1. State the two findings of the research conducted by Ball and Brown in 1968 into the information content of earnings announcements and the implications of these findings for financial reporting.
2. Outline the agency relationship that applies to equity (manager/owner relationship) and the costs associated with this relationship which contracting can attempt to overcome
3. Differentiate the ‘ethical' and ‘managerial' perspectives of stakeholder theory.
4. Define the Efficient Market Hypothesis and explain its relevance to both streams of capital market research in accounting.
5. Explain why unexpected accounting earnings and abnormal share price returns are expected to be related and identify to which stream of capital markets research this relates.
6. Explain why the book value of a company is expected to differ from the market value of that company.
7. Discuss four (4) limitations of behavioural research in accounting.
8. Define financial instruments and provide an example.
9. Zedbo Ltd incurred substantial costs associated with the upgrade of manufacturing technology this year. Drawing upon Watts and Zimmerman's debt hypothesis, explain whether you would expect Zedbo Ltd to expense or capitalise this cost.
10. Define protocol analysis
11. What is a theory? Explain.
12. Distinguish between inductive and deductive theories.
13. Briefly define a normative theory and provide an example.