stakeholders who have an interest In Ooredoo organization operations
Q1.
Customers and employees are stakeholders who have an interest In Ooredoo organization operations and outcomes. Customers are categorized as external stakeholders because they do not poses direct affiliation with the company but rather in the success of the business. Customers have a stake on the quality of the product and services produced by the company and the value added by the products. Customers have expectations in regards to satisfaction of their needs by the provision of quality products sat a fair price. Ooredoo focuses on the enhancement of customer experience as they strive to enrich their customer’s lives by provision of engaging and innovative communication services. Employees are stakeholders by virtue of their income and safety. Employees are internal stakeholders as they exist in the inner circle of the organization and are directly affected by the operations of the business. The employees’ pf the Ooredoo Company create value for the shareholders and interact with the customers of the organization directly. The employees benefit from the organization through earning an income and advancement of their careers. They are also primary stakeholders who are key in the functionality of the business and are directly involved in the daily operations of the business (Hatherly 2016).
Q2.
Every organization that transacts keeps financial records of their transactions. The accounting records of a business enables the compilation of financial information in the form of financial statements. The analysis of the financial records and the records themselves are reported to the public, where different stakeholders consume the information. For instance, Ooredoo reports its financial statements which include, statements of financial position and income statements that are used by stakeholders in the decision-making process. The main difference between accounting and reporting is that accounting is the actual recording and analysis of financial transactions, while reporting is the delivery of accounting information to be used in decision making(Birt et al. 2020).
Q3.
Ooredoo has to carry out environmental analysis so as to analyses the opportunities at their disposal. Political factors to consider would include the election periods of a country as they would affect business operations in case of post-election violence. The change of the current business policies in place after an election can also affect the operations of the company and business. Legislations in practice like taxation policies, consumer protection policies, and corporate social responsibility can also positively affect Ooredoo business operations. The regulatory and compliance framework of the different countries that Ooredoo has set up their organization affects how the company operates. The economic factors that Ooredoo should evaluate include the current economic status of the country that is if the economy is growing or declining. The rate of exchange for currencies as it would be significant to investors from overseas who would like to invest in the business. Also, the rate of unemployment and the purchasing power of the customers are also key to analyze as they would affect availability of human capital and sales of the company, respectively. The socio-cultural factors to consider would include the demographical characteristics which would be use full in the product development and marketing processes. The attitude and preferences of the people in the market; is also important as it assists Ooredoo in developing their products to satisfy the needs of the market. The religious beliefs of the target market and the lifestyle decisions of the people also affects the strategies used by Ooredoo to drive its product into the market. The level of technological advancements in the market is also a very important factor to assess. Ooredoo being a technological company, it should ensure that its product are reflective of new technologies in the market. The company should also embrace new ways of production to ensure it stays competitive in the market. The firm should take advantage of the technological hubs and train its employees in the new ways of operating, therefore ensuring competitive advantage in the market (Lui 2017).
Q4
In accrual, accounting revenues are recorded when the company earns them and not necessarily received the money. The expenses are incurred regardless of the company has paid for them. The process if accounting for the accrued debits and credits is what is referred to as accrual accounting. Accruals can be categorized as receivables, as indicated in the statement of financial position for Ooredoo and payables. Receivables may consist of assets or income yet to be received by the company, this means that Ooredoo has supplied their products and services they have delivered on credit. On the other hand, payables are purchases made by a company but have not paid for the supplies. Ooredoo may acquire raw material to manufacture mobile phones on credit. This is recorded on the statement of financial position as liabilities. As seen on the financial statements of Ooredoo, the interest expense, which shows unpaid interest is recorded on the income statement. The supplier accrual, which are the utilities and goods supplied by suppliers that are not paid, are recorded as creditors on the statement of financial position. Accruals are important to avoid ambiguity in the accounting process when it comes to the liabilities and revenues of the company. They also assist in projecting potential incoming cash and profitability probability in the future. To record on an accrual basis of accounting, an accountant uses accounting formulas that enable them to input, adjusts, and monitor the incomes that are yet to be paid and the expenses that are yet to be paid. Accountants then adjust the entries they have made in the journals, and in an accurate manner, the entries must be verifiable (Udeh 2018).
Q5.
The IAS16 describes the cost model and the revaluation model as the main measurements for non-tangible assets, plants, and equipment after recognition. The model cost takes the items at their initial costs and their associated expenditure thereafter. The cost is less of accumulated depreciation and any impairment losses. On the other hand, the revaluation model entails the valuation of these assets to their fair value after accounting for depreciation. The model proposes that regular valuations should be carried out to ensure that the value of the assets in the statement of financial position does not differ from the fair value of the asset. Ooredoo uses the two models to accurately value their assets, therefore, ensuring that the actual values of the companies assets are reflected, which ensures that there is no over or understatement of the equity(Kirli 2018). Ooredoo uses the straight-line method of depreciation.
Q6.
The consolidated financial statements of Ooredoo are based on IFRS compliance. Some of the judgments made are classification of investment securities where the management classifies the acquired investments as available for sale, holds them to maturity, or gives them a fair value in the financial statements. The company has classified them at profit and loss at their fair value. The second judgment is the classification of joint ventures and subsidiaries where the accountant evaluates the voting rights and ownership. Thirdly, the recognition of revenue and the capitalization of costs are decided when the customers consume their received products and when costs are incurred in the fulfillment of contract, respectively. Estimates are made on the impairment of non-financial assets and the impairment of inventories made.
Q7.
Capital expenditure is incurred in the acquisition process of capital assets or the enhancements of the current capital assets to improve its efficiency in production. It is a non-recurring expenditure which is usually long term and can be capitalized. It is shown in the income statement and the statement of financial position. On the other hand, revenue expenditure is a short term expenditure that is incurred in the daily operations of the firm. It is recurring and cannot be capitalized and is used to ensure that the capacity of the firm is maintained (Udeh 2018). It is recorded in the income statement only and is unique to each financial year. They are shown as operating expenses in terms of rental and utilities as revenue expenditure, and maintenance cost are capital expenditures.
Q8.
The going concern principle assumes that a company will be operational in the future, meaning that the firm at no one point in the foreseeable future will not liquidate its assets and halt its operation. This assumption allows the accountant to defer the recognition of some expenses to a future date when the company will be in a position to pay. Ooredoo implements this principle by acquiring long term assets with the view that they will be operational years from the date of purchase. The auditors at the company audit the Ooredoo as a going concern for a period not greater than one financial year. The auditors use the principle to assess the receivables and accounts payables expected by Ooredoo; this can be mitigated by the provision of long term loans (Udeh 2018). This show that the company will be operational even after the current financial year, Ooredoo has done that by having long-term liabilities.
Q9.
Ooredoo 2018 financial performance has declined in comparison to its performance in 2017. This is shown, one, on the consolidated statement of profit and loss as in 2017, the company made a net profit of 2,288,661,000 as compared to 1,792,730,000 in 2018. The total liabilities and equity decreased from 89,456,485,000 to 85,299,475,000 in 2018. Finally the cash flows decreased in 2018 to 16,533,142,000 from 17,095,602,000 in 2017.
Q 10.
The current financial position of Ooredoo has declined as compared to its financial position in 2017. This is portrayed by the decrease in the value of assets, equity, and an increase in liability, as shown in the statement of financial position. The comprehensive income of the company has also reduced due to both increase in expenses and a decline in sales, as shown in the profit and loss statement. The cash flows of the company have also reduced as compared to 2017