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file attachedAssessment Brief                              Business Faculty        Accounting Theory  ATH306      Level 300                    Trimester 3 2020    Assessment Brief    ASSESSMENT ONE ATH306_T3 2020 Accounting Theory  Assessment 1      Due: Week 7  Weighting: 20%    Learning Outcomes:    a. Describe the Australian corporate and accounting regulatory framework and its key features, structures, and  associated bodies  b. Describe the Australian corporate and accounting regulatory framework and its key features, structures, and  associated bodies  c. Identify, describe, and discuss the key financial reporting authorities in Australia and the local and international  reporting standards (e.g. IFRS) which govern modern accounting practice  d. Contrast various accounting theories and their role in influencing accounting and reporting practices    Description:    This assignment is developed to ensure that students study regularly and are familiar with the material discussed  and presented in lectures and tutorials in the first half of the subject.  Details:    This assignment is to be submitted by the due date soft-copy though learning management.The assignment is to be  submitted in accordance with assessment policy stated in the unit Outline.It is the responsibility of the student  submitting the work to ensure that the work is in fact his/her own work. Ensure that when incorporating the works of  others into your submission that it appropriately acknowledged.      Question 1            (5 marks)  Why would ‘free-market’ advocates argue that the regulation of financial reporting leads to an oversupply of  accounting rules and standards?    Question 2           (5 marks)  What is meant by saying that financial accounting information is a ‘public good’? Is regulation more likely to be  required in respect of public goods than other goods? Why?    Question 3          (5 marks)  Explain what the Public Interest Theory is (when considering the regulation of financial accounting) and what are two  of the criticisms of this theory?    Question 4                        (5 marks)  What do we mean when we say that financial accounting standards are the outcome of a political process? Why is  the process ‘political’? 	Accounting Theory 	Assessment 1

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Answer 1
The major argument by the free market advocates is that there will be an oversupply of accounting regulations such as standards and disclosures if financial reporting is being regulated. The main reason that is being provided by the advocates is that there will be an overstating of the demands and need of the information if the users of the financial reporting are not required to pay anything for the information. As a result it will encourage regulators to make additional disclosures and other financial information mandatory.
It is also believed by free market advocates that various unrequired costs for the organisations will be created if they will end up producing information that people would not demand if they knew they would have actually paid for it.
There is an another argument by the free market advocates that accounting information should be treated like other goods, and forces of supply and demand should be left to operate freely to determine the optimum amount of information of supply.
This would control the oversupply of accounting rules and regulations.
Answer 2
If the goods that are being traded have free or public characteristics then the market forces will not operate effectively. Only the first consumer might pay for the goods. No cost will be borne by the other people once the goods are being available in the market.

Assessment Brief Business Faculty Accounting Theory ATH306 Level 300 Trimester 3 2020 Assessment Brief ASSESSMENT ONE ATH306_T3 2020 Accounting Theory Assessment 1 Due: Week 7 Weighting: 20% Learning...

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