[Type text][Type text][Type text] TRIMESTER 2, 2019 UNIT CODE: ACC3300 ACCOUNTING THEORY Group Assignment Conceptual framework Case Study TOTAL MARKS: 60 CONTRIBUTION TO OVERALL MARK: 30% Submission...

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[Type text][Type text][Type text] TRIMESTER 2, 2019 UNIT CODE: ACC3300 ACCOUNTING THEORY Group Assignment Conceptual framework Case Study TOTAL MARKS:60 CONTRIBUTION TO OVERALL MARK:30% Submission instructions Assignment must be submitted electronically through Moodle and signed hardcopy must be submitted to the tutor in Week 11 tutorial class. The length of the submitted assignment should be between 2000-2500 words (excluding appendices and references). The assignment should be completed by Group of up to 3 students. Each student will be required to complete an individual component or reflective piece of the assignment. Students will submit the assignment through Moodle. The written component will contribute 20 of the 30 marks for this assessment and the class presentation will contribute 10 of the 30 marks. A signed declaration form must be attached to the front of the assignment. Only one member of the group needs to submit the assignment. The standard penalty for late submission will be 5% of the total possible mark per working day. Group submission must be submitted with an Assignment coversheet, containing the name and ID numbers of all members in the group and signed by all members of the group. All group members must be satisfied that the work has been correctly submitted. Any penalties for late submission will generally apply to all group members, not just the person who uploaded the document to Moodle. Plagiarism All sources of information used in your assignment must be acknowledged. It is an academic misconduct not to acknowledge sources of information used in the submission. To avoid plagiarism, you are required to provide in-text and end of work references for all materials used whenever you include information from other sources in your work. Plagiarism is defined as presenting someone else’s work, including the work of other students, as one’s own. Any ideas or materials taken from another source for either written or oral use must be fully acknowledged, unless the information is common knowledge. The penalties for plagiarism can be severe ranging from a reduced grade for an assessment task through to zero in the assessment. Consequently, you need to avoid plagiarism by providing a reference whenever you include information from other sources in your work. Referencing conventions required for this unit are: Harvard Referencing http://he.ozford.edu.au/mod/url/view.php?id=4893 http://he.ozford.edu.au/mod/url/view.php?id=5976 Conceptual framework The IASB and FASB began a joint agenda project to revisit their conceptual frameworks for financial accounting and reporting regarding the definitions of an asset and a liability as well as new guidance on measurement and derecognition, presentation and disclosure. Both IASB and FASB boards base their accounting standards decisions mainly on the foundation of objectives, characteristics, definitions, and criteria set forth in their existing conceptual frameworks. The goals of the new project are to build on the two boards’ existing frameworks by refining, updating, completing, and converging them into a common framework that both Boards can use in developing new and revised accounting standards. To be principles based, these standards cannot be a collection of conventions but rather must be rooted in fundamental concepts. For standards on various issues to result in coherent financial accounting and reporting, the fundamental concepts need to constitute a framework that is sound, comprehensive, and internally consistent. Without the guidance provided by an agreed-upon framework, standard setting ends up being based on the individual concepts developed by each member of the standard setting body. Standard setting that is based on the personal conceptual frameworks of individual standard setters can produce agreement on specific standard- setting issues only when enough of those personal frameworks happen to intersect on that issue. However, even those agreements may prove transitory because, as the membership of the standard-setting body changes over time, the mix of personal conceptual frameworks changes as well. As a result, that standard-setting body may reach significantly different conclusions about similar (or even identical) issues than it did previously, with standards not being consistent with one another and past decisions not being indicative of future ones. That concern is not merely hypothetical: substantial difficulties in reaching agreement in its first standards projects was a major reason that the original FASB members decided to devote substantial effort to develop a conceptual framework. The IASB Framework is intended to assist not only standard setters but also preparers of financial statements (in applying international financial reporting standards and in dealing with topics on which standards have not yet been developed), auditors (in forming opinions about financial statements), and users (in interpreting information contained in financial statements). Those purposes also are better served by concepts that are sound, comprehensive, and internally consistent. On the other hand, Another common goal of IASB and the FASB is to converge their standards. The Boards have been pursuing several projects that are aimed at achieving short-term convergence on specific issues, as well as several major projects that are being conducted jointly. Moreover, the Boards have aligned their agendas more closely to achieve convergence in future standards. However, the Boards will encounter difficulties converging their standards if they base their decisions on different frameworks. The IASB’s Framework and FASB’s current Concepts Statements that developed chiefly during the 1970s and 1980s, articulate concepts that go a long way toward being an adequate foundation for principles-based standards. Some constituents accept those concepts, but others do not. Although the current concepts have been helpful, the IASB and FASS will not be able to realise fully their goal of issuing a common set of principles-based standards if those standards are based on the current FASS Concepts Statements and IASB Framework. That is because those documents need refinement, updating, completion, and convergence. The planned approach in the joint project will identify troublesome issues that seem to reappear time and time again in a variety of standard-setting projects and often in a variety of guises. That is, the focus will be on issues that cut across several different projects. Because it is not possible to address those cross-cutting issues comprehensively in the context of any one standards-level project, the conceptual framework project provides a better way to consider their broader implications, thereby assisting the boards in developing standards-level guidance. Questions 1. Explain why principles-based standards require a conceptual framework (20 marks) 2. Why is it important that the FASB and IASB share a common conceptual framework? (20 marks) 3. Do you consider that a conceptual framework is more important for some parties than others? Explain your reasoning. (10 marks) 4. What is meant by a ‘cross-cutting’ issue? Suggest some possible examples of crosscutting. (10 marks) Note: Total marks will be converted to 30%. STUDENT ID: ……………………….Full Name: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ACC3200: AUDITING AND ASSURANCE T2/2019 Page 1 of 4 ACC3300: Accounting TheoryT2/ 2019Page 2 of 4 OzfordHE.edu.au 310 King Street Melbourne VIC 3000 Australia T +61 3 8663 7188 E [email protected] Ozford Institute of Higher Education
Answered Same DayOct 12, 2021ACC3200Monash University

Answer To: [Type text][Type text][Type text] TRIMESTER 2, 2019 UNIT CODE: ACC3300 ACCOUNTING THEORY Group...

Sameeksha answered on Oct 15 2021
151 Votes
ACCOUNTING THEORY
Executive Summary
A conceptual framework are those principles which are set to provide guidance to businesses for development of new reporting systems along with that challenging existing systems.
The report is structured in four parts to better understand the conceptual framework and joint efforts of IASB and FASB to bring uniformity in financial reporting and presentation. In this report the first part discusses the importance of conceptual framework in principle-base
d standards in the business.
The second part of the report focusses on the importance of common conceptual framework that the FASB and IASB have decided to design so that the global stakeholders have consistent financial statements.
In the third part of the report explains that conceptual framework is more important at some for some parties than others. It is evident that the conceptual frameworks are a set of principle however depending upon the nature of business, making it useful for some parties and not useful for some.
Further in the last part of the report cross cutting is explained. As per this report cross cutting have long lasting negative impacts on the business if not tackled on time and effective.
Table of Contents
Executive Summary    1
Table of Contents    2
Introduction    3
1. Need of Conceptual Framework for Principles-Based Standards.    3
2. Importance of IASB And FASB Sharing a Common Conceptual Framework    5
3. Importance of Conceptual Framework to different Stakeholders    7
4. Explain ‘Cross-Cutting’ Issue with Supportive Examples    8
Conclusion    8
References    10
Introduction
The conceptual framework was first published in 1989 by The International Accounting Standards Committee (now Board). The purpose of such conceptual framework was to provide a guidance to international as well as national accountants setting standard and to help the auditors and financial statement prepares by providing guidelines to bring consistency in financial reporting at the global level. that International Accounting Standard Board (IASB) and the US Financial Accounting Standard Board (FASB) have come up with the joint goal to converge International Financial Reporting Standards (IFRS) and U.S. GAAP, so that there is harmony in reporting.
1. Need of Conceptual Framework for Principles-Based Standards.
The International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) are those governing boards on the accounting terms which set guidelines regarding reporting, presentation and business disclosures. Both the boards have come forward to bring in their joint project of developing common conceptual framework which happens to be more consistent and complete (Burton & Jermakowicz, 2015)
According to Burton & Jermakowicz, (2015) in the broader terms, Conceptual framework is an effort towards expressing the importance, need and requirement of systematic accounting. Moreover, an accounting conceptual framework as per Zhang & Andrew, (2014) leads to that comprehensible system of ideas and basics which further explains the concept of financial accounting along with its statements such that its description, function and limitations are highlighted.
Aggestam-Pontoppidan & Andernack, (2015) further states that principle-based standards require Conceptual framework as the latter deigns and outlines the vital structure of principles-based standards. This also helps FASB and IASB in designing and setting the standards and further getting the implemented across. Conceptual framework safeguards the business interest also as it sets the limit of fundamental guidelines and nothing can get personal or unpredictable. Also there will always be scope for further advancement in these guidelines however, ACCA has stated that conceptual framework is the driving force of ‘principles-based’ system, yet it is important that the accounting standards must be designed and formulated out of the approved conceptual basis having precise purposes (Gornik-Tomaszewski, et al., 2018)
Further the importance of conceptual framework in developing principle-based standards can be identified from the fact that in absence of a thorough conceptual framework, principle-based standards may face inconsistency for the internal users like accounting experts and even external users like shareholders. Also, as per Zhang & Andrew, (2014) if conceptual framework is not set up there are chances that standards setting may be biased leading to incorrect reporting of financial statements as it will involve more of personal perceptions and less of regulatory framework.
Further Burton & Jermakowicz, (2015) states that conceptual framework is that guiding force which drives the principle-based systems and the latter in turn serves the guidelines of business financial statements reporting and disclosures. Moreover, these financial reporting and disclosures are very important for the internal as well as external...
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