Hello, please help me these questions that attached in this request. Thank you very much

Swinburne University of Technology ACC80005 FINANCIAL ACCOUNTING THEORY Primary Exam Semester 1, 2016 Exam information This is a take home exam This paper represents 60% of the final assessment for this subject. Marks on the paper total 100. There are 2 parts to this exam. Part A consists of 20 Multiple Choice Questions. Part B includes 4 questions. Answer all questions. Remember to write the number of the question you are answering on each page. There is a separate sheet for answering the Multiple Choice Questions at the end of Part A. The exam answers should be submitted as a Microsoft \"Word\" file through the Turnitin System on Blackboard. A coverpage should be attached to your submission. The coverpage template is available on Blackboard. Only one file should be submitted and it should include your answers to the MCQs and essay questions and the coverpage. To avoid plagiarism, you are required to provide a reference whenever you include information from other sources in your work. Both in-text citations, as well as a reference list, is required. Referencing convention required for this unit is the Swinburne Harvard System. Helpful information on referencing using the Swinburne Harvard System can be found at: http://www.swinburne.edu.au/lib/studyhelp/harvard_style.html Swinburne University of Technology Faculty of Business & Law ACC80005 Financial Accounting Theory PART A - Multiple Choice Questions (1mark x 20 = 20 Marks) This section contains 20 multiple choice questions. Answer all questions. 1. Critical researchers accuse financial accounting of: (A)Being open to manipulation by self-interested managers. (B)Reinforcing unequal distributions of wealth and power. (C)Being irrelevant to management decision-making. (D) Giving inaccurate predictions of share price movements. 2. Critical researchers believe that accounting information: (A)Is neutral and unbiased. (B)Benefits neither the rich nor poor. (C)Is used by the elite to maintain their power. (D) Challenges existing social orders. 3. Critical researchers believe: (A)They are objective and neutral, but that non-critical researchers are biased and partisan. (B)They are biased and partisan, but that non-critical researchers are objective and neutral. (C)That both critical and non-critical researchers are objective and neutral. (D) That both critical and non-critical researchers are biased and partisan. 4. Critical researchers interpret the post-Enron increase in mandatory corporate reporting as primarily benefiting: (A)Society, as corporations are required to improve their level of disclosure. (B)Corporations, as confidence will be restored to financial markets. (C)Employees, as fewer companies will go bankrupt. (D) Accountants, as demand for accounting services, will increase. Page 2 of 12 Swinburne University of Technology Faculty of Business & Law ACC80005 Financial Accounting Theory 5. Behavioural research is concerned with how: (A)Individuals behave when provided with particular items of information. (B)Individuals should behave when provided with particular items of information. (C)Firms behave when provided with particular items of information. (D) Firms should behave when provided with particular items of information. 6. Which of the following statements is true when comparing behavioural research with capital markets research? (A)Both behavioural research and capital markets research assess the aggregate effect of financial reporting. (B)Both behavioural research and capital markets research analyse individual responses to financial reporting. (C)Behavioural research analyses individual responses to financial reporting, while capital markets research assesses the aggregate effect of financial reporting. (D) Capital markets research analyses individual responses to financial reporting, while behavioural research assesses the aggregate effect of financial reporting. 7. Which of the following statements is not true about behavioural research? (A)There can ultimately be a normative component to behavioural research. (B)Behavioural research can be classified as positive research because it seeks to explain particular actions or behaviours. (C)Behavioural research is typically grounded in organisational theory and theories from psychology and sociology. Page 3 of 12 Swinburne University of Technology Faculty of Business & Law (D) ACC80005 Financial Accounting Theory Behavioural research is an example of economics-based theories where assumptions about what motivates human actions are made and such motivations are attributed to all individuals. 8. Capital markets research assumes that markets are: (A)Semi-strong-form efficient (B)Strong-form efficient (C)Weak-form efficient (D) Inefficient 9. Semi-strong-form market efficiency means that the information reflected in security prices is: (A)All publicly available financial information. (B)All public and private information. (C)All publicly available information. (D) 10. All information about past prices and trading volumes. Semi-strong-form market efficiency suggests security prices will change when: (A)Unexpected earnings results are announced. (B)Earnings results are announced. (C)Cash flow results are announced. (D) 11. All of the given options are correct. According to the findings of capital markets research, the existence of post-announcement abnormal returns for a given firm suggests that for firms in the same industry: (A)Subsequent post-announcement abnormal returns will increase. (B)Subsequent post-announcement abnormal returns will decrease. (C)There will be no effect on subsequent post-announcement abnormal returns. Page 4 of 12 Swinburne University of Technology Faculty of Business & Law (D) ACC80005 Financial Accounting Theory It is impossible to predict the effect on subsequent post- announcement abnormal returns. 12. The book value is generally less than the market value of a firm because: (A)Capital markets are not strong-form efficient. (B)Certain intangibles may not meet the asset recognition criteria. (C)Assets may be overvalued by unethical managers. (D) 13. The market values of assets are difficult to measure. Which of the following best describes the view taken by Milton Friedman in relation to the role of companies? (A)Companies are an integral part of society, and as such should adopt the highest ethical principles. (B)Companies, as part of society, should act in the interests of the harmonisation of society and the environment. (C)Companies should detach themselves from the environment and focus on maximising the benefits to society. (D) Companies should distance themselves from the community in which they operate and focus solely on maximising the returns to shareholders. 14. Which of the following statements relating to Stakeholder Theory explain why companies disclose social and environmental information: (A)Disclosures are linked to providing evidence that an entity is complying with the expectations of society. (B)Disclosure depends on the expectations of powerful stakeholders, if the managerial perspective of Stakeholder Theory is embraced. (C)Disclosure depends on positive wealth implications. (D) Organisations will adopt particular practices because of institutional pressures. Page 5 of 12 Swinburne University of Technology Faculty of Business & Law ACC80005 Financial Accounting Theory Page 6 of 12 Swinburne University of Technology Faculty of Business & Law 15. ACC80005 Financial Accounting Theory Empirical findings consistent with Legitimacy Theory would be increased disclosure of: (A)Environmental good news, immediately following prosecutions for breaches of environmental standards. (B)Environmental bad news, immediately following prosecutions for breaches of environmental standards. (C)Environmental good news, immediately preceding prosecutions for breaches of environmental standards. (D) Environmental bad news, immediately preceding prosecutions for breaches of environmental standards. 16. The moral perspective of Stakeholder Theory holds that all stakeholders have the right to be treated fairly by an organisation: (A)Provided this improves the organisation's financial performance. (B)Regardless of the impact on the organisation's financial performance. (C)Because, in the long run, this will improve the organisation's financial performance. (D) 17. Because unfair treatment will result in public backlash. Managerial Stakeholder Theory suggests that annual reports will be used to: (A)Gain the support of powerful stakeholders. (B)Report on the activities of management with respect to each stakeholder. (C)Explain why profits may have been sacrificed in order to respect the minimum rights of some stakeholders. (D) To achieve social legitimacy by explaining how the company upheld the social contract. 18. Institutional Theory suggests which of the following? Page 7 of 12 Swinburne University of Technology Faculty of Business & Law ACC80005 Financial Accounting Theory (A)While organisational structures are initially varied, they are gradually homogenised by competition, the state and professions. (B)While organisational structures are initially homogenous, they are gradually varied by competition, the State and professions. (C)The organisational structure is determined by institutional factors such as management style and organisational culture. (D) The organisational structure is determined by the organisation's most powerful stakeholders. 19. Which statement describes the relationship between Institutional Theory (IT), Legitimacy Theory (LT) and Stakeholder Theory (ST)? (A)IT is a normative theory while LT and ST are positive theories. (B)IT is a more detailed version of LT, and is broadly consistent with ST. (C)The mechanisms IT suggests firms will use to align the perceptions of their performance with society's values could include the mechanisms suggested by LT and ST. 20. An organisation disclosing social and environmental information because a competitor was gaining a competitive advantage by doing so, is an example of: (A)Mimetic isomorphism (B)Coercive isomorphism (C)Normative isomorphism (D) Positive isomorphism Page 8 of 12 Swinburne University of Technology Faculty of Business & Law ACC80005 Financial Accounting Theory Answers to the Multiple Choice Questions Should be provided in this answer sheet. Instructions for answering the multiple choice questions: fill in box indicating your choice of the BEST answer. Example 31. a bn c d 1. ac bc cc dc 11. ac bc cc dc 2. ac bc cc dc 12. ac bc cc dc 3. ac bc cc dc 13. ac bc cc dc 4. ac bc cc dc 14. ac bc cc dc 5. ac bc cc dc 15. ac bc cc dc 6. ac bc cc dc 16. ac bc cc dc 7. ac bc cc dc 17. ac bc cc dc 8. ac bc cc dc 18. ac bc cc dc 9. ac bc cc dc 19. ac bc cc dc 10. ac bc cc dc 20. ac bc cc dc PART B - Essay Questions QUESTION 1 (20 Marks) Page 9 of 12 Swinburne University of Technology Faculty of Business & Law ACC80005 Financial Accounting Theory New lease standards add burden to tenants, landlords By Yeow Chee Keong and Chen Voon Hoe AFTER nearly five years of deliberation, the International Accounting standards Board (IASB) issued the revised leasing standard IFRS 16 in January 2016. IFRS 16 will replace the current IAS 17 for companies with annual reporting periods beginning on or after Jan 1, 2019. Before the new standard becomes effective, tenants, landlords and stakeholders should take the time to understand the implications that the new standard might have on them and for Singapore's real estate industry. Tenant's perspective Currently under IAS 17, property lease contracts are classified as either operating leases (where they are not part of assets and liabilities commonly referred to as "off balance sheet") or finance leases (where they are included in assets and liabilities - commonly referred to as "on balance sheet"), with the majority classified under the former. When IFRS 16 comes into effect, almost all leases will have to be recognised as "right of use" assets with corresponding lease liabilities. This will have an impact on the tenant's key financial metrics, including increased leverage ratios and potentially lower return on assets. In addition, tenants will need to split the lease and non-lease (such as service charge) components in the contract and recognise only the lease components on the balance sheet. In a recent PwC study on the impact of the new lease standard on tenants across all industries and sectors, it was found that 53 per cent of entities surveyed will see an increase in their debt of over 25 per cent. Zooming into the retail sector, the survey found that the median increase in debt for retail companies is 98 percent, effectively almost doubling their debt. In addition, the new standard's additional requirements on disclosures, contract and data management may incur significant costs for tenants - in terms of finances and other resources. Retailers in Singapore are already facing pressures on their operating models, and this clearly is something retailers need to prepare for. (Source: HUB, 9 April 2016) a) Explain how the new accounting treatment for leases under IFRS 16 would affect tenants who have entered into debt covenants with creditors. Also, explain from the perspective of the debt hypothesis of Page 10 of 12 Swinburne University of Technology Faculty of Business & Law ACC80005 Financial Accounting Theory Positive Accounting Theory (PAT) what actions such tenants might take. (5 marks) b) Are changes to accounting standards, such as the one explained in the above article, likely to have social and economic consequences? What are the possible social and economic consequences that may result from adoption of IFRS 16 Leases? (10 marks) c) Should accounting standard setters consider social and economic consequences of accounting treatments when developing accounting standards? Discuss in relation to objectives and qualitative characteristics of general purpose financial reports as stated in the Conceptual Framework of the Australian Accounting Standards Board. (10 marks) QUESTION 2 (20 Marks) a) Identify a positive theory (it can be about any area of accounting). Explain the identified theory and provide an example of a situation where the selected theory can be tested. Explain how the identified theory can be tested in the example you developed. (10 Marks) Note: Positive Accounting Theory (PAT) is only one type of positive theory. The question relates to any positive theory in accounting. b) Can you prove a theory of accounting? Discuss in relation to both normative and positive theories. When formulating your answer explain the difference between positive and normative theories, providing at least one example from accounting. (10 Marks) QUESTION 3 (20 Marks) a) Discuss, using examples in relation to assets, liabilities, income and expenses, the role professional judgement plays in measuring items in the financial statements. Based on your discussion conclude whether professional judgement allowed under the accounting standards can have a material impact on reported profits. (10 marks) b) Does the Australian Accounting Conceptual Framework issued by the Australian Accounting Standards Board (AASB) highlight stewardship, Page 11 of 12 Swinburne University of Technology Faculty of Business & Law ACC80005 Financial Accounting Theory decision usefulness or both? You are required to explain these two terms, differentiating between the types of information relevant for each of them and provide evidence from the Conceptual Framework to highlight aspects consistent with stewardship and/or decision usefulness. (10 marks) QUESTION 4 (20 Marks) Businesses voluntarily provide a substantial amount of social and environmental information to the public. Deegan (2014, p.489) highlights that, \"business entities and business associations typically make submissions to government which argue in favour of maintaining the voluntary status of social and environmental performance reporting. That is, they typically oppose the introduction of legislation to require them to report information about their social and environmental performance\". [Reference: Deegan, C. 2014. Financial Accounting Theory, North Ryde: McGraw-Hill] a) Adopting a critical perspective of accounting, explain why businesses provide social and environmental information yet oppose reporting of such information to be regulated. (10 Marks) b) Provide arguments to support the view that companies may not provide an optimal level of social and environmental information even in the absence of regulation mandating companies to report such information. (10 Marks) Page 12 of 12