Assessment item 2 Review of Current Accounting Issues Value: 25% Due Date: 15-May-2019 Return Date: 07-Jun-2019 Length: 3,000 words (guide) Submission method options: Alternative submission method...

Question 1:
The report has been prepared on a recent article on accounting. At first the issues have been found out from the article and then the issues have been analyzed properly with the help of several accounting theories and methods. In the end conclusions have been drawn based on the whole study.
The article which have been chosen is ‘Accounting profession faces another moment of truth on financial planning conflicts’ by Andrew Robertson as published in ABC news on 18 February, 2019.

Figure 1: Accounting profession faces another moment of truth on financial planning conflicts (Robertson, 2019).
The article presents the recent development in the quarterly meeting of the Accounting Professional and Ethical Standards Board (APESB). The board discussed an important topic like royal commission and the potential impacts of this on financial services and rest of the time was spent on discussions related to the conflict pay of accountant financial planners. Although the board claims itself to be an independent entity yet it is actually not true since the payments of the board comes from CPA Australia and the Institute of Public Accountants, Chartered Accountants of Australia & New Zealand. So, the actual decisions lie with these entities.
The rise of this issue dates back to 2012 when the board recognized that there were a lot of financial planning scandals going on in the Australian economy and somehow conflicted payments were one of the main reasons for those. Conflicted payments included funds possessed by managements, benefits of soft dollar nature, commissions, etc. All those scandals highly affected the finance market as well as the Australian citizens who invested in all those companies which came under scandals and scams. So, to solve the problem the board issued a standard APES 230, where it tried to declare itself independent and made some remuneration regulations for the accountants, also working as financial planners. APESB announced that to maintain the economy and to control the threats that was necessary.
In fact Kenneth Hayne made a similar opinion on the conflicted remuneration in his report on royal commission. He mentioned that just preaching to be good would make people actually do good work but some strict actions had to be taken about those. The board made an honest effort to prioritize its customers and remove all the conflicts. But the standard proposed by APESB in 2012 was rejected by its controlling authorities.
In the end of the article, the writer expressed his opinion that adoption of APES 230 would have changed the whole scenario and the accountant financial planner would have been successful in establishing their credibility and trust worthiness. Moreover, if the conflict payments issued would have been solved for the accountant financial planner then rest of the financial industry would have also followed them. As mentioned by APESB in the APES 230, consultation phase is the time to resolve the issue from the base. The writer concluded the journal saying that the accounting group lobbies keeping the conflict raise the question if accountants are really professional, doing their duties.
So, the given article relates to a lot of topics as discussed in ACC518 topics. This article related to the topic of accounting and accountants of an organization since the whole article relates to the accounting professions and the practicing accountants in the industry. The next relatable ACC518 topic is agency theory and accounting since the accountant financial planner actually work on the behalf of its customers. The next relatable topic is the social, political, environmental and organizational context of accounting, where not only the client entity but the society as a whole is affected by accounting decisions. The last relatable topic is the standard setting process and international accounting influences since in the article it has been mentioned as to how PESB tried to implement a standard, APES 230 on the accountant financial planner to resolve the issue of conflict payment. Detail discussions will be made next on each of the relatable topic found in the chosen news article.
First it is important to understand the meaning of conflicted payment which is the main issue of the news article presented. So Section 963A of Corporation Act, 2001 provides the following meaning of conflicted remuneration. So, as per the definition, conflicted remuneration is any benefit whether any monetary form or non monetary form is given to a licensed financial service professional or to his representative. The professional provide advice on financial product to his client but the benefit can influence his financial product choice which he propose to the client as well as the advice on financial product which is propose to the client. There can be a wide range of benefits possible but only those will be considered which have the potential of significant influence on the professional. The circumstance of receiving the benefit also needs to be considered to decide if it was of conflicted payment nature.
Now the discussion will be made on how the news article on conflicted remunerations of accountant financial planner link to ACC518 topic of accounting and accountants of an organization. As per the article of Fauré & Rouleau, (2011)    , accountants and the middle managers have a key role in the financial planning and budgeting of an organization. So, the accountant financial planners are hired by a client company to make the financial planning. So, financial planning is a major part of accounting profession and the news article by Robertson, (2019) draw a huge blow to the profession and the on the accountants working across the organizations.
The next relatable topic is agency theory. Agency theory refers to the relation between the agent and its principles where it is expected that the agents will work for the principle’s best interest. Agent principle relation exists between an accountant and its clients (Ballwieser et al., 2012). So, an accountant is expected to work in the best interest of the client. But as per the issue presented in the news article conflicted...