Accounting Quality
At the core, the annual reports must reflect a true and fair view of the company’s performance. However, the quality of the results presented is equally important. That is, the earnings reported must be reflective of the future earnings capacity of the company. This will enable investors to understand the core earnings of the firm and help in forecasting the performance of the company. If earnings is of a poor quality, it implies that the earnings are not a good indicator of the company’s performance. (Penman, 2013) The Australian corporate environment receives support from legislation and common law to ensure companies are compliant and providing timely and accurate financial information to the users. Conover, et. Al. (2008) found that common law countries such as Australia had less incidents of late filing and less days to file its annual reports, when compared with code law countries.
HVN’s annual reports were analysed and the financial statements were reformatted to provide a better understanding of the core earnings. In examining the quality of HVN’s accounting reports, it is important to understand the business and strategy of HVN, as explained in the previous section. HVN’s resurgence in 2013-14 after a gradual drop in profits from 2010 through 2013, is an indicator of management’s successful changes in strategy.___________________ (CAN INSERT REASONINGS HERE BASED ON SECTION 1- Business Strategy)
Key Items Looked At * Detecting Manipulation in Revenue

Description | | 2010 | 2011 | 2012 | 2013 | 2014 | ('000) | Net Sales | | $1,344,455.00 | $1,556,384.00 | $1,407,342.00 | $1,323,481.00 | $1,513,662.00 | | Cash Sales | $1,392,072.00 | $1,634,885.00 | $1,513,730.00 | $1,393,735.00 | $1,590,489.00 | | Net Accounts Rec | $1,106,827.00 | $1,079,770.00 | $1,028,529.00 | $1,067,048.00 | $1,126,810.00 | | | | | | | | |