Assessment item 2</o:p> Review of Current Accounting Issues</o:p> Value: 25%</o:p> Due Date: 15-May-2019</o:p> Return Date: 07-Jun-2019</o:p> Length: 3,000 words...

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Assessment item 2

Review of Current Accounting Issues

Value:25%

Due Date:15-May-2019

Return Date:07-Jun-2019

Length:3,000 words (guide)

Submission method options:Alternative submission method

Task

In your accounting career you will be required to analyse current accounting issues and communicate your theoretical understanding to your professional colleagues and your clients. For this assignment assume that you are the senior accountant working for a major firm.

Question1 - 1,500 words

The CEO has forwarded to you an interesting article and requires you to provide her with a deeper theoretical understanding of the issues discussed so that she can fully engage in the lively discourse at an upcoming conference.

You are required to finda newspaper article or web page report of an item of accounting news, i.e. it refers to a current event, consideration, comment or decision that has been published after the 1st of January 2019. Your article could also come from one of the professional journals. The article should not come from an academic journal. Academic journals generally do not contain news articles or articles of less than one page and are usually only published 2 or 4 times a year. Your article should also relate to a different issue to what you will be investigating in Question 2 (in other words, don't use an article about the exposure draft you will be using in question 2). If you are having a problem ensuring that your article is from an appropriate source contact your subject coordinator.

You then need to explain the article that you have found in your own words and clearly relate the concepts, ideas and facts within the article to one or more of the theories or topics that you have studied this session. Support your analysis of the assumptions and implications of the topic or theory as appropriate with reference to sources in APA 6 style. For example,this articlefrom the Sydney Morning Herald in April 2016 could be linked to the topics of accounting regulation and measurement (and perhaps others). You must provide a copy of the article or web page, with details of the source, date and page number with your answer.

Question 2 - 1,500 words

The Senior Partner of the firm you work for has appointed you to a new role. It is now your responsibility to review upcoming accounting standards and provide a report to the partners on the proposed standard and the opinions of other industry players on the changes.

Firstly, you are required to find acurrent exposure draft or proposal for a new accounting standard which has been opened for public comments. (These can be found on the websites of most standard-setting organisations, such as the IASB, AASB and FASB. Hint: These websites can be quite difficult to navigate, so as a first step try typing “IASB exposure draft and comment letters”/”FASB exposure draft and comment letters” into Google or other search engine of your choice). Read a sample of the comments from a range of respondents. Select four respondents, ideally from different types of organisations for example, from accounting bodies, industry, companies orcorporate bodies.

In your own words, supporting your evaluation with appropriate citations, appropriately referenced in APA 6 style, you are required to include the following information in the report.

  • An outline of the major issues covered in the exposure draft (what is the exposure draft introducing or changing?).
  • An assessment as to whether (or not) the behaviour of the regulator in introducing the exposure draft can be explained by public interest theory.
  • An outline of the views presented in the comments letters which highlights the areas of agreement and disagreement with the exposure draft.
  • An application ofeachof the theories of regulation (public interest, private interest and capture) to the comments letters and a justification as to which theory(ies) best explains the comments.

Please note: you need to attach the comment letters you selected for your report (there is no need to attach the exposure draft)

Answered Same DayMay 13, 2021ACC518Charles Sturt University

Solution

Preeta answered on May 16 2021
44 Votes
Question 1:
The report has been prepared on a recent article on accounting. At first the issues have been found out from the article and then the issues have been analyzed properly with the help of several accounting theories and methods. In the end conclusions have been drawn based on the whole study.
The article which have been chosen is ‘Accounting profession faces another moment of truth on financial planning conflicts’ by Andrew Robertson as published in ABC news on 18 Fe
uary, 2019.

Figure 1: Accounting profession faces another moment of truth on financial planning conflicts (Robertson, 2019).
The article presents the recent development in the quarterly meeting of the Accounting Professional and Ethical Standards Board (APESB). The board discussed an important topic like royal commission and the potential impacts of this on financial services and rest of the time was spent on discussions related to the conflict pay of accountant financial planners. Although the board claims itself to be an independent entity yet it is actually not true since the payments of the board comes from CPA Australia and the Institute of Public Accountants, Chartered Accountants of Australia & New Zealand. So, the actual decisions lie with these entities.
The rise of this issue dates back to 2012 when the board recognized that there were a lot of financial planning scandals going on in the Australian economy and somehow conflicted payments were one of the main reasons for those. Conflicted payments included funds possessed by managements, benefits of soft dollar nature, commissions, etc. All those scandals highly affected the finance market as well as the Australian citizens who invested in all those companies which came under scandals and scams. So, to solve the problem the board issued a standard APES 230, where it tried to declare itself independent and made some remuneration regulations for the accountants, also working as financial planners. APESB announced that to maintain the economy and to control the threats that was necessary.
In fact Kenneth Hayne made a similar opinion on the conflicted remuneration in his report on royal commission. He mentioned that just preaching to be good would make people actually do good work but some strict actions had to be taken about those. The board made an honest effort to prioritize its customers and remove all the conflicts. But the standard proposed by APESB in 2012 was rejected by its controlling authorities.
In the end of the article, the writer expressed his opinion that adoption of APES 230 would have changed the whole scenario and the accountant financial planner would have been successful in establishing their credibility and trust worthiness. Moreover, if the conflict payments issued would have been solved for the accountant financial planner then rest of the financial industry would have also followed them. As mentioned by APESB in the APES 230, consultation phase is the time to resolve the issue from the base. The writer concluded the journal saying that the accounting group lo
ies keeping the conflict raise the question if accountants are really professional, doing their duties.
So, the given article relates to a lot of topics as discussed in ACC518 topics. This article related to the topic of accounting and accountants of an organization since the whole article relates to the accounting professions and the practicing accountants in the industry. The next relatable ACC518 topic is agency theory and accounting since the accountant financial planner actually work on the behalf of its customers. The next relatable topic is the social, political, environmental and organizational context of accounting, where not only the client entity but the society as a whole is affected by accounting decisions. The last relatable topic is the standard setting process and international accounting influences since in the article it has been mentioned as to how PESB tried to implement a standard, APES 230 on the accountant financial planner to resolve the issue of conflict payment. Detail discussions will be made next on each of the relatable topic found in the chosen news article.
First it is important to understand the meaning of conflicted payment which is the main issue of the news article presented. So Section 963A of Corporation Act, 2001 provides the following meaning of conflicted remuneration. So, as per the definition, conflicted remuneration is any benefit whether any monetary form or non monetary form is given to a licensed financial service professional or to his representative. The professional provide advice on financial product to his client but the benefit can influence his financial product choice which he propose to the client as well as the advice on financial product which is propose to the client. There can be a wide range of benefits possible but only those will be considered which have the potential of significant influence on the professional. The circumstance of receiving the benefit also needs to be considered to decide if it was of conflicted payment nature.
Now the discussion will be made on how the news article on conflicted remunerations of accountant financial planner link to ACC518 topic of accounting and accountants of an organization. As per the article of Fauré & Rouleau, (2011)    , accountants and the middle managers have a key role in the financial planning and budgeting of an organization. So, the accountant financial planners are hired by a client company to make the financial planning. So, financial planning is a major part of accounting profession and the news article by Robertson, (2019) draw a huge blow to the profession and the on the accountants working across the organizations.
The next relatable topic is agency theory. Agency theory refers to the relation between the agent and its principles where it is expected that the agents will work for the principle’s best interest. Agent principle relation exists between an accountant and its clients (Ballwieser et al., 2012). So, an accountant is expected to work in the best interest of the client. But as per the issue presented in the news article conflicted...
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