and efficient decision-making.

With a more relevant and smoother flow of information, especially financial information between reporting entities and financial users, the Australian economy can be well supported with the smoother flow of investments and injection of capitals.

2.2Difference # 2

The boards decided to identify present and potential capital providers as primary users for GPFR whereas the Australian Framework lists the users of GPFR as investors, lenders, suppliers and other trade creditors, employees, customers, governments and their agencies and the public (AASB 2004, p12; AASB 2008, p16).

2.2.1The Case For and Against Categorisation of ‘Present and Potential Capital Providers’ as Primary User Group for GPFR

It is important to identify the primary user group because it avoids the framework from being abstract and vague as it enables the standard focus on capital providers in the objective and other parts of the conceptual framework (AASB 2008, p27).

In our opinion, capital providers are most influential to the entity and they also bear the most consequences or losses (especially in the case of liquidation/administration). This is supported by the boards idea of “present and potential capital providers having the most direct and immediate interest in an entity’s ability to generate net cash inflows and management’s ability to protect and enhance capital providers’ interests”. Hence, it is logical to classify them as primary users of financial reporting information (ED 164 2008, p28).

In addition, we summarised that there is a strong relationship between the capital providers and the core operations of the entity. For example, without loans and capital, an entity cannot operate efficiently. On the other hand, if the core operations of the entity fails, the capital providers suffer. In contrast, users such as employees, customers and environmentalists are interested in the non-core functions of the company. Table 1 gives examples of core and non-core operations of the company (Group Discussion 2008)

Environmental activities
Social Contributions
Table 1: Core and Non-Core Operations (Group Discussion 2008)

As it is illustrated, the environmental and social issues, for example, stream from the core operations of the company, but they are not core operations themselves. In saying that, it is therefore proper to identify capital providers as the primary user group of GPFR due to their direct interest in the company’s financial performance and position (Group Discussion 2008).

In line with Holcim Group Support’s opinion, we agree with their opinion that although it seems highly logical to categorise the capital providers as the primary user group, there appears to be significant differences between the information needs of current and potential shareholders (who bear the ultimate risks of an entity) and those of other capital providers (eg. lenders). For example, shareholders are more interested in financial information which relates to the returns on their investments while creditors are more interested in the ability of the entity to repay its loans. With this distinction in information priorities, it is perhaps a good option to create a hierarchy among the ‘capital providers’, with the needs of current and potential shareholders given the most priority in the financial statements since they bear the most risks of an entity. Following that is the needs of other capital providers such as lenders (Holcim Group Support). This further emphasises the need for financial reports to include financial information that meets the needs and aids decision-making of both equity providers and lenders/other creditors.

While the primary user group has been identified, this raises our concerns that information needs of other groups who are also interested in the financial information of an entity. Although the boards claim that the information needs of ‘other groups’ are not neglected, but we deem it true only if the ‘other groups’ require only financial information (ED 164 2008, p28). However, some needs of groups especially customers, employees, environmentalists and trade unions will not be met as financial reporting is now solely focused on the presenting the financial position and performance of an entity with regards to the management of economic resources that it controls. As we have identified, there is a high risk of ignoring reporting on environmental and social impacts of the entity’s operations which is becoming more important.

The importance of Corporate Social Reporting (CSR) will be discussed further in question 3.

2.2.2Improvement for Accounting Practice in General and Improvement for Financial Reporting in Particular

By having a primary user group in place, it does improve accounting practice and financial reporting as generally, accounting practices and financial reporting are directed towards the needs of the primary user group. However, as there may be a negligence of other user groups’ information needs such as environmental impacts, financial reporting may now be insufficient hence reduced relevance, especially in an environment where social and environmental issues are becoming increasingly important.

2.2.3Usefulness to Users

For non-capital providers, financial reporting may now be less useful. Although they are not neglected, but because they do not fall into the primary group, information may not be sufficient to meet their information needs as non-capital providers.

However, for capital providers, the usefulness still depends on whether the report is prepared based on entity perspective of proprietary perspective, and this has been discussed in the earlier section.

2.2.4Best Interest of the Australian Economy

Overall, this change will work in the best interest of the Australian economy as there will be an increased efficiency in the allocation of resources by capital providers. This is largely due to the increased effectiveness and relevance in financial reporting as there is more focus and direction if a primary group of users is identified. With sufficient and relevant information to users, especially current and potential capital providers, this will increase the confidence of capital providers to inject funds into a company. The stable inflow and outflow of capital (less volatility) will indirectly lead to a more stable economy in the long-run.

2.3Difference # 3

The boards have decided on a broad enough objective that encompass all the decisions that equity investors, lenders and other creditors make in their capacity as capital providers, including resource allocation decisions as well as protection and enhancement of their investments. In contrary, the current Australian Conceptual Framework states that the objective of financial reports is to provide useful information to a wide range of users in making economic decisions (AASB 2004, p13; AASB 2008, p30).

2.3.1The Case For and Against The New Objective

Initially, in agreement with Joan Reekie, we found it logical if the objective of financial reports should focus on only one group of users – the equity providers. This is because parties such as management, debt holders and taxing authorities have the contractual rights to command the preparation of financial reports to meet their information needs (Reekie 2008).

However, as we have previously agreed that that the capital providers are the primary user group and this provides a basis of which objectives and the other parts of the framework is formed, it is then important that the objective formed relates to capital providers and not ‘wide range of users’ (ED 164 2008, p27). Furthermore, to maintain consistence in our opinions, we have earlier concluded that financial reports should be prepared in the entity perspective, but with information catered for the information needs of equity providers, lenders and other creditors.

Next, we believe that the objective should be broad enough to cover interests of all capital providers to avoid conflict of interests between equity providers and lenders/other creditors. Also, this will avoid biasness, for example, reporting as if investors are more important than lenders, or vice versa (Deegan 2007, p92-102).

In addition, sometimes capital providers can have a strong influence on the management’s operating and financing decisions. For example, bondholders often have contractual rights to approve or block particular actions of management that may affect the bondholders’ investments. Also, investors have the free will to reallocate resources anytime (AASB 2008, p30). With such influence on the entity which constitutes their reliance on financial reporting information, it is ideal for the objective to be made broad enough to encompass all decisions that equity investors, lenders and other creditors make in their capacity as capital providers.

Besides setting the objective vis-à-vis capital providers, which is relating to decision-usefulness of financial reports, the objective of financial reporting should not exclude discharging of accountability of management for the custody and safekeeping of the entity’s resources (ie. Stewardship function). This will enable effective assessment of management’s performance. It is vital that this objective regarding stewardship be made of equal importance because the management’s decisions are as important as the results of their decision (financial performance). Having this understanding will help users of the financial report to understand how the management has arrived at a certain level of financial performance or position (AASB 2008, p29; CA 2008, Freudenberg & Co. Kommanditgesellschaft 2008).

2.3.2Improvement for Accounting Practice in General and Improvement for Financial Reporting in Particular

Financial reporting will reflect the entity’s performance and position in a neutral way, unbiased to any particular group with an objective that is broad enough to cover capital provider. Furthermore, having stewardship as an equally important objective will demand more responsibility in decision-making by the management as they are aware that their decisions and results of their decisions can be thoroughly evaluated.

2.3.3Usefulness to Users

Having the objective that is board enough ‘to encompass all the decisions that equity investors, lenders and other creditors make in their capacity as capital providers, including resource allocation decisions as well as decision made to protect and enhance their investments’ will increase the usefulness of financial reports to the users rather than ‘to provide useful information to a wide range of users in making economic decisions’. The latter has a range that is too vague and too wide. With more direction in the former, preparers of financial reports can keep track of what information should be included to aid decision-making of capital providers.

Ultimately, usefulness to users increases as capital providers as a whole are able to assess and make decisions based on the information prepared for purpose of aiding the process of their decision-making.

2.3.4Best Interests of the Australian Economy

With increased usefulness, relevance and adequacy in information prepared for (potential and current) capital providers to analyse and make decisions regarding their investments in a company, the process of decision-making becomes more efficient. Hence, this will overall contribute to the smoother flow of capital injections which stimulates the economy.

Higher transparency on management custody and safekeeping ability at the management levels will also increase confidence levels and give greater assurance to capital providers that their investments are well-managed.

With such stability and transparency in the system, this will contribute to the overall stability of Australia’s economy.

3.0Chapter 2: Qualitative Characteristics and Constraints of Decision-useful Financial Reporting Information

3.1Difference # 4

Under the Australian Framework, the qualitative characteristics are listed as understandability, relevance, materiality, reliability and comparability. However, in ED 164, the qualitative characteristics are categorised into fundamental qualitative characteristics (relevance and faithful representation), enhancing qualitative characteristics (comparability, verifiability, timeliness and understand ability) and pervasive constraints (materiality and cost).

Fundamental qualitative characteristics are relevance and faithful representation, while enhancing characteristics are comparability, verifiability, timeliness and understandability. Compared with the current framework, reliability is now replaced with faithful representation. The reason is so that the board can convey its intended meaning of reliability more clearly. For example, some focus on verifiability or free from material error to the virtual exclusion of the faithful representation aspect of reliability. Other focus more on faithful representation, perhaps combined with neutrality (AASB 2008, p47). Hence besides replacing reliability with faithful representation, the board also explicitly identified freedom from material error as a component of faithful representation and removing verifiability as a component of it (AASB 2008, p47). Verifiability now becomes a separate enhancing qualitative characteristic.

The ED now classifies materiality and cost as pervasive constraints on financial reporting. Thus, compared with the current framework, balance between qualitative characteristics and timeliness is removed (AASB 2008, pg 59).

Both Concepts Statement 2 and the ED define constraint similarly. However, Concepts statement 2 describes materiality as a constraint on financial reporting that can only be considered together with the qualitative characteristics, especially relevance and faithful representation. The ED, meanwhile, extends the concept by considering materiality pertinent to all of the other qualitative characteristics. (AASB 2008, pg 59) The board also concluded that materiality is a consideration for individual entities and their auditors, not standard-setters, because something material can be assessed only in relation to a particular reporting entity’s situation. (AASB 2008, pg 60)

The current framework’s discussion of benefits and costs focuses primarily on the difficulty of conducting cost-benefit analyses for financial reporting requirements. (AASB 2008, pg 60) Meanwhile, the board concluded that the proposed framework should commit standard-setters to seek information from constituents about their expectations of the nature and quantity of the benefits and costs of proposed standards and to consider that information in their deliberations. In other words, the improved framework should go further in the area of assessing benefits and costs than the existing frameworks do. (AASB 2008, pg 71)

3.2Are qualitative characteristics appropriately classified?

There has long been confusion about how qualitative characteristics relate to each other. Therefore, the boards proposed that the qualitative characteristics should be distinguished as fundamental or enhancing, depending on how they affect the usefulness of information (AASB 2008, pg 69).

As the objective of financial statements is to provide useful information to capital providers and help protect and enhance their investments, characteristics that are directly instrumental to this usefulness should then be considered fundamental. Among the qualitative characteristics i.e relevance, faithful representation, understandability, timeliness, comparability and verifiability, we find it true that faithful representation and relevance play the most important role in determining the information’s usefulness. This is because if information is understandable, comparable, timely and verifiable, but not reliable and relevant to its users’ decision making process, then the information is not useful at all (AASB 2008,pg 69).

On the other hand, if information is reliable and pertinent to investment and credit decisions, and at the same time, it has characteristics of being verifiable, timely, comparable and understandable, then the usefulness of that information is certainly improved. Thus, verifiability, timeliness, comparability and understandability alone could not make information useful, but together with relevance and reliability, they certainly enhance the latter (AASB 2008, pg 69).

However, we find that most of the information that is faithfully represented should be verifiable in the first place. Thus, verifiability being deemed as an enhancing characteristic could be quite a repetition as it naturally flows from faithful representation in our opinion.

3.3Are relevance and faithful representation sufficiently defined?


Relevance is defined as being capable of making a difference in the decisions made by users by having predictive value, confirmatory value or both (AASB 2008, pg 44).

In order for relevance to be consistently understood, it must be defined such that it is capable of influencing decision-making process. When information has confirmatory value, it confirms or corrects prior predictions and thus will assist capital providers in evaluating their past decisions (AASB 2008, pg 46). This is necessary for capital providers during their investment process. Also, the confirmatory value could lead to making a difference in decision making. When information has predictive value, it can be used in making predictions about the eventual outcomes of past, present or future events or their effects on future cash flows (AASB 2008, pg 46). This quality of relevance is important for investors in making decisions regarding protecting and enhancing their investments. Relevance is sufficiently defined to be consistently understood i.e. capable of making a difference in capital providers’ decision making.

Faithful representation

Faithful representation is defined as the faithful depiction in financial reports of economic phenomena. To represent economic phenomena faithfully, accounting representations must be complete, neutral and free from material error (AASB 2008, pg 46).

The board replaces reliability with faithful representation to convey its intended meaning more clearly and consistently. This is because reliability has been perceived in many different ways by users, making it inconsistently understood.

By removing verifiability out of the original definition, the board could reduce the misinterpretation that in order for information to be reliable or faithfully represented, it should be precise, or free from material errors to the virtual exclusion of faithful representation (AASB 2008, pg 47)) . By explicitly identifying freedom from material error, the board enforces its intended meaning more clearly.

3.4Are enhancing qualitative characteristics sufficiently defined?


The essence of decision making is choosing between alternatives. Comparability is not a quality of an individual item of information, but rather a quality of the relationship between two or more items of information.

It clearly explains that in order to achieve comparability, time period, accounting policies should be considered (AASB 2008,pg 61). The ED also explains why it is categorized as an enhancing qualitative characteristic.


Verifiability is defined as being able to assure users that they can depend on the information (AASB 2008, pg 39)).

In order for information to be free from material errors and reliably depended upon, it needs to be directly or indirectly verifiable by users. Only when users could validate the information, will they be able to rely on them.

However, we find that the definition is more like an outcome of verifiability rather than a clear definition. Besides, the key definition of verifiability is already covered in faithful representation, thus it could be redundant.


Timeliness is defined as having information available to decision makers before it loses its capacity to influence decisions (AASB 2008, pg 50).

This definition is very well-explained as timeliness could be easily misunderstood as being reported in a timely manner; however it information can be reported in a timely manner and yet not relevant at all. Thus the definition is strongly related to the objective as well as fundamental characteristics of the financial report. Understandability

For reports to be understandable, users are responsible for studying financial reporting information with reasonable diligence rather than only being willing to do so. In addition, when an economic phenomenon is complex, users may need to seek the aid of an adviser to understand that particular transaction (AASB 2008, pg 51).

Previously, understandability encompasses reasonable degree of financial knowledge and a willingness to study the information with reasonable diligence (AASB 2008, pg 63). Willingness to study is probably not sufficient to make financial reports, especially those of complicated nature and size, understandable. Hence, the addition of reasonable diligence rather than being willing to do so makes “understandability” a more reasonable and clearer definition.

3.5Are pervasive constraints appropriately defined?

Materiality is indeed a constraint to information usefulness of the report. This is because there are no certain ways to determine the degree of absolute accuracy or relevance of information provided. Besides, what is material to some entities might not be material to others.

Cost is a natural constraint while preparing financial report. Preparers and users will always have to evaluate between the cost incurred and benefit obtained while providing and analysing information. It is the cost-benefit aspect that also leads to materiality constraint.

However, we think that there are other constraints that should be considered as well. For example, trade-off between relevance and faithful representation places some limit on the information usefulness. The inability to achieve a balance between these two characteristics leads to the loss of objectivity of the financial report.

3.6Improve accounting practice in general and improve financial reporting in particular?

First of all, the classification of qualitative characteristics into fundamental and enhancing ones does provide a better relationship among them. They reflect better the nature and order of importance of these characteristics, thus assisting preparers of financial report in prioritizing their work. However, the classification could lead to over-emphasis on fundamental characteristics at the expense of enhancing ones. This is because there is no clear cut on to what degree enhancing characteristics should be applied.

Secondly, the replacement of reliability with faithful representation would help to reduce the long-standing misinterpretation and misunderstanding of what reliability is intended to mean. This could lead to a better perception about trade-off between reliability and relevance. However, how much better the replacement of the term could convey the intended meaning remains in doubt. Probably, there is much more that the board could do as a change of a term is probably not enough.

Thirdly, the trade-off between reliability and relevance has still not been clearly articulated. The inconsistencies thus still remain.

3.7. Usefulness to users

As the change leads to a better understanding and interpretation from preparers of financial report, the users will definitely benefit from this. There will be likely more consistencies throughout and across financial reports, making information more comparable and easier to evaluate.

However, fundamentally, we think the usefulness of information remain relatively the same. This is because there are no substantial changes, for example, addition of new characteristics.

3.7Best interests of the Australian Economy:

We think that the impact arising from the change in qualitative characteristics and constraints are insignificant relating to the Australian Economy.

4.0Non-Substantive Differences

Although there have been some changes to the current Conceptual Framework that the boards have proposed through the ED164, however, some differences are not substantive. As a result, the proposed changes, we believe, do not make much difference to accounting practices, if not complicating matters more. The following explains the non-substantive differences identified and the changes that we propose that would improve accounting practices.

4.1Difference # 2

The boards decided to identify present and potential capital providers as primary users for General Purpose Financial Reporting (GPFR) whereas the Australian Framework lists the users of GPFR as investors, lenders, suppliers and other trade creditors, employees, customers, governments and their agencies and the public.

The difference between the changes proposed in ED 164 is not very substantial because it was a mere categorisation of users listed in the current Conceptual Framework into primary users and non-primary users.

It is without doubt that capital providers are the primary users as they are the most influential to the entity, bear the most consequences of the management’s decisions and they are most interested in the core operations of an entity, as discussed in Chapter 2, Issue 1. Therefore, it is crucial that financial reports are prepared to meet their information needs regarding resource allocations and investment enhancements.

However, setting capital providers as the primary users hence setting the objective and other areas of the Conceptual Framework based on capital providers as primary users has neglected one very important and current issue – Corporate Social Responsibility. Where do the information needs of the society in general lie, where their focuses are more than financial performance of the firm but rather on the environmental and societal effects they bear?

When thinking of the consequences that stakeholders bear, financial consequence is the first thing that comes to mind. However, what many fail to identify is the non-financial consequences of an entity’s decisions, for example health deterioration, environmental destruction and lack of job opportunities for the underprivileged.

Therefore, we believe that there is another group of users who are as important as capital providers that should be specified as secondary, if not primary users. This group of users consists of social activists, trade unions, environmentalists, society in general and anyone who are potentially affected by an entity’s social and environmental decisions.

Corporate Social Responsibility (CSR) is defined as “the continuing commitment by companies to behave ethically and to contribute to economic development, while improving the quality of life of the workforce and their families, as well as the local community and society at large”, according to the World Business Council for Sustainable Development. There has been an increasing trend towards sustainability, and the need for Corporate Social Responsibilities has become increasingly important.

‘In response to the power and influence that multi-national corporations have, the principle of CSR was developed. This power essentially means that the corporations’ decisions and activities have a massive impact on the lives of ordinary people, for example, pollution from production processes and employment opportunities. As a result, society’s expectations of the corporations responsibilities with regards to what should or shouldn’t be done have evolved from what they were in the past. In today’s context, corporations are not only expected to look out for themselves but to act responsibly to meet the social and environmental needs of the society (Joanne 2006).

Therefore, it can be said that the society potentially has great impacts on a company’s reputation, image and ultimate success. In addition, the company’s social and environmental actions can either attract or repel investors from investing in the company.

Overall, although accounting practices become more complex and perhaps costly with CSR reporting in the short run, but in the long run, we believe that accounting practice is improved due to more transparency and disclosure in financial reporting. Besides, CSR reporting also increases management’s accountability that now not only covers the resources entrusted to them (Conceptual Framework 2004) but also their responsibility towards the society and environment (Joanne 2006).

4.2Difference # 3

The boards decided that the objective should be broad enough to encompass all the decisions that equity investors, lenders and other creditors make in their capacity as capital providers, including resource allocation decisions as well as decisions made to protect and enhance their investments.

There are no substantive differences except that the objective becomes more specific towards all the decisions that equity investors, lenders and other creditors make in their capacity as capital providers while the objective outlined in the Australian Conceptual Framework is to provide useful information to a wide range of users in making economic decisions (Conceptual Framework 2004, p13; ED164 2008, p12).

As we have agreed that capital providers are primary users, therefore, we believe that it is appropriate that the objective set should be broad enough to encompass all decisions of capital providers to maintain consistency within the framework itself (ED 164 2008, p27).

However, at the same time the objective should also aim at the recommended secondary group of users such as social activists, trade unions, environmentalists, society.

4.3Difference # 4

Do you agree that:
(a) relevance and faithful representation are fundamental qualitative characteristics?
(b) comparability, verifiability, timeliness and understand ability are enhancing qualitative characteristics?
(c) materiality and cost are pervasive constraints?

There are no substantive differences between the Conceptual Framework and ED 164. We have identified changes only in the use of the term ‘reliability’ (changed to ‘faithful representation) and categorisation of the qualitative characteristics to fundamental, enhancing and pervasive constraints (ED 164 2008, pp35-50).

Firstly, we do believe that ‘faithful representation’ is a better representation of the meaning of ‘reliability’. So, the change of the term is valid and justifiable.

However, we also identified that the trade-off between relevance and faithful representation will remain and cannot be eliminated completely because both are as important to maintain a balance in financial reporting (Johnson 2005). But, in order to improve accounting practice, perhaps including exemplary circumstances where relevance should be treated as more important than faithful reliability, or vice versa, might give better guidance to financial report preparers.

Besides that, although categorising seems like a non-substantive difference, but it certainly improves accounting practice and should be included in the framework. This is because categorising the qualitative characteristics as such enables preparers to understand that their top priority in financial reporting is to firstly achieve a good balance between relevance and faithful representation. In addition to that, preparers can understand that what enhances the credibility of a financial report are the enhancing qualitative characteristics. Finally, constantly considering materiality and cost/benefit of financial reporting can ensure that the financial reports present information sufficient to satisfy the needs of users to assets them in decision making.


In this report, we firstly identified the differences between the current Conceptual Framework and ED 164.

In difference # 1, although we generally had mix opinions about the issue, we finally concluded that there should be a merge between the entity and proprietary perspective. This means that the entity perspective should be adopted to avoid biasness towards owners but information that aids decision-making for capital providers should be included.

With difference # 2, we agreed with the boards’ proposition that entity’s present and the potential capital providers (equity investors, lenders and other creditors) should be classified as primary users because they bear the most consequences of the managements’ decisions and they are most interested in the core functions of the company. However, we have also agreed with the possibility of categorising the capital providers into equity providers and creditors according to the degree of their information needs. We have also raised our concerns that non-capital providers’ information needs will be neglected, considering the increasing awareness of Corporate Social Responsibility.

Since we decided that capital providers should be the primary user group, therefore we concluded that it is ideal that capital providers be set as the focus in setting the objective. However, as discussed, the objective should be made broad enough to encompass all decisions that equity providers, creditors and other lenders make in their capacity as capital providers. Furthermore, capital providers have a strong influence on entity’s performance and position. This justifies the need to set the focus of the objective on capital providers. We also made mention that ‘stewardship’ is as important as the former objective as the management will be held responsible for their decisions.

Under difference # 4 that relates to qualitative characteristics, we agreed that it is more reasonable to categorise the qualitative characteristics to fundamental qualitative characteristics (relevance and faithful representation), enhancing qualitative characteristics (comparability, verifiability, timeliness and understandability). Generally, they were properly identified, categorised and defined.

Relevance and faithful representation are fundamental qualitative characteristics because they are most instrumental to the usefulness of information provided.

The boards proposed to replace reliability with faithful representation to convey its intended meaning more clearly and consistently. Also, verifiability has been taken out of the original definition to reduce the misinterpretation of faithful representation (relevance).

Comparability, verifiability, timeliness and understandability are enhancing qualitative characteristics because consistency of information across entities or time periods enhances its comparability, which improves its decision-usefulness. Comparable information would not be useful if it is irrelevant to users’ decision. Verifiability is being able to assure user that they can depend on the information. Also broad concluded that reporting information in a timely manner can enhance both relevance and faithful representation of that information.

We agree that financial information must be understandable by users to make a better economic and investment decision but to understand the financial reports information users must have a good knowledge about accounting and financing. Specially, balance sheet items and ratio of financial reports are not easily understandable.

Materiality and cost are the pervasive constraints because they do limit the usefulness of information. Materiality is relevant to all qualitative characteristics. Also the cost can provide benefits to financial information users to make a better decision with the lower cost on the capital market.

Finally, the non-substantive differences were identified in Difference # 2, Difference # 3 and Difference # 4. With Difference # 2 and Difference # 3, we suggested that Corporate Social Responsibility be included in financial reporting to improve accounting practice as there is an increasing awareness about the issue. This involves adding a second group of users and including them as part of the objective. This group be made up of people groups such as the society, environmentalists and trade unions that can potentially have great impacts on a company. In Difference # 4, we are aware that there will always be a trade-off between relevance and faithful representation, hence we proposed that more clarification of when relevance should be more prominent than faithful representation, and vice versa.


AASB (2004), ‘Conceptual Framework for the Preparation and Presentation of Financial Statements‘, July, viewed 8 September 2008, AASB (2008), ‘An Improved Conceptual Framework for Financial Reporting: The Objective of Financial Reporting and Qualitative Characteristics and Constraints of Decision-useful Financial Reporting Information’, ED 164, June, viewed 8 September 2008,

The Institute of Chartered Accountants in Ireland: Accounting Committee (2008), viewed on 5 October 2008 Deegan C (2007), ‘Australian Financial Accounting’, 5th edn, McGraw-Hill, Sydney

Freudenberg & Co. Kommanditgesellschaft (2008), viewed on 5 October 2008 Joanne (2008), ‘Corporate Social Responsibility’, viewed 10 October 2008 Johnson LT (2005), ‘Relevance and Reliability’, The FASB Report, February 28, viewed 10 October 2008 Holcim Group Support (2008), viewed on 3 October 2008 Reekie J (2008), Vancouver, British Columbia, Canada, viewed on 3 October 2008…...

Similar Documents

Premium Essay

Differences Between an Adn and a Bsn

...The Differences Between an Associate Degree Nurse and a Baccalaureate Degree Nurse Grand Canyon University Although the Associate degree in Nursing and the Bachelors degree in nursing ultimately lead to a nursing profession in the health care industry, there are many differences between them. The fast growing complexity of health care and broadening clinical knowledge have forced nurses to have the educational preparation to meet its complex demand. Unlike the Associate degree program (ADN), the Baccalaureate program (BSN), prepares professional nurses whose practice is based upon science in order to restore and maintain health. Both the ADN and the BSN degrees lead to a profession as a registered nurse upon successfully passing the NCLEX board of licensure exam. However there are major differences that set both degrees apart in the Health care industry There are major differences between the ADN and BSN degrees. One of the differences is the length of time required to complete both programs. The Associate degree requires two years of course work to complete whereas the Bachelors degree normally requires four years of course work. In some instances it but could be less especially in cases where the prospective student already has a bachelors degree in another field or an associate degree in nursing from a community college. In comparing the competencies of both the ADN and BSN degrees both programs produce competent......

Words: 838 - Pages: 4

Premium Essay

Difference Between Truncate and Delete

...1. What is different between TRUNCATE and DELETE? The Delete command will log the data changes in the log file where as the truncate will simply remove the data without it. Hence Data removed by Delete command can be rolled back but not the data removed by TRUNCATE. Truncate is a DDL statement whereas DELETE is a DML statement. 2. What are ORACLE PRECOMPILERS? A precompiler is a tool that allows programmers to embed SQL statements in high-level source programs like C, C++, COBOL, etc. The precompiler accepts the source program as input, translates the embedded SQL statements into standard Oracle runtime library calls, and generates a modified source program that one can compile, link, and execute in the usual way. Examples are the Pro*C Precompiler for C, Pro*Cobol for Cobol, SQLJ for Java etc. 3. What is difference between procedure and function. A function always returns a value, while a procedure does not. When you call a function you must always assign its value to a variable. 4. What are things you do to reduce patch timing ? You can take advantage of following - # Merging patches via admrgpch # Use various adpatch options like nocompiledb or nocompilejsp # Use defaults file # Staged APPL_TOP during upgrades # Increase batch size (Might result into negative ) 5. What is the purpose of a cluster? A cluster provides an optional method of storing table data. A cluster is comprised of a group of tables that share the same data blocks, which...

Words: 3117 - Pages: 13

Premium Essay

Difference Between Cells

...The Difference Between Cells Your name SCIE206 AIU Online Abstract This paper is intended to inform the reader on the way photosynthesis and respiration are linked in order to provide living things with energy. Also how some cells use glycolysis to produce energy from sugar created in photosynthesis. Lastly, how cells use enzymes as biological catalysts to increase the rate of reactions. The Difference Between Cells During photosynthesis cells receive energy from the sun which is then combined with carbon dioxide and water to create something called glucose (Editorial Board, 2013). Photosynthesis occurs in green plants such as seaweed, algae and other green plants. This process is very important because the byproduct of this process is oxygen which is very essential to all living organisms. Plants produce a lot of glucose and sometimes so much that it is more than they need. The plant uses this glucose to produce things like leaves and flowers and other growths that take place on the plant. The glucose is then transformed into cellulose which is a part of the structural wall a very sturdy material. Humans depend on glucose just as plants do however humans are not able to produce their own glucose so humans actually rely on plants to produce it. Cellular respiration is a chemical breakdown of glucose that was created through the photosynthesis process, and converting that glucose into larger amounts of adenosine triphosphate. Adenosine triphosphate also known as......

Words: 865 - Pages: 4

Premium Essay

Cultural Difference: Hofstede Framework

...Culture, in my own opinion, is a unique system of values and norms that are believed by a group of people who live in the same society. Since culture is unique, Geert Hofstede tried to study the differences. After the study, he proposed five dimensions to measure the cultural difference between nations. The following parts will explain Hofstede Framework briefly. The first dimension is Power Distance. It is a tool to measure the power difference between levels in organization. In a group with high power distance, the majority of people would tend to respect in authority and establish hierarchy. When observing their behavior, they would have a great esteem on the class of social level. By contrary, a society with a low power distance would not fear authority and view themselves as equal with equal rights. Generally, the power distance in Oriental is higher than that in Occidental. The second dimension is Individualism vs. Collectivism. This index measures the preference of a group of people in considering self-benefit or group-benefit. In a society of collectivism, the society would have strong group cohesion and have higher responsibility on others well-being. Besides, the management level would tend to discuss with their subordinates before making a decision. By contrary, people will have loose ties and lack of interpersonal connection when a society prefers individualism. Generally, the Oriental prefer to focus on collectivism; the Occidental prefer to focus on the......

Words: 1568 - Pages: 7

Premium Essay

Difference Between Adn and Bsn

...Differences in Competency between Associate degrees Prepared Nurses versus Baccalaureate Prepared Nurses A BSN represent a Baccalaureate of Science in Nursing, while an ADN is an Associate’s Degree in Nursing. Both degrees will qualify a person to take the same licensing exam NCLEX. There are several differences in the competency levels of these two-degree programs. BSN program is a four-year degree, which is knowledge, theory and research based and the emphasis is on the entire picture of the field of nursing. Exposing the nurse to human diversity and global perspective, health promotion, spiritual perspectives, ethical, legal, political, historical and social influences using liberal arts including biblical concepts for complete understanding of the field . The ADN program is shorter and more concise which focuses on the clinical skills and is more tasks oriented. It lacks the theory and science behind nursing as a profession. BSN Prepared Nurses poses the following competency according to Leddy and Peppers Conceptual Bases of Professional Nursing (Lucy J Hood (2010) BSN gives direct care with diverse nursing judgment, using nursing process. They have ability to carry out their duty, within planned and unplanned environment with independent nursing decisions. Use complex communication skills with clients; collaborate with team and other interdisciplinary members. Assess client information needs and design care plan They join force with nursing teachers......

Words: 377 - Pages: 2

Premium Essay

Difference Between Adn and Bsn

...Title - Difference in competencies between nurses prepared at the Associate degree level versus Baccalaureate degree level in nursing. Name - Thomas Paleyl Course – NRS-430V- 0109 Date – 12 April 2014 The importance of education cannot be over-emphasize in any walks of life, it is the vehicle that drive individual to the destination point of achieving goals, objectives and making dreams come true. It is in the same token that people aspire to move up the ladder in their respective field of endeavor in order to get closer to their dreams. But with this education qualification come enormous responsibility in terms of skills and techniques. Thus the differences between Associate Degree Nurse (ADN) versus Baccalaureate Degree Nurse (BSN) could be seen in the manner with which clinical techniques, experience and skills that are applied in the process of taking care of patient. In order to earn an Associate Degree in nursing one would have to undergo two to three years course in a junior college or community college, after which one would qualified to take the National Council Licensure Examination (NCLEX) and then ready to work in any healthcare organization. Because of nurses shortage in the 50s, it become necessary to find other ways......

Words: 1036 - Pages: 5

Premium Essay

Differences Between Csr and Pr

...Discuss the relationship between CSR and PR and analyze the ethical issues that arise. How may practitioners ensure their CSR programs are more than just rhetoric? CSR "Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large".(Lord Holme and Richard Watt-Making good business sense) CSR has become a relevent issue in the business field. Nowdays people judge a companys reputation with the way how they deal with their social and environmental responsibilities. Sevral studies revealed that responsible ativities are increasingly valued and demanded by stakeholders.(consumers, investors, community,journalist etc) who see in such activities the civic behavior of bussinesses, and which in turn influences their evaluation of the companies. According to study carried out by MORI in UK indicates that ,75% consumers while evaluating a company considers its level of social responsibility to be important, almost 90% of employees believe that their company should be socially responsible, almost 40% of analyst and investors consider it very important while evaluating the company and over 50 % of journalists consider social responsibility to be very important while judging the company. CSR can be better understood as a means of reinforcing both reputation and legitimacy, as it provides......

Words: 1453 - Pages: 6

Premium Essay

Difference Between and Felony and Misdemeanor

...The Difference between a felony and misdemeanor Laura Macella AIU Online The Difference between a felony and misdemeanor Abstract In this paper it will be discussed the differences between a felony and a misdemeanor. There will be examples of real life situations and memo discussing to a client the differences between the two. It will be discussed to the client that was charged with breach of peace about the crime she committed, her concerns about prison and the death sentences, and the punishments that she will possibly face if she is convicted. There are two divisions that a crime can fall under. When a crime is committed, the crime can fall either under a misdemeanor or a felony charge. Misdemeanors are usually small, petty crimes that one commits which are usually punishable by a fine, short jail sentence usually less than 1 year, or community service. When talking about a felony they are much more serious crimes, which will carry a severe sentence of more than a year in jail or even a death sentence. According to Money Matters 101, a misdemeanor is a less criminal act in many common law systems ( A misdemeanor are generally less severe crimes that are committed and are usually punished with fines, community service, a less than 12 months in jail. Misdemeanors usually don’t result in the loss of civil rights, but if you are convicted of a misdemeanor, you might find it difficult to obtain a professional license or public employment......

Words: 1682 - Pages: 7

Premium Essay

Differences Between Leadership and Management

...main differences between leaders and managers are: the relationship between the followers and managers and leaders, how leaders and managers solve problems, and the difference in emotional intelligence between leaders and managers. Leaders and managers have a difference in emotional intelligence. A leader is an individual who strategizes a visionary and most importantly someone who inspires other people to greatness. In order to achieve this, while leading one must share their vision with the staff or people brought together to solve a problem or create a strategy. Leaders serve as role models, motivate their staff, inspire cooperation and create a community both inside and outside of the organization. They mostly follow their intuition which in most cases benefits the company and in most cases they gain followers who become loyal to them and the organization. This is a direct contradiction to managers who carry out their instructions by the book and follow the organization’s policy to the letter and as a result the staff may or may not be loyal to them. Even when the idea of a divinely appointed leader prevailed, there existed a contrary view that the leader was actually empowered by followers, this theory was analyzed by Thomas Paine “Titles are but nicknames…it is common opinion only that makes them anything or nothing . . . . [A]body of men, holding themselves accountable to nobody, ought not to be trusted by anybody” (1944, pp. 59-60, 63). Another major difference......

Words: 1093 - Pages: 5

Premium Essay

Differences Between Aql and Olap

...Differences between AQL and OLAP Auteur Peter den Heijer Adres Veldhofstraat 16 Postcode 7213 AM Plaatsnaam Gorssel Emailadres Telefoonnummer 0575-490719 Datum 26 mei 2012 Opleidingsinstituut CAI Opleiding Business Intelligence Opleidingscode BUSI1201UTRx Docent Emiel Caron Versie 3.0 Pagina 1 van 19 Inhoud 1. Introduction ..................................................................................................................................... 3 2. Business Case................................................................................................................................... 3 3. Central Research Question .............................................................................................................. 3 4. Purpose............................................................................................................................................ 3 5. Sub Questions.................................................................................................................................. 4 6. Research Methodology and Scope .................................................................................................. 4 7. Introduction Qlikview ...................................................................................................................... 4 8. Definition of......

Words: 4959 - Pages: 20

Free Essay

Difference Between Law and Morality

...HU 4640 ETHICS Homework Assignment: Difference between Law and Morality Instructor: Mr.Garmon Student: Mr. Rupert L.Griffith 03/31/15 The Debate between Law and Morality: Laws are absolute rules prescribed by government representatives, while morality has to do with personal views on what is right or wrong. A major difference between these two concepts is that a law is formal public policy that has consequences for those who violate it. Someone who murders or steals, for instance, goes to jail if found guilty in court. In contrast, someone who violates what others view as a moral standard may have no tangible consequence other than damaged relationships. Laws are sometimes viewed as legislation on moral issues. Many people lean on religious beliefs to frame their moral viewpoints. Politicians and some citizens also point to faith-based principles in suggesting that laws should follow what God commands. Others believe that laws should protect individual rights and freedoms but should not extend to topics viewed as ethical gray areas. In some cases, laws and morals evolve over time based on changing societal views. The Civil Rights laws of the 1950s and 1960s developed as Americans became more supportive of an end to segregation. Sometimes, though, principle-based politicians and leaders look to enact laws based on personal convictions, even though they may contradict the popular opinion of the time. My Position on this View: This would lend itself to the current......

Words: 584 - Pages: 3

Premium Essay

Difference Between Apa and Mla

...source, allows the reader to trace the source. There are two major and most popular reference styles adopted by writers and scholars. MLA and APA reference styles are the common styles adopted. DIIFERENCES BETWEEN APA AND MLA American Psychological Association (APA) and Modern Language Association (MLA) are writing and formatting styles used in papers, reports, and academic essays. APA is predominately used in the social sciences while MLA is predominately used in the liberal arts and humanities. The guidelines provide overall formatting for content, style and references. While they have many similarities, there are also many differences. Despite their differences, the APA and MLA citation systems have the same overall function in a research paper—sources are acknowledged via in-text citations, each of which corresponds to an entry in an alphabetical list of works at the end of the paper, referred to as “Works Cited” in MLA Style and “References” in APA Style. However, the MLA Handbook also mentions some variations, such as a “Works Consulted” list, which contains sources not cited within the body of the paper, and an annotated bibliography, which includes a brief description or evaluation of each source. APA Style does not use these alternate methods The differences between the two styles become even more apparent when one is creating text citations. MLA Style includes the author’s last name and the page number, whether citing a direct quotation or not. However, APA......

Words: 655 - Pages: 3

Free Essay

Differences Between Hypothyroidism and Hyperthyroidism

...Differences between Hypothyroidism and Hyperthyroidism Before you talk about the differences between hypothyroidism and hyperthyroidism you first have to know what the purpose of the thyroid. The thyroid gland is a butterfly shaped gland that produces hormones for your body to function. These hormones helps help the brain, heart, muscles and many other major organs. The thyroid gland is located in the front of your neck at the base of your throat. Hypothyroidism means under active thyroid and it does not produce enough hormones needed for the body. It makes your body slow down. Symptoms are fatigue, dry skin nails and hair, constipation, weight gain, heavy mensural flow, irritability, bradycardia (decreased heart rate), increased respiratory rate. In blood testing hypothyroidism shows decreased levels of T3 and T4 and increased levels of TSH. Hypothyroidism is treated by supplements of thyroid hormones and are lifelong treatments. Hyperthyroidism means over active thyroid and produces too much hormone. This causes the body to go into over drive and speed up. Symptoms are sweating, feeling hot, and racing thoughts, anxiety, fatigue, increased bowel movements, insomnia, muscle weakness, soft nails, increased moisture of the skin, tachycardia (increased heart rate). In blood testing the T3 and T4 levels are increased and the TSH levels are decreased. The treatment for hyperthyroidism is by anti- thyroid drugs and is taken lifelong. There are auto immune diseases that......

Words: 349 - Pages: 2

Premium Essay

Difference Between Juvenile and Criminal

...Difference between Juvenile and Criminal Justice System David E. Foster Kaplan College – Las Vegas Campus CJ 150 Professor Laura Fletcher December 5, 2013 Difference between Juvenile and Criminal Justice System How would it feel if our children were being treated like adults in the criminal justice system; getting sentenced for life without parole, or maybe have your child sentenced to death as a teenager. Well thanks to our juvenile justice system they discipline adolescent different than adult, the system is design to solely handle children’s matters. The juvenile court system is a dedicated court, for an adolescent which is intended to encourage rehabilitation for youth in a structure of procedural due process whereas the criminal justice system is designed to punish adults who choose not to obey the laws. It has concern for acting in the best interest of the child and the greatest interest of public safety. A juvenile court judge has to be elected or appointed to be in charge of juvenile cases and his or her decision can only be reviewed by another judge but from a higher court. Some of his duties might consist of making a decision if the juvenile should stay in detention prior to trail or release them to their parents; also the judge handles all waiver proceedings meaning if the crime committed is that serious where the judge thinks the juvenile should be treated like an adult, then he can give them a waiver into the adult justice system. As for......

Words: 906 - Pages: 4

Free Essay

Difference Between Groups and Team

...Difference between Groups and Teams December 4, 2011 When coming together in the workplace to accomplish larger issues, teams or groups are usually assembled for this. This paper will discuss the differences between groups and teams and how they are applied to my workplace. Teams can be a group of individuals that are put together randomly or on purpose to work together to accomplish an assigned task they are given. They are working together for a common purpose. The set goals and have a common approach on how they will accomplish their goals. “Teams bring together complementary skills and experience that exceed those of any individual on the team. The different perspectives, knowledge, skills and strengths of each member are identified and used, by comparison most groups are extremely rigid, and members usually have assigned roles and tasks that don’t change. Teams however are flexible performing different task and maintenance functions as required. Roles and tasks may change depending upon the expertise and experience most pertinent to the work being performed” ( Within my organization every year teams are put together to work on issues that come up from our employee survey that is taken yearly. Once employees take a survey all the information is gathered and the top issues that come up cause for concern. These issues can be a positive or a negative meaning the employees would like to see something added to the workplace or......

Words: 781 - Pages: 4