Reference no: EM133146372 , Length: word count:3000

HI6025 Accounting Theory and Current Issues - Holmes Institute

Assessment - Conceptual and critical evaluation of theories

Purpose: Students are required to conduct research and analysis of a theoretical financial reporting issue and present their findings in a written report.

Students will have to research relevant literature and demonstrate understanding and critical evaluation of key disclosure issues relating to applying specific accounting standards. Additionally, they will demonstrate understanding and critical evaluation of the Australian financial reporting environment and its current regulatory framework and recommend future directions to the Australian financial reporting regulators

Part A

Assignment Specifications

Referring to the conceptual discussion on the theories of accounting, discuss what theory is and how can we evaluate a good or bad theory. Discuss if the notion of having a good or bad theory is reasonable.

"Maximum 1000 words."

Part B

Many corporations use cost after subtracting accumulated depreciation and impairment losses as a base for measuring their property, plant and equipment (while some use fair value for this measurement purposes).

Requirement:
1) Discuss the issues associated with basing depreciation expense on historical cost rather than other values such as replacement cost.
2) Explain why corporate managers prefer to measure property, plant and equipment using the cost model rather than measuring the assets based on fair value. Discuss if the depreciation expense represents an accounting number that could be relatively easily manipulated as part of the corporate manager's strategy of earning management, and how would a manager do this and why?

"Maximum 2000 words."

Attachment:- critical evaluation of theories.rar