Question 1 and 2. ( two question) Assessment item 2: Short Critical Essays Value: 25%Due date: 19-Sep-2018 Return date: 15-Oct-2018Length: 3,000 words (guide) Submission method: Turnitin Task In...

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Question 1 and 2. ( two question) Assessment item 2: Short Critical Essays Value: 25%Due date: 19-Sep-2018Return date: 15-Oct-2018Length: 3,000 words (guide) Submission method: Turnitin Task In your accounting career you will be required to analyse current accounting issues and communicate your theoretical understanding to your professional colleagues and your clients. For this assignment assume that you are the senior accountant working for a major firm. Question 1 - 9 marks (1,500 words) The CEO has forwarded to you an interesting article and requires you to provide her with a deeper theoretical understanding of the issues discussed so that she can fully engage in the lively discourse at an upcoming conference. You are required to find a newspaper article or web page report of an item of accounting news, i.e. it refers to a current event, consideration, comment or decision that has been published after the 1st of June 2018. Your article could also come from one of the professional journals. The article should not come from an academic journal. You then need to explain the article that you have found in your own words and clearly relate the concepts, ideas and facts within the article to one or more of the theories or topics that you have studied this session. Support your analysis of the assumptions and implications of the topic or theory as appropriate with reference to sources in APA 6 style. NB: You must provide a copy of the article or web page, with details of the source, date and page number with your answer. Answer Guidelines for Question 1. Answering Q1 - 9 marks (1,500 words) The purpose of Q1 is to demonstrate that you can analyse a current accounting issue reported in a news article, and to write a report for the CEO that provides her with a deeper theoretical understanding of the issues identified in the news article. A well-designed answer that addresses the specific aspects of marking rubric will: 1. Present as a report to the CEO 1. Introduction: 1. Include a copy of the news article 1. Identify, describe and discuss the key issues reported in the news article 1. Link the major issues to ACC518 topics and theories: 1. Identify a range of relevant accounting theories that are applicable to the issues reported in the news article 1. Deconstruct and evaluate the issues reported in the news article through the use of theories 1. Present a logical conclusion regarding the significance of the issues reported in the news article 1. Critically evaluate the underlying assumptions of the accounting theories, in particular, with regard to their application to the issues identified in the news article The Guidance outlines a range of relevant literature. First read through the literature in order to gain a greater understanding of the issues being analysed by your paper, then paraphrase your understanding of the concept or issue in your own words. 201860 ACC518 Assignment 2 Guidance: Academic References has been loaded into the 201860 ACC518 Assignment 2 folder in Student Resources on Interact; it contains links to the various publications, relevant APA referencing information for each publication, as well as referencing information for the other prescribed readings (including Deegan). First of all, consider the presentation of this assessment. A well-designed answer will incorporate the following sections: 1. Present as a report to the CEO50 words 1. Introduction: 1. Include a copy of the news article Your paper is meant for the CEO to read, so when you do your analysis of the article, write your response to her. Begin your paper with an introductory paragraph of around 50 words that outlines what your paper will be presenting; write the introduction to the CEO... Here is a template for to use; you need to add in the specific details: Attention: CEO The following report is an analysis of a recent article on accounting... First, the key issues in the article are explained; then accounting theory is used to further explore these issues; and finally conclusions are drawn as to the significance of the article. Then add in a copy of the news article: 1. Deloitte IAS Plus (see 201860 ACC518 Assignment 2 Guidance: Academic References) Figure 1: IASB member discusses the relevance of accounting information ("IASB discusses accounting information", 2018 ) -Take a screen shot from the website and paste a copy of the article into your Word doc. -Format the image: crop, border. -Label the image: Figure 1: IASB member discusses the relevance of accounting information -Reference the image: ("IASB discusses accounting information", 2018) 1. Identify, describe and discuss the key issues reported in the news article375 words Tell the article’s story IN YOUR OWN WORDS clearly outlining the key issues. The article refers to a speech by Ann Tarca; here is the text for the news article: 1. Deloitte IAS Plus IASB member discusses the relevance of accounting information 17 Aug 2018 17 Aug 2018 On 9 August 2018, IASB member Ann Tarca gave a lecture during a conference at the University of Western Australia in Perth. Her speech entitled ‘Check the numbers: Accounting information still matters to you, me and investors around the world’ covered (1) the relationship between accounting information and share prices, (2) whether current accounting practices and economic changes have diminished the role for accounting information, and (3) how the IASB is addressing issues raised by those who consider accounting has lost its relevance. The full version of Ms Tarca’s speech is available on the IASB’s website. The article directs you to Ms Tarca's speech on the IASB's website: 1. IFRS 2018b It is the content of the speech that you will be analysing for your report. The text of the speech has also been loaded into the 201860 ACC518 Assignment 2 folder in Student Resources on Interact: 201860 ACC518 Assignment 2 Q1 Article: Check the numbers Tarca's speech contains a number of issues that are relevant to your studies: 1. The relationship between accounting information and share prices 1. Whether current accounting practices and changes in the economy have diminished the role for accounting information 1. The ways the IASB is addressing the issues raised by those who consider accounting has lost its relevance p.1: Background: The relationship between accounting information and share prices -1960s normative theory -Ball and Brown's ‘An empirical evaluation of accounting income numbers’ and the link to Efficient Market Hypothesis (EMH) p.2: Loss of value relevance: Lev's criticism of the balance sheet (asset) valuation model pp.2-3: Research that provides another view: arguments for the usefulness of accounting information -p.3: for investor decision making, to market participants pp.3-5: Standard-setter response 1: -p.4: IFRS3 and fair value, relevant and representationally faithful information -p.5: fair value bias, the Revised Conceptual Framework for Financial Reporting pp.5-7: Standard-setter response 2: -p.6: IAS38, revaluation of intangibles and Australia in 2005 IFRS13: historical cost, fair value, and the Post-Implementation Review p.7: Analyst response: primary users, financial statements and investment decision making pp.7-8: Conclusion: accounting information matters, IASB seeks to improve financial reporting The following outlines an effective method for answering this section: 1. First print the speech, then read it through in its entirety, making notes as you identify the key issues. Use a highlighter to outline important sections, and write your thoughts in the margin as you go. 1. Next you need to describe these issues by paraphrasing the speech. 1. To paraphrase is to include the ideas or information from an original source in your paper by rephrasing those ideas or information in your own words. The key to successful paraphrasing is to use as few words as possible from the original text (definitely no cut-and-paste/right click synonym), but be mindful not to change the meaning that you are trying to convey as you rephrase. Write with confidence as you extend your post-graduate English language skills... 1. Finally, discuss any identified arguments for/against, advantages/disadvantages or strengths/weaknesses that become apparent as you describe the identified issues. C. Linkage of the major issues reported in the news article to topics and theories covered in ACC518≈850 words The Guidance The Guidance for c) Linkage of the major issues... consists of three subsections: i), ii), iii)… This design helps you to clearly identify the different required aspects: the relevant accounting theories, linking the theories to the issues in the article, and drawing a conclusion about the linkage between the theories and the issues. 1. Identify the relevant accounting theories 100 words 1. Use the accounting theories to explain the issues outlined in the speech 650 words 1. Present a conclusion 100 words Your report Rather than structuring your answer as three distinct subsections, a quality response will integrate all three subsections into a seamless section of approximately 850 words, using paragraphs to distinguish transitions in your thinking. The following outlines an effective method for answering this section: Use a variation of the basic D D E A method of answering an academic question... 1. Definition: Give a brief yet concise outline of the relevant accounting theory 1. Discussion: Link the accounting theory to the issue reported in the article in order to better analyse the issue. Remember, the function of a theory is to explain how things and events are connected, so use the theories to better explain the issues 1. Example: This is directly tied to the issue in the article 1. Answer the question: Explain the significance of the analysis by applying the theory to the issue and drawing a conclusion about the linkage The Marking Rubric indicates that essays which link the issues in the article to accounting theories will be well rewarded. As post-grad students, you should be able employ the D D E A method without using Definition, Discussion, Example & Answer as headings. Rather, D D E A is a functional philosophy that provides a structured way of thinking about your response to an academic assessment... A more appropriate style at this level is to use paragraphs to differentiate each D D E A element of your response. In summary, for each issue from the article, use the relevant theory to better explain the issue, and then draw a conclusion about the linkage. Remember: structure, consistency, attention to detail, so don't 'cut corners' when writing your response. This section of the essay presents you with an opportunity to demonstrate your awareness of the various accounting theories, and how this can be used to provide the CEO with a deeper understanding of the issues in the article. i) Identify a range of relevant accounting theories that are applicable to the issues reported in the news article 100 words There a number of ACC518 topics that are applicable to the news article/speech: 1. Measurement in accounting 0. Measurement is one
Answered Same DaySep 23, 2020ACC518Charles Sturt University

Answer To: Question 1 and 2. ( two question) Assessment item 2: Short Critical Essays Value: 25%Due date:...

Pulkit answered on Sep 27 2020
147 Votes
QUESTION 1
INTRODUCTION
The following report is presented to give an idea of an article “Check the Numbers: Accounting Information still matters to you, me and investors around the world” which was presented by Ann Tarca in a discussion organised by CPA Australia at University of Western Australia and Curtin Business School, Perth, Australia. The discussion laid down by Ann Tarca highlighted three points namely
(1) the impact and the relationship that exists between accounting information and share prices
(2) Whether the accounting information have lost its importance due to changes in the economy and also the accounting practices, and
(3) In what manner the issue as to the loss of value of the accounting dealt with by the International Accounting Standards Board (Board)
Then the article theories are linked to various
measurement in accountings, normative accounting theories, standard-setting process, and international accounting ("Check the numbers", 2018b)
Figure 1: IASB member discusses the relevance of accounting information ("IASB discusses accounting information", 2018).
KEY ISSUES OF THE ARTICLE
· BACKGROUND—BALL & BROWN 1968
Philip Brown alongwith Ray Ball investigated on the topic whether and to what extent the accounting information was useful in the capital markets. Their idea of research was to observe the underlying relationship between the earnings made by the company and the returns made by the stock markets.
The research by Ball and Brown viewed that abnormal profits increased for the firms as a result of unexpected good news before any announcement made with regard to the earnings of the firm. Converse results were observed for bad news firms. After the research conducted by Ball and Brown many researchers have investigated the relationship existing between accounting information, share prices and market returns.
· LOSS OF VALUE RELEVANCE—LEV AND OTHER RESEARCH
Professor Baruch Lev through his presentation at the ICAEW stated there is a growing dissatisfactions for the financial reporting among the investors and other stakeholders with regard to the investment decision and pointed on the increase in the gap between capital markets and the financial information. He pointed to research that shows a growing gap between capital market indicators and financial information in relation to the earnings. The reasons for such gap as per him were the stopping of the use of the traditional accounting system and using the asset valualtion approach to prepare and present the financial statements and also the failure on the part of the account standard setters to adjust the asset recognition criteria.
· RESEARCH THAT PROVIDES ANOTHER VIEW
Dechow, Sloan and Zha through a newspaper replicated that there exists a relationship between accounting information and share price and also the share price of the entity is a reflection of the accounting information of the entity. A study conducted by Professor Mary Barth from Stanford University find no evidence as to the fall in the importance of accounting information on the basis of the samples selected by them. They in turn found that the increase in the importance of the accounting amounts for intangible assets, growth opportunities and other performance measures which indirectly is associated with the earnings of the company.
· STANDARD-SETTER RESPONSE—LEV 1: BALANCE SHEET FOCUS/IFRS 3/CONCEPTUAL FRAMEWORK
The Board not works alone it works in consultation with preparers, auditors, regulators and investors. The Board is currently working on the requirements as to the changes in the Statement of Financial Performance which will entail the entities to provide more specific totals and sub-totals and also classification of different items. It is proposed that the management performance need to be presented within financial statements and subject to reconciliation and audit.
In reference to the criticism by Professor Lev we observe the IFRS 3 which applies to the accounting of the acquisition of the assets by the company which require the assets to be recorded at their fair value. Thus the objective of accounting standards setter by way of providing the relevant accounting standards is to present the true and fair view of the state of affairs of the company and also the accounting information. Traditionally the acquirer used to record the assets at historical cost and the assets having useful life shown at amortised value that is amortised cost is deducted.
However, this accounting treatment made comparison difficult and companies undertaking more of acquisitions may show higher cost of goods sold and amortisation expense in relation to the value of inventories. Converse is the situation for companies not growing because of acquisition and creates intangible assets such as brands and customer image.
· STANDARD-SETTER RESPONSE—LEV 2: RECOGNITION OF INTANGIBLE ASSETS
The second criticism from Lev as to the failure of the standard setters to adjust the asset recognition rules in order to comply with the changes in the economy. The IFRS Standards allow the capitalisation of some of the development expenses and as per Lev view the development costs are highly correlated with market values.
Ann Tarc finds several benefits in the points raised by Professor Lev and the same leads to find the way the Standards require assets recognition. Lev suggests that the standard-setters need to rethink on the accounting for intangible assets. He suggests the capitalisation of expenditure for example internally generated patents, copyrights, software, customer lists on the intangible assets with the aim to match the revenue and expense. The learned speaker throws light on the implementation and supporting the implementation of IFRS 15, 9, 16 and 17.
· ANALYST RESPONSE TO LEV—NICK ANDERSON
Nick points to the range of information that an analyst may use, and also the skills and experience necessary to make wealth enhancing decisions from the available information. We know that investors and others make use of a wide range of information and that many entities seek to provide information to complement the financial statements through their management commentary reports.
· CONCLUSION
Ann Tarca concluding the discussion and referred accounting information as ‘the life-blood of capital markets’. In his view accounting information still matters a lot to the entities and other interested parties like accountant, auditor, analyst and also investors in taking investment decisions. The Board is continuously engaged in developing such standards as are needed to promote growth and stability.
MAJOR ISSUES LINK TO THEORIES
The link of the above mentioned article to various theories of management accounting, normative accounting, standard setters, International Accounting is discussed in the following paras:
Professor Barth’s in his survey finds no decline in the value relevance of earnings for Australian firms in comparison to US firms. Many researchers in addition to investigate about the value of accounting information also investigated the usefulness of EBIT and EBITDA and found that both constitute as an important measure of decision making by the investors. There are evidences as to the items affecting the share prices of the company not only constitute earnings made by the company but also other factors are also to be taken into account.
In reference to the criticism by Professor Lev we observe the IFRS 3 which applies to the accounting of the acquisition of the assets by the company which require the assets to be recorded at their fair value. Thus the objective of accounting standards setter by way of providing the relevant accounting standards is to present the true and fair view of the state of affairs of the company and also the accounting information. Traditionally the acquirer used to record the assets at historical cost and the assets having useful life shown at amortised value that is amortised cost is deducted.
However, this accounting treatment made comparison difficult and companies undertaking more of acquisitions may show higher cost of goods sold and amortisation expense in relation to the value of inventories. Converse is the situation for companies not growing because of acquisition and creates intangible assets such as brands and customer image.
The...
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