Accounting theory

Topics: Financial statements, Balance sheet, Annual report Pages: 12 (2714 words) Published: August 27, 2014
Letter of Transmittal

Dear Person-in-charge for Sekara Hotel

Enclosed is the report you commissioned on 03 March 2014 on the hotel industry on Lighthouse Hotel, Sri Lanka. The main findings of the report are: The current financial reporting requirements for publically listed companies in Sri Lanka. The recent and future changes since 2000. The cultural influences on financial reporting in Sri Lanka. The political processes that are influencing the setting of accounting standards in the Sri Lanka. The information provided in the annual report of Sri Lanka Hotel Industry. Reporting undertaken by the company in addition to the annual report. A discussion of how the financial reporting environment you discussed in question 1 and the company’s stakeholders appear to have influenced your chosen company’s reporting practices. We would like to thank you for the opportunity this report gave us to familiarize ourselves with the hotel industry, and to develop our research skills, which will be invaluable for future projects.

Regards,
Group 8 members.

Executive Summary
This report will discuss about the financial reporting environment in Sri Lanka. Sri Lanka has converged with IFRS since 2012. This conversion process have causes changes in the accounting reports of the companies in Sri Lanka which will be discuss later. Besides that, the report will also discuss about the cultural influences to the financial report of the companies. The hotel industries have been producing sustainability report to indicate that they have been contributing to save the environment in order to adopt to the culture of Sri Lanka. Moreover, the report will also discuss the political processes that will affect the setting of accounting standards in Sri Lanka. Furthermore, the report will explain the information in the annual report of Lighthouse Hotel. The information of the annual report are separated into two parts which is the financial and non-financial. The financial information are the balance sheet, income statements and the cash flow of the company which will show the financial position of the company. On the other hand the non-financial report is corporate society responsibility (CSR) and sustainability report. The Lighthouse hotel have published Green Directory which deliberate the actions that are taken by the company to save the environment and conservation of the natural resources. In addition the report will also discuss about the influences of the company’s stakeholders to the Lighthouse hotel’ reporting practices. The project of planting tress is crucial to maintain the legitimacy in Sri Lanka.

Table of Content

Introduction
The purpose of writing the report is to provide information of the hotel in Sri Lanka to Sekara Hotels Ltd since the company is seeking international expansion opportunities for its core business competencies. The limitations of expanding core business in Sri Lanka are the differences in culture and political process that influences the setting up of the accounting standards. As different country have different culture, Sekara Hotel will have to adapt to the culture in order to operate the business by gaining legitimacy. Since company will have to produce annual report Sri Lanka Financial accounting standards and Sekara Hotels Ltd is an international group company, this will mean that the annual report will have different version which could prove difficulty for the company as a form of information. The reason is that different country follow different accounting standard. All of this is assumed that Sekara Hotel has enough capital to implement the integration of all the findings into the new hotel and be equally as competent as other major competitors.

Findings
1. A description of the financial reporting environment in Sri Lanka a) What are current financial reporting requirements for publically listed companies in Sri Lanka? Your report should describe recent changes in Sri Lanka...
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