Accounting Theory Assignment
Please choose one topic out of the topics listed below and write an essay. Please keep in mind that a significant proportion of your marks will be weighted how well you integrate your research into your essay.
TOPIC 1: Positive accounting theory
"Explain the difference between (PAT) and normative accounting theory (NAT) and the factors that led to the development of PAT of accounting policy choice. Use examples where appropriate to do so.In setting accounting standards which of these accounting theories (positive or normative) would be applied? Explain your answer clearly giving reasons for your choice.
TOPIC 2: Sustainability and environmental accounting
During a Government inquiry, several years ago, a leading accounting body, made a submission into corporate social responsibility. It showed that that while there was strong public support (over 78%) and shareholder support (above 85%), for making businesses provide social and environmental reporting. These results were not reflected in opinions held by business leaders, who had just over 50% support. The leading accounting body felt that compulsory reporting would not enhance the value of the information provided and create unnecessary regulation. "Given that sustainability reporting is not mandatory, preparing such reports is simply a waste of resources."
Discuss this statement, and explain what advantages do companies think they have in issuing sustainability reporting?
TOPIC 3: Regulation of financial accounting:
In an article discussing relevance IFRS to developing countries by Chand and White (2007), they state that, while the forces of globalisation and convergence are moving accounting practices towards a unified or at least harmonised regulatory framework for financial reporting, this is unlikely to best serve the diverse interests of the disparate user groups of financial reports. What do you understand by harmonisation as opposed to standardization in relation to financial accounting? Explain your answer using examples where appropriate to illustrate your point.