Reference no: EM131184917
Accounting Theory
Das Auto Case by Angela Tan-Kantor and Christine Jubb both of Swinburne University of Technology
THE CASE
•Background History and Current Status
•Sales and Market Share
•VW Group Stock Market Listings
•Emissions Scandal
•How was VW Group Exposed?
European discrepancies
•Results from United States testing
•Effect of the Emission Scandal on VW Share Price
•Health Effect
•Consequences and Fines
•References
Required: Case Questions
You are asked to prepare a response to the case study questions below. Research for this assignment can be commenced soon after the commencement of semester, but coverage of Topics 7-9 will help in applying the relevant theories. It is expected that you will use at least four scholarly research articles from journals included in the Australian Business Deans' Council (ABDC)1 2013 list to support your application of relevant theories to the case questions.
Your response is to be written as a report of 1,500 words2 (plus or minus the usual 10 per centbeyond this you will be penalised) to the Chair of Australia's Financial Reporting Council that addresses the following questions, not necessarily in the sequence listed below.
That is, you are to structure your report in the way that you see fit, being sure to include content that addresses the following questions whilst also using at least four scholarly research articles from the ABDC list.
Question 1
(i) Consider whether VW Group has broken the terms of its social contract. Apply specific systems-based theories to predict what actions you would expect VW Group management will undertake in periods subsequent to the scandal in terms of its financial accounting disclosure practices.
(ii) Apply relevant systems-based theories to explain the reaction of VW Group management following media announcements of the emissions scandal.
(iii) Use specific systems-based theories to explain the reaction of other companies within the automobile industry following the emission scandal that disclosed environmental pollution.
Question 2
(i) Discuss why and how the share market reacted and its implications for VW Group's share price following the company's media announcement of the emissions scandal.
(ii) Does the market reaction to Volkswagen Group's media announcement imply market efficiency or inefficiency? Elaborate.
Question 3
Explain and discuss using a specific accounting theory or theories why the share prices of other automobile companies changed following VW's share price change.
Question 4
Consider the following annual report content: "VW Financial Services AG looks back on a successful year of business of 2014. We were able to improve on all key figures and once again made a significant contribution to the financial result of the VW Group with a profit of €1.3 billion.
As planned, our company achieved growth in three dimensions, that is with the brands of the VW Group, international expansion into new markets and the introduction of successful products in existing markets" (VW Annual Report 2014, p. 3).
It appears that one of the worst environmental polluters is also one of the most profitable companies. Consider and discuss some of the problems that occur with the use of "profit" as a unit of measurement of a company's success.
Attached is the Case:
Attachment:- Case- Accounting Theory.rar
|
Identifying the market served by these grocers
: In a recent antitrust case, it was necessary to determine whether grocers that specialize in natural and organic foods, such as Whole Foods and Wild Oats, constitute a separate market. How would you go about identifying the market served by these ..
|
|
Calculation of demand responsiveness in linesville
: How does the calculation of demand responsiveness in Linesville change if customers rent two videos at a time? What intuition can you draw from this about the magnitude of price competition in various types of markets?
|
|
Find employment at another brokerage house
: Use Property Rights Theory to explain why stockbrokers are permitted to keep their client lists (i.e., continue to contact and do business with clients) if they are dismissed from their jobs and find employment at another brokerage house.
|
|
What alternatives did you have to achieve desired outcome
: Most people rely on implicit contracts in their everyday lives. Can you give some examples? What alternatives did you have to achieve the desired outcome?
|
|
Discuss why and how the share market reacted
: Discuss why and how the share market reacted and its implications for VW Group's share price following the company's media announcement of the emissions scandal.
|
|
The nature of competition in the restaurant industry
: How would you characterize the nature of competition in the restaurant industry? Are there submarkets with distinct competitive pressures? Are there important substitutes that constrain pricing? Given these competitive issues, how can a restaurant..
|
|
How do health-related millennium development goals address
: Give an example or examples of how populations experience unequal treatment and disparity in healthcare. Provide some statistics to help illustrate this point from the CDC, the textbook, your Resources this week, or another reliable source.
|
|
What is the revenue destruction effect
: Smaller firms often have greater incentive to reduce prices than do larger firms. What does this have to do with the revenue destruction effect?
|
|
Relationship between concentration and price
: Numerous studies have shown that there is usually a systematic relationship between concentration and price. What is this relationship? Offer two brief explanations for this relationship.
|