Accounting Theory and Practice Essay

interrogate 1 inquire 1.8What is the disagreement between developing a theory by induction and developing a theory by deduction? heading 2 head teacher 1.9Is the call for of fiscal method of bill theory a bluster of time for score students? let off your answer. caput 3 interrogative mood 1.26Would you reject as insignificant and trivial a positive theory of accounting on the basis that in a erupticular seek study the results derived failed to support the hypotheses and the related theory? explicate your answer.QUESTION 4 unbelief 1.27 (NEW)The International report Standards Board has a number of roles, including formulating accounting standards and developing a conceptual fabric. Is the work they do in developing an accounting standard or the conceptual framework normative or positive in nature?QUESTION 5 interview 1.33 (NEW)In this chapter we provided quotes from Gray, Owen and Adams (2010), in which they discuss an app bent herding phenomenon that seems to b e occurring in respect of the selection and put on of particular theories. They state, there has been a strange herding tendency, especially round authenticity theory, as substantially as stating that they also have a sneaking feeling that institutional theory may be coming up fast as the next theory around which to herd.What do they mean by this app bent practice of herding, and what ar some possible advantages and disadvantages that atomic number 18 related to this practice?QUESTION 6 doubt 1.35 (NEW)Do we really need financial accounting theory if all we are pertained in doing is developing accounting standards?tutorial 2 Semester 2 2014Deegan affairs 2 and 3The financial describe environment and Regulation of financial accountingQUESTION 1 Question 2.3Do you believe that the media portray accounting numbers, such as profits, as some elucidate of hard and objective performance indicator? wherefore do you think they might do this, and, if they do, what are some of th e implications that might arise as a result of this approach?QUESTION 2 Question 2.7Is it appropriate to look at changes or trends in corporate profits over time without reservation any adjustments? Explain your answer.QUESTION 3 Question 2.14If regulators acted in accordance with predictions provided by the private interest theory of rule, which assumes that all individuals (including politicians and regulators) are motivated by their own economic self-interest, what is the likelihood of the introduction of regulations aimed at reducing the problems associated with climate change particularly if business corporations opposed such regulations?QUESTION 4 Question 3.7Is regulation to a greater extent likely to be required in respect of public goods than other goods? Why?QUESTION 5 Question 3.30Accounting headline 3.9 (SEE END OF TUTORIAL 2 QUESTIONS) discusses how European banks were fitting to lobby the European Union (EU) so as to be regulated by a water down version of the accounting standard IAS 39. Explain whether the decision of the EU to embrace a wet down version of the standard is consonant with a public interest theory of regulation sentiment, or whether it can be explained by an alternative theoretical sentiment (which you should attempt to identify).QUESTION 6 Question 3.35Let us assume that the government has become concerned that existing disclosure regulation tends to fixate on the financial performance of organisations moreover fails to address other aspects of corporate performance, including a ruin to provide culture almost corporate social and environmental impacts as well as close various initiatives and investments an organisation has undertaken to improve its social and environmental performance. As such, the government has decided to introduce polity that provide require business corporations to provide development about the social and environmental impacts of their operations, as well as the social and environmental initiatives undertaken by the corporations.You are required to do the future(a) (a) Explain from a public interest theory perspective the rationale for the government introducing the legislation and how the government will at last assess whether any proposed legislation should actually be introduced. (b) forebode 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 theory 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.TUTORIAL 3 Semester 2 2014Deegan Topics 4 and 5International accounting and The conceptual framework projectQUESTION 1 Question 4.19It i s often argued that the accounting standards of the FASB are rule-based, whereas the accounting standards issued by the IASB are principles-based. Rules-based standards by their nature can be quite complex, particularly if they seek to cover as many another(prenominal) situations as possible. Do you think it would be easier to circumvent the requirements of rules-based or principles-based accounting standards?QUESTION 2 Question 4.22Does the calibration of accounting standards on a global basis necessarily equate with a standardisation in accounting practice?QUESTION 3 Question 4.25In considering the relevance of IFRS to developing countries, Chand and washcloth (2007, p.606) state (see below). Explain the reasons behind Chand and Whites claim. While the forces of globalization and convergence are paltry accounting practices towards a unified, or at least, harmonized regulatory framework for financial reporting, this is unlikely to best(p) serve the diverse interests of dispa rate user groups of financial reports.QUESTION 4 Question 4.27Ball (2006, p. 17) makes the following comment (below). Explain the basis of Balls comments. In sum, even a cursory suss out of the political and economic diversity among, IFRS-adopting nations, and of their past and present financial reporting practices, makes the notion that uniform standards alone will produce uniform financial reporting seem nave.QUESTION 5 Question 4.30 (NEW)In continental European countries, prior to the adoption of IFRS, the domestic accounting rules were typically much more aligned with local taxation regulation than would be the end in countries like the unite States, the United Kingdom, Canada, Australia or New Zealand. Why do you think this could have been the case?QUESTION 6 Topic 5 Question 6.7Conceptual framework projects identify a number of qualitative criteria that financial information should possess if it is to be useful for economic decision making. Two such attributes are neutr ality and eidetic confiningness? Do you believe that financial information can, in reality be neutral and representationally faithful? Explain your answer.QUESTION 7 Topic 5 Question 6.10The two main qualitative characteristics that financial information should possess have been identified as relevance and reliability. Is one more important than the other, or are they equally important? TUTORIAL 4 Semester 2 2014Deegan Topic 6Chapter 10 Reactions of large(p) markets to financial reportingQUESTION 1 Question 10.4 (NEW)What is an event study and why would an event study be of relevance to an accounting standard-setter?QUESTION 2 Question 10.9 (NEW)If individuals have access to insider information and are able to make large gains on a securities market as a result of apply information that is not widely known, then is this an indication that the market is inefficient?QUESTION 3 Question 10.16 (NEW)Evidence shows that share damages might not fully react to financial accountin g information promptly and that abnormal returns might persist for a period of time following the release of information (a case of post-announcement drift). Does this indicate that securities markets are not efficient and that assumptions about market efficiency should be jilted?QUESTION 4 Question 10.17If an organisations operations rely heavily on the specialized expertise of its management team, would you expect there to be a higher or a imposecorrespondence between the net assets recognised in the statement of financial position (balance sheet), and the total market value of the organisations securities, relative to an organisation that relies more on tangible assets (for example, commonly employ plant and machinery) to generate its income?QUESTION 5 Question 10.24Refer to Accounting Headline 10.3 (SEE END OF TUTORIAL 4 QUESTIONS) and explain why investors might have reacted to the false rumour. Is the reaction of investors to this false rumour consistent with the view t hat the capital market is efficient or inefficient?QUESTION 6 Question 10.25 critique Accounting Headline 10.7 (SEE END OF TUTORIAL 4 QUESTIONS) and explain the reason for the change in the price of Wesfarmers shares. Also, what might have caused the price changes in the shares in the other retail organisations?QUESTION 7 Question 10.28Read Accounting Headline 10.10 (SEE END OF TUTORIAL 4 QUESTIONS) and, relying on some of the capital markets studies considered in this chapter, explain why the share prices of the pharmaceutical companies might have reacted in the way they did.TUTORIAL 5 Semester 2 2014Deegan Topics 8 and 9 Accounting for Corporate Social ResponsibilitiesQUESTION 1 Question 8.1Explain the notion of a social contract, and what relevance the social contract has with respect to the legitimacy of an organisation.QUESTION 2 Question 8.7If an organization was involved in a major accident or incident, would you expect it to use vehicles such as an annual report or a s ustainabilityreport to try to explain the incident? If so, explain how and why it would use reports in this way.QUESTION 3 Question 8.21 (NEW)Chapter 8 divided Stakeholder speculation into the ethical branch and the managerial branch. Explain the differences between the two branches in terms of the alternative perspectives about when information will, or should, be provided by an organisation.QUESTION 4 Question 9.1What has the environment got to do with accounting (NEW)?QUESTION 5 Question 9.9What is an externality, and why do financial accounting practices typically ignoreQUESTION 6 Question 9.20 (NEW)Explain what is meant by the following statementIn the long term, environmental sustainability is necessity for both social and economic sustainability, so attention to minimising impacts in respect of the environment is necessary to go through a sustainable social and economic future.QUESTION 7 Question 9.35 (NEW)What is a cap-and-trade system and what accounting issues does it create?QUESTION 8What is international integrated reporting and how does it differ from the current financial reporting system we have. TUTORIAL 6 Semester 2 2014Topic 7 positively charged accounting theoryQUESTION 1 Question 7.5Explain why a decision made in London by members of the InternationalAccounting Standards Board and incorporated within an accounting standard could influence the business operate strategies employed by a manager in Melbourne, Australia.QUESTION 2 Question 7.10As part of efforts to develop a revised Conceptual Framework for Financial Reporting, the IASB is currently investigating alternative approaches for cadence the assets and liabilities of reporting entities. In relation to asset measurement it appears that fair value is a favoured option of the IASB. In this regard, would researchers who embrace the view that accounting plays a vital role in reducing the contracting be of an organisation favour the adoption of fair value in all situations? Ca refully explain your answer.QUESTION 3 Question 7.12Would managers who have negotiated debt contracts with accounting-based covenants based around rolling GAAP be relatively more likely to lobby an accounting standard-setter about a proposed accounting standard than would a manager from a firm who has negotiated accounting-based debt covenants that use frozen GAAP. Why or why not? Illustrate development AASB2 Share Based Payments and assume that it is the year 2003.QUESTION 4 Question 7.15Do you think the polity decisions made by members of the International Accounting Standards Board would or should give consideration to the insights provided by Positive Accounting Theory? Why?QUESTION 5 Question 7.17If senior managers within a friendship were rewarded by way of accounting-based bonus plans then would they, or the owners/shareholders (or both), prefer the use of conservative accounting methods? Explain the reasoning for your answer.QUESTION 6 Question 10.22Accepted assumptio ns about market efficiency mean that it is the informationcontent of disclosure, and not the form of the disclosure, that is valued by the market. Therefore it should not matter whether information is disclose within the notes to the financial statements, or in the financial statements themselves. If this is true, then why would managers care if something such as a lease liability is disclose only in the notes, or included within the liabilities disclosed within the balance sheet?