Accounting Issues and their relationship to Theories

Find out their Relationship to Theories

  1. What accounting issues have been addressed in the article? Briefly summarize the issues and In terms of the accounting issue being discussed, what did you agree/disagree with in the article? Who are the stakeholders? Provide support for all your arguments. 3 paragraphs fin

In example: these are examples and might not apply to the reading.

  • Issues:
    • Over/under statement of profit
    • Over/under statement of balance sheet items
    • Cash flow effect
    • Revenue recognition
    • Off balance sheet finance
    • Valuation and allocation
    • Applying standards (AASB)
  • Stakeholders:
    • Suppliers/creditors
    • Shareholders/investors
    • Management
    • Financial analysts
    • ASX / Sharemarket
  1. How does this article relate to theory/theories discussed in the Advanced Accounting unit?  Demonstrate the connection to a theory. 5+ paragraphs

In example: these are examples and might not apply to the reading.

  • Normative/positive theories
  • Conceptual framework (relevance/ faithful representation)
  • Accounting standards
  • Measurement issues
  • Private incentive theory
  • Agency theory
  • Legitimacy theory
  • Stakeholder theory
  • Capture theory
  • Signaling theory
    • Market for lemons
    • Market for managers
    • Market for corp takeovers
  • Normative theory
    • Conceptual framework
    • Accouting standards
    • Relevance and faithful representation (very important)
    • Timeliness
  • Decision usefulness (lenders/bank)
  • Economic interest theory
    • Positive accounting theory
    • Agency theory
  • Earnings management
    • Good?
    • Bad?
  • Market related incentives
  • Market for managers
  • Market for corporate takeovers
  • Market for lemons
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