which accounting theories can use to analysis these two article?

The research assignment comprises five (5) newspaper articles from 2008 demonstrating issues of relevance to accounting

ACCOUNTING THEORIES

• Public Interest Theory
• Capture Theory
• Private Interest Theory (Economic Interest Group Theory) LECTURE FOUR + WORKSHOP FOUR

? Efficient Market Hypothesis

• Legitimacy Theory
• Stakeholder Theory [Two branches of Stakeholder Theory - (1) ethical (moral) and/or normative branch and (2) positive (managerial) branch]

Positive Accounting Theory

• Positive Accounting Theory - opportunistic perspective OR efficiency perspective
• Political Cost Hypothesis
• Management Bonus Hypothesis - opportunistic perspective AND/OR efficiency perspective
• Debt Hypothesis - opportunistic perspective AND/OR efficiency perspective

ARTICLE 1 Criticism Mounts Against New Accounting Rules for Leases - Companies Push Back on Plan to Add Leases to Balance Sheets The Wall Street Journal, Michael Rapoport , Sept. 23, 2013 4:03 p.m. Companies are pushing back against a proposed overhaul of accounting rules for leases that could add hundreds of billions of dollars in debt to the companies' balance sheets. In recent days, hundreds of companies and other critics, including big users of leases such as Gap Inc., GPS +0.86% McDonald's Corp. and FedEx Corp. FDX +0.64% , have sent letters objecting to the proposal to rule- makers at the Financial Accounting Standards Board and the International Accounting Standards Board, which proposed the revamp in May. The new rules would force banks to recognize many leases on their balance sheets that aren't already there, and change how some companies account for the costs of leases in their earnings. The hardest-hit companies, experts said, would be heavy users of leases such as retail and restaurant chains, airlines and companies that lease office equipment. But a broad swath of critics, including FASB's own investor-advisory panel, now say the changes are too complicated and burdensome. "It's way too complex," said David Trainer, a member of the FASB's Investor Advisory Committee, which came out against the proposal last month. The proposed changes "hurt more than they help," said Mr. Trainer, who is chief executive of New Constructs, a Brentwood, Tenn., investor-research firm. The two accounting rule-makers defend the proposal, and are gathering more feedback about it. As part of that effort, they are holding a world-wide series of public roundtables on the proposal, including one Monday at FASB's Connecticut offices. FASB Chairman Russell Golden said the board has "received both support and opposition" to the lease proposals. Investors "seem split," he said. The FASB and IASB will take the feedback into account, he said. Most leases aren't on balance sheets now, and critics of the current rules say off-balancesheet financing makes companies look less indebted than they really are. The proposals would require companies to add to their balance sheets all but the shortest leases, as liabilities akin to debt. The proposal would also set up a two-track system for how lease costs should be reflected in companies' earnings. Costs of real-estate leases would be recognized evenly over the term of the lease, while costs of other leases would be more front-loaded and would decline over the lease term. But there was opposition to the changes from the start. The FASB agreed to issue the proposal only on a split 4- 3 vote, with some FASB members believing the changes were too complex or that the benefits didn't justify the costs. Companies, auditors and others sent more than 450 comment letters to the FASB in the last few days of the public-comment period on the lease proposal, which ended Sept. 13. Many were from companies objecting to some or all of the proposal, and which would be significantly affected if leases were to be added to the balance sheet. FedEx said it wasn't opposed to adding leases to the balance sheet, but said it opposed the two-track model for the income statement. "We'd like to see them pick one or the other," said Herbert Nappier, FedEx's corporate controller. "It's already complex enough as it is." Gap and McDonald's declined to comment. 10 The Equipment Leasing and Finance Association is also strongly against the proposal. "We just think they didn't do enough cost-benefit analysis," said Ralph Petta, the group's chief operating officer. After the FASB and IASB complete their public roundtables on the lease proposal next month, they plan to start considering whether they should make any changes to the proposal around December or January, with an eye toward enacting a final rule in 2014. Mr. Golden, the FASB chairman, said it was too early to say what the boards would do in response to the opposition and other feedback they've received. Mr. Petta predicted that "most likely what will happen is that there will be some changes," although he said he and other critics didn't expect the current proposal to be scrapped entirely. ARTICLE 3 Why has Dick Smith's share price fallen so low, so fast? Sydney Morning Herald, Adele Ferguson, November 30, 2015 Dick Smith has been pilloried by the market, making it even more incredible that Anchorage Capital was able to float the company for $520 million just two years ago. When Woolworths sold consumer electronics group Dick Smith in 2012 to private equity for $94 million, it was accused of selling it for a "peppercorn" after its new owners packaged it up 15 months later and listed it on the ASX with a value of $520 million. Fast forward to today and the stock is being labelled a wipe-out as shareholders slashed its shares 57 per cent, pushing its market value to less than $70 million. The violent reaction followed a disturbing ASX announcement that turned investor jitters into panic. It was based on the company's decision to make a $60 million non-cash impairment before it had completed an inventory review, which was interpreted as a portent of worse to come. In a statement to the ASX - weeks after issuing a profit warning - the company said its October performance was disappointing, November was trading below expectations and stock holdings remain above management's preferred levels. To this end it effectively scrapped its profit guidance and said a further impairment may be required, depending on the Christmas trading. It said a further update would be provided at the half-year results - or earlier if required. That also created worry. Investors are becoming increasingly reactionary when faced with nasty surprises and uncertainty. This was no better illustrated than by the recent savaging of BHP Billiton, or Slater & Gordon's news last week that the British government's flagged changes to the rules on small personal injury claims that could have a negative impact on a recent British acquisition. (The stock rose 34 per cent on Monday, but off a low base). One of the fundamental roles of a retailer is managing inventory. That Dick Smith has got its inventory so wrong, is concerning, particularly when competitors such as Harvey Norman and JB Hi-Fi are doing well. In the past year the share prices in both companies have risen. In sharp contrast, the bloodbath at Dick Smith raises the question: would you let your mother buy from private equity? On the evidence of Dick Smith and other high-profile stocks including Pacific Brands and Myer, there is a lot to fear about private equity. But to be fair, not all private-equity-spawned floats end in tears. A study by Australian Private Equity and Venture Capital Association Limited (AVCAL) shows that in 2013, private-equitybacked IPOs outperformed non- private-equity-backed IPOs. However, in 2014 non-PEbacked IPOs outperformed private-equity-backed IPOs. Anchorage Capital partners bought Dick Smith in 2012, beavered away for 15 months, tarting it up, to sell at a massive premium in December 2013 at $2.20 a share. Private equity made a killing and investors who bought in the float have now seen hundreds of millions of dollars go up in smoke. The company's shares hit a low on Monday of 28 a share. 14 It brings to mind Woolworths' decision to put it up for sale at the end of 2011. Back then Woolworths said the decision to sell was based on the fact the electronics group's performance had been on a downward trend for five years, largely due to structural changes as consumers shifted to lower-margin products. It held discussions with potential buyers and conducted an auction in February 2012 and booked a restructuring provision of $420 million pending the sale. It deemed Anchorage as the only credible offer, which included cash proceeds of $20 million in 2013 and Woolworths "benefiting from any upside resulting from a future sale of Dick Smith by Anchorage". In May 2013, it received a further $74 million and walked away from the ability to share in future upside if Anchorage on-sold the business. In hindsight it might not have been such a bad deal and its conscience is clear when it comes to Dick Smith's shareholders. The latest write-downs and an inability to confirm profit guidance paints a worrying picture for the company. It comes a month after announcing a big-bang discounting and marketing war to help improve sales during the Christmas period. "We're going to drive top-line sales and cash conversion through this period and get momentum back in the business,"Dick Smith boss Nick Abboud told the market in October, just after cutting full-year profit guidance. Now Abboud can't confirm anything, leaving shareholders wondering what to do. It also raises questions about what is really going inside the company, and what has gone so horribly wrong