Reference no: EM13837445

Assessment Information

Accounting Theory and Contemporary Issues

Assessment Description

Learning Outcome 1:

Research and argue a position in regard to a contemporary issue in the accounting profession

Learning Outcome 4:

Evaluate the different areas of accounting research, positive accounting theory, capital market research, behavioural research in accounting and emerging issues

Required:

Write a report based on the assignment details noted below. Your report should be approximately 4000 words not including references, abstract and appendices. You should include a word count on your report.

The Assignment is designed to test the following skills:

1. Your knowledge and your ability to research the issues and then apply the information appropriately using judgement

2. Your communication skills - report writing

Individual Research Assignment - Case Study

You are a graduate accountant with a firm of consultants, Business Consult Australia (BCA).

The partners of a rapidly growing and ambitious mid-tier accounting firm Anderson, Rickard and Associates (ARA) have engaged your firm of consultants to provide them with the information necessary to determine whether they should set up a specialist team to help clients with the transition to the proposed new leasing arrangements. The firm has a large number of clients who prepare general purpose financial statements; in turn all of these clients have a significant number of leasing contracts which are accounted for within their financial statements. Some of the concerns raised by the partners during the initial meeting with them are given below.

Leases (equivalent to IAS 17) is in the process of a major revision by the IASB and many clients are concerned about the potential impact of this new leasing accounting standard, once it is finalised. One of the partners of ARA, Marae Rickard, thinks the firm should set up a specialist team to help clients with the transition to the new standard. Marae also commented "We were so busy growing the business; we did not have any input during the consultation process into the presently proposed leasing arrangements. As a rapidly growing firm, clients increasingly expect us to take positions on these matters. If we had a specialist team it will enable us to lobby for change more effectively".
However other partners believe that the issue should be dealt with as part of ‘business as usual' and are happy to leave lobbying to the ‘big 4' and the accounting bodies. The senior partner, Peter Anderson said "we are just one firm and our opinion is really not going to make much of a difference. In any case the Australian accounting standards appear to just follow the International accounting standards, so a specialist team may be a waste of resources".

The partners have requested your firm to compile a wide ranging report into current developments in lease accounting and how they should respond to the challenges raised. Specifically your report should contain (but is not restricted to) advice or responses regarding the following points:

? The background to and reasoning for the proposed changes to the standard

? The current methodology for lease accounting

? The proposed new methodology for lease accounting

? The potential impact on clients of the changes, including which types of business and financial structure will be most 'at risk'

? How the accounting practice can allay client fears about the changes and outline how clients may be able to minimise any negative impacts from these changes

? Making recommendations on how the changes should be communicated to clients (i.e. which methods of communication should be used)

? Arguments for and against having a specialist team to deal with the issue, concluding with a recommendation

? Recommending how staff should be trained on the technical aspects of the leasing proposals, and on ways to deal with client queries

? Arguments for and against the proposed leasing methodology, concluding with a clear view as to the validity of the proposal

? Whilst it is widely considered ‘too late' to influence the initial new leasing standard to be issued your paper will help the partners form future lobbying positions on any further changes to lease accounting - Recommend whether the firm should be actively involved in lobbying in respect of future accounting standard developments and changes (in leasing and other areas).