Accounting

1 of 5

S116 ACT301 Accounting Theory and Contemporary Issues: ASSESSMENT 1

Due date:

Week 9, Friday Midnight CST (6 May 2016)

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 21 st 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.

2 of 5

S116 ACT301 Accounting Theory and Contemporary Issues: ASSESSMENT 1

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.

Be aware that any evidence of plagiarism will be investigated and

disciplinary action taken.

See the sections on plagiarism on CDU Learnline.

DO NOT LODGE BY FAX nor EMAIL nor at LECTURER'S OFFICE

KEEP A COPY

Oral Test or Viva Voce Lecturers may, at their discretion, ask students to verbally present their assignment submissions or rewrite some

selected part/s of their answer in a controlled setting. Lecturers may exercise this discretion where they feel that

the assignment was not the student’s own work.

University Plagiarism policy Plagiarism is the unacknowledged use of material written or produced by others or a rework of your own material.

All sources of information and ideas used in assignments must be referenced. This applies whether the

information is from a book, journal article, the internet, or a previous essay you wrote or the assignment of a

friend. Plagiarism policy is available at: http://www.cdu.edu.au/governance/policies/pol-001.pdf and Student Breach of Academic Integrity Procedures http://www.cdu.edu.au/governance/procedures/pro-092.pdf

Extensions and Late Lodgements

LATE ASSIGNMENTS WILL GENERALLY NOT BE ACCEPTED UNLESS AN EXTENSION TO THE

DUE DATE HAS BEEN GRANTED BY THE HEAD OF SCHOOL.

Exceptions will only be made where assignments are late due to special circumstances that are supported by

documentary evidence, and may be subject to a penalty of 5% of assignment marks per day. Partially completed

assignments will be accepted with appropriate loss of marks for the incomplete portion.

Should students foresee potential difficulties with submission of assessment items, they should contact the lecturer

immediately the difficulties come to notice, to discuss suitable arrangements etc. for the submission of those

assessment times. An Application for Assignment Extension or Special Consideration should be completed and

provided to the Head of School, School of Law and Business.

This application form, explanation and instructions is available on the ACT301 CDU Learnline course site or

direct from

http://learnline.cdu.edu.au/units/lb_school_templates/deployed/assignment_extension.docx

Please note that it is now Faculty policy that all extension requests must be approved by the Head of School. The

lecturer is no longer able to personally approve extension requests.

Leaving a request for an extension, special assessment or special consideration until the last moment, based on

grounds that students could have reasonably been able to foresee, may result in the application being rejected.

Ensure that you maintain suitable backup copies of your assignment during preparation, before completion and

after lodgement. Loss of data/assignment due to failure to maintain a suitable backup will not constitute grounds

for an extension.

3 of 5

Part A

The government of the Republic of the Philippines (RP) 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, RP 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 RP

introducing the legislation and how RP 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.

(d) That it is argued that the process of the regulation of financial accounting is

‘political’ in nature? Do you agree or disagree? Explain your answer.

4 of 5

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.

5 of 5

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.