1. A. Discuss the deductive, inductive and pragmatic research methods. Include in your discussion examples of accounting research that used each method.
B. Why do business managers prefer stable earnings trends?
C. Discuss several methods business manages might be used to smooth earnings?
2. Ernest Chemist in the production of chemical products and selling them locally. The corporation wishes to extend its market and export some of its products. It has come to the attention of the financial director that compliance with international environmental requirements is a significant precondition if it wishes to sell products overseas. Although the corporation has during the past put in place a series of environmental policies, it is clear that it is also common practice to have an environmental audit done form time to time, which will cost approximately GHS120,000. The audit will encompass the following:
i. Full review of all environmental policy directives?
ii. Detailed analysis of compliance with these directives?
iii. Report containing in-depth recommendation of those physical and policy changes that would be necessary to meet international requirements?
iv. The financial director of Ernest Chemical has suggested that the GHS120,000 be capitalized as an asset and then written off against the revenue generated from export activities so that the matching of income and expense will occur.
Comment on the proposed treatment of the environmental audit?
3.a. The advantages and disadvantages of harmonizing accounting standards were summarized in this chapter. Expand on these advantages and disadvantages?