Background information

1.According to AASB 101 a complete set of financial statements comprises:

a)a statement of financial position as at the end of the period;

b)a statement of profit or loss and other comprehensive income for the period;

c)a statement of changes in equity for the period;

d)a statement of cash flows for the period;

e)notes, comprising significant accounting policies and other explanatory information.

2.Section 292 of the Corporations Act provides that a financial report and a directors' report must be prepared for each financial year by:

a)all disclosing entities; and

b)all public companies; and

c)all large proprietary companies; and

d)all registered schemes.

3.Section 296 of the Corporations Act provides that the financial report of the companies referred to above must comply with the accounting standards.

4.According to section 300A of the Corporations Act 2001, listed companies must present a remuneration report to shareholders at every annual general meeting showing the board's policies for determining the nature and amount of remuneration paid to key management personnel (which includes any director), the relationship between the policies and company performance, an explanation of performance hurdles and actual remuneration paid to key management personnel.

5.Disclosure of corporate governance practices - Under ASX Listing Rule 4.10.3, companies are required to provide a statement in their annual report disclosing the extent to which they have followed the Recommendations in the reporting period. Where companies have not followed all the Recommendations, they must identify the Recommendations that have not been followed and give reasons for not following them. Annual reporting does not diminish the company's obligation to provide disclosure under ASX Listing Rule 3.1.

An examination of the 2019 annual report of companies such as for example Woolworths Group and Cleanaway Waste Management Ltd (refer to the 2019 annual report of Woolworths Group and Cleanaway Waste Management Ltd - Links on Blackboard) shows that these entities provide information extending beyond that which is required by the Corporations Act (2001) and the ASX listing rules. As such, this additional information is provided voluntarily.

Required

a)Evaluate the following statement:

It is fair and reasonable to argue that all Australian entities listed on the Australian Securities Exchange can be relied upon to provide their shareholders with comprehensive non-legislated (voluntary) disclosures considered critical for shareholders' information needs.

In your evaluation, identify and explain three relevant accounting theories that will explain why all Australian entities listed on the Australian Securities Exchange might provide voluntary disclosures in their annual reports.

b)With reference to the 2019 annual reports of Woolworths Group and Cleanaway Waste Management Ltd, provide three examples of voluntary disclosure from each of these entities. Include the relevant page for each example.