Question 1 - 750 words (4 marks)

According to Chambers (as quoted in Riahi, Belkaoui, 2004, pp. 496-7)

"At any present time, all past prices are simply a matter of history. Only present prices have any bearing on the choice of an action. The price of a good ten years ago has no more relation to this question than the hypothetical price 20 years hence.... no useful inference may be drawn from past prices which has a necessary bearing on present capacity to operate in a market..."

What does Chambers mean by this statement? Critically evaluate whether Continuously Contemporary Accounting (CoCoA - Chambers method of accounting), adequately addresses the problems he alludes to.

Question 2 - 750 words (4 marks)

According to Hines (1991, p.38):

"Conceptual framework projects continue to be undertaken which rely on information qualities such as 'representative faithfulness', 'neutrality', 'reliability', etc., which presume a concrete, objective world, even though past conceptual fameworks have not succeeded in generating accounting standards which achieve these qualities. The very talk, predicated on the assumption of an objective world to which accounts have privileged access via their 'measurement expertise', serves to construct a perceived legitimacy for the profession's power and autonomy".

What does Hines mean by this statement? Are conceptual frameworks an example of political action to ensure the legitimacy of the accounting profession, or do they exist for other reasons? Justify your response.

Question 3 - 750 words (4 marks)

Historical cost accounting continues to be used to prepare financial accounts within annual reports and can be classified as a normative theory. Identify three criteria that can be used to evaluate a theory and apply these to historical cost accounting. Briefly explain why you think historical cost accounting continues to be used as a measurement basis within finanical reporting.

criteria

question 1- Explanation of Chambers statement. Evaluation as to whether CoCoA addresses issues alluded to in statement Critical Capacity and use of Source Material: Does the response demonstrate any analysis of alternative measurement systems Is the critical discussion supported by reference to appropriate sources?

question 2- Explanation of Hines' statement. Evaluation of the roles of the conceptual framework. Critical Capacity and use of Source Material: Does the response demonstrate any critical analysis of conceptual frameworks? Is the critical discussion supported by reference to appropriate sources?

question 3- Description of three criteria which can be used to evaluate a theory. Use of these techniques to evaluate historical cost as a theory of accounting. Does the response demonstrate any critical evaluation of the issues surrounding historical cost accounting? Are the arguments supported through the use of external sources?

reference

Mathews, M. R., & Perera, M. H. B. (1996). The history of accounting to 1900, pp. 8- 18

Deegan (2014) Chapter 2, pp. 35-44

Miller, P., Hopper, T., & Laughlin, R. (1991). The new accounting history: An introduction'. Accounting Organizations and Society, 16(5/6), 395-403.