S117 ACT301 Accounting Theory and Contemporary Issues: ASSESSMENT

Posted on December 23, 2022 by Cheapest Assignment

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Length:  As required in Part A and Part B. 1000-2000 words (10% tolerable rate, i.e. maximum word count limit of 2,200 words)

Value:  15% of the Total Unit Assessment

Task    Critical analysis of a given accounting questions and cases.

Preparation      Study Topics 1-6 through following the study guide and readings. Additional research in accounting literature.

Presentation Format and Submission

Submit via CDU Learnline in ‘WORD DOC OR PDF’ ONLY.

Assessment Font Style and Size: Times New Roman, Size 11

Student number to be indicated on the bottom left hand corner on each page, Times New Roman, Size 9

Page numbering on the bottom right hand corner, Times New Roman, Size 9

Text alignment and line spacing: Left Text Alignment, 1.5 Line Spacing

Total Assessment Words: min of 1000, max of 2200 words

You are expected to use sources from the academic accounting literature. Examples of these sources are given
below. DO NOT reference Wikipedia.

Much of the literature that will be useful to you was published in the 1990’s and the first few years of the 21st century. Some suitable academic journals to browse for this purpose include:

The Accounting Review
Accounting and Business Research
International Journal of Accounting Education and Research
International Journal of Accounting
Asia Pacific Journal of Management
The British Accounting Review
European Accounting Review
Journal of Applied Accounting Research
Accounting Research Journal, etc.

Do NOT share files with other students— submission of identical work constitutes plagiarism, and you are liable for charges of misconduct regardless of whether you copied the work or provided the original work to others.

Note that plagiarism also includes presenting the ideas of others as if they were your own. It does not only refer to the absence of inverted commas or using the exact words of others. Referencing of sources is expected in Part A and B of this assignment. You have a bonus from doing this correctly since that referencing also provides authoritative support for the statements you make.

Part A
Let us assume that the government has become concerned that existing disclosure regulation tends to fixate on the financial performance of organisation but fails to address other aspects of corporate performance, including failure to provide information about corporate social and environmental impacts as well as about various initiatives and investments an organisation has undertaken to improve its social and environmental performance. As such, the government has decided to introduce legislation that will require business corporations to provide information
about the social and environmental impacts of their operations, as well as the social and environmental initiatives undertaken by the corporations.

Required:
You are required to do the following:

(a) Explain from a ‘public interest theory perspective’ the rationale for the Government introducing the legislation and how the government will ultimately assess whether any proposed legislation should actually be introduced.

(b) Predict from a ‘capture theory perspective’ the types of constituents that will benefit in the long run from any social and environmental disclosure legislation.

(c) Predict from an ‘economic interest group perspective’ whether any potential legislation to be introduced will lead to an increase in the accountability of corporations in relation to their social and environmental performance despite
any implications that this increased corporate accountability might have for the financial success of large but heavily polluting organisations.

Part B
The website of FASB (www.fasb.org) has a section entitled ‘Facts about FASB’, in which there is information about how accounting standards are developed (as accessed in November 2015). In part, it states:

Since 1973, the Financial Accounting Standards Board (FASB) has been the designated organization in the private sector for establishing standards of financial accounting that govern the preparation of financial reports by nongovernmental entities. Those standards are officially recognized as authoritative by the Securities and Exchange Commission (SEC) (Financial Reporting Release No. 1, Section 101, and reaffirmed in its April 2003 Policy Statement) and the American Institute of Certified Public Accountants (Rule 203, Rules of Professional Conduct, as amended May 1973 and May 1979). Such standards are important to the efficient functioning of the economy because decisions about the allocation of resources rely heavily on credible, concise, and understandable financial information.

The SEC has statutory authority to establish financial accounting and reporting standards for publicly held companies under the Securities Exchange Act of 1934. Throughout its history, however, the Commission’s policy has been to rely on the private sector for this function to the extent that the private sector demonstrates ability to fulfil the responsibility in the public interest.

Mission
The mission of the FASB is to establish and improve standards of financial accounting and reporting that foster financial reporting by nongovernmental entities that provides decision-useful information to investors and other users of financial reports.

That mission is accomplished through a comprehensive and independent process that encourages broad participation, objectively considers all stakeholder views, and is subject to oversight by the Financial Accounting Foundation’s Board of Trustees.

The FASB accomplishes its mission through a comprehensive and independent process that encourages broad participation, objectively considers all stakeholder views, and is subject to oversight by the Financial Accounting Foundation’s Board of Trustees.

The Rules of Procedure describe the FASB’s operating procedures, including the due process activities that are to be open to public participation or observation to provide transparency into the standards-setting process. In particular, the Rules of Procedure describe:

  • The organization in which the FASB operates
  • The FASB mission, how the mission is accomplished, and related principles that guide the Board’s standards-setting activities
  • The operating procedures of the FASB, including the responsibilities of the Chairman, the composition of the FASB technical staff, the role of advisory groups, the Emerging Issues Task Force, and public forums in our due process
  • Our various forms of communications, including the form and content of Accounting Standards Updates, Exposure Drafts, and Concepts Statements
  • Protocols for meetings of the FASB and voting requirements
  • Rules governing public announcements and the kinds of information made broadly available to the public.

A key principle guiding the Board’s work is to issue standards when the expected benefits of a change justify the perceived costs of that change. The FASB has developed a plain-language Cost-Benefit Analysis summary that explains how the consideration of benefits and costs is integrated throughout the FASB’s standards-setting process. It explains how the FASB

gathers information about potential costs and benefits of standards, as well as how the cost-benefit analysis differs from an analysis of economic consequences.

A high-level overview of the standards-setting process as established by the Rules of Procedure follows. The nature and extent of the Board’s specific research and outreach activities will vary from project to project, depending on the nature and scope of the reporting issues involved.

  1. The Board identifies financial reporting issues based on requests/recommendations from stakeholders or through other means.
  2. The FASB decides whether to add a project to the technical agenda based on a staff-prepared analysis of the issues.
  3. The Board deliberates at one or more public meetings the various reporting issues identified and analyzed by the staff.
  4. The Board issues an Exposure Draft to solicit broad stakeholder input. (In some projects, the Board may issue a Discussion Paper to obtain input in the early stages of a project.)
  5. The Board holds a public roundtable meeting on the Exposure Draft, if necessary.
  6. The staff analyzes comment letters, public roundtable discussion, and all other information obtained through due process activities. The Board redeliberates the proposed provisions, carefully considering the stakeholder input received, at one or more public meetings.
  7. The Board issues an Accounting Standards Update describing amendments to the Accounting Standards Codification.

Required:

(a) Given the process involved in developing standards – which involves asking constituents to make submissions on exposure drafts – do you think that accounting standards developed within the United States of America would be
the same as accounting standards developed in another country? Explain and support your view.

(b) Is it appropriate for accounting standard-setting bodies to consider ‘culture’ and ‘religion’ when devising accounting regulations, particularly given that the output of financial reporting is expected to be objective and unbiased? Explain and support your view.

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