Recent Question/Assignment

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PRBA005 Accounting Theory: ASSESSMENT 2
Due date: Friday Midnight, Week 6
Length: As required in Part A and Part B.
1500-2000 words (Total assessment words)
Value: 20% of the Total Unit Assessment
Task Case Study: Critical analysis of a given accounting case.
Preparation Study Topics 1-5 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 file.
Front cover: Assignment Cover Page via CDU Learnline
Assessment Font Style and Size: Times New Roman, 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
Left Text Alignment, 1.5 Line Spacing
Total Assessment Words – min of 1500, max of 2000
Use the Harvard method of referencing and ensure the
bibliography style is consistent with the citation style. Do not
number items in the bibliography. 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.
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PRBA005 Accounting Theory: ASSESSMENT 2
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.
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Part A
The European Commission made the following statement in a press release issued in
2002:
“European Commission (EC) has welcomed the Council's adoption, in a
single reading, of the Regulation requiring listed companies, including banks
and insurance companies, to prepare their consolidated accounts in
accordance with the International Accounting Standards (IAS) from 2005
onwards, The Regulation will help eliminate barriers to cross-border trading
in securities by ensuring that company accounts throughout the European
Union (EU) are more reliable and transparent and that they can be more
easily compared. This will in turn increase market efficiency and reduce cost
of raising capital for companies, ultimately improving competitiveness and
helping boost growth.”
Required:
You are required to evaluate the above statement. In particular you should consider:
(a) 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.
(b) Whether the adoption of Internal Financial Reporting Standards (IFRS) in
different countries, with different overview and enforcement mechanisms,
necessarily leads to generation of financial information that is more 'reliable'
and 'comparable'.
(c) Identify and explain the perceived benefits that flow from the decision that a
country will adopt the International Financial Reporting Standards (IFRS).
(d) Identify and explain the perceived disadvantages that flow from the decision
that a country will adopt the International Financial Reporting Standards
(IFRS).

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Part B
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.

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