ACFI 3001(accounting theory)

1. Conceptual Framework

1. What are the differences between old and new conceptual framework?

= The old conceptual framework?

= The new conceptual framework?

What is the purpose of financial statement?

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Who are they prepared for?

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What are the assumptions to be made when preparing financial statement? e.g. going concern

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What type of information should be included?

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What are the elements that make up financial statements?

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When should the elements if financial statement be included?

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2. What are the benefits and criticisms of the conceptual framework?

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Benefits

• Technical benefits?
• Political benefits?
• Professional benefits?

Problems &criticisms

• Its ambiguous. Why?
• The concept of to be true and accurate is not appropriate. To further explain this?
• The conceptual framework is not consistently the same and applicable to the real world. Why?

2. Standard setting

Explain and define what is an accounting standard?

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How to justify the existence of regulation?

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How? Analyzed standard setting as a political process & lobbying?

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What is:

• Regulation theory =
• Signaling theory =
• Public interest theory=
• Capture theory=
• Bushfire theory=
• Ideology theory of regulation=

3. Measurement

1. what is advantage and disadvantage of:

• Historical cost
• Current value
• Fair value
• Present value

2. Discuss issues to apply the 1. and What is:

• Green assets?
• Heritage assets?
• Water assets?
• Hotel, factory

3. Identify key stakeholders and relevant theory:

1. Agency theory
2. Stakeholder theory

• Managerial branch
• Normative/ethical branch

3. Legitimacy theory

• Social contract

4. Institutional theory

4. Earning Management

What is earning management?

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Why do entities manage earning?

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How corporate governance helps combat earnings management?

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5.

1. Hines said, Accounting constructs reality. Explain.

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2. What are the reasons for and against accounting having regular reporting periods eg. every 12 months?

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3. Quarterly reporting vs Annual reporting?

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4. Explain how legitimacy theory / institutional theory can be applied to explain a situation which happened to you.

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5. Corporate governance principles that would mitigate corporate failures.

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