|S117 ACT301 Accounting Theory and Contemporary Issues: ASSESSMENT 1|
|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 of 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.
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:
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 fulfill the responsibility in the public interest.
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:
A key principle guiding the Board’s work is to issue standards when the expected benefits of a change just 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.
(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 viewOrder Now