Accounting -Content assessed:Various normative theories

| January 30, 2017

Assessment item 2

Assignment – 2

Value:15%?Due date:25-Aug-2014 Return date:15-Sep-2014 Length: 1500 wordsSubmission method options

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Content assessed:Various normative theories, measurement issues under IFRS and Conceptual framework

Key generic skills:Research, critical thinking and written communication.

Subject Learning Outcome for Question 1:Be able to apply theoretical knowledge to analyse and synthesize complex issues in the accounting practice.

Question 1 – Short report

8 marks ( 800 words -excluding table of content and references)

Refer to the Article ICAEW (2011) ‘Measurement in financial reporting – information for better market initiative’ Financial Reporting Faculty,

Write a critical comments reporton the above article by focusing on the following points:

Why has accounting measurement become a controversial issue in the recent?debate in financial reporting??In recent years accounting standards have been released, which have shown a movement away from historical costs and a movement towards fair values. Why do you think this is occurring? Further, why do you think that conceptual frameworks have not been amended to stipulate an alternative historical cost – such as fair values??Compare and contract measurement choices, explain in your own words the impact of wrong choices of measurement for an organisation.

Subject Learning Outcome for Question 2 :Be able to critically analyse established knowledge of social power and its influence on financial reporting through legitimize concepts.

Question 2 – Short report

7 marks ( 700 words – excluding table of content and references)

Refer to the article Hines, R. (1991) ‘ The FABS’s conceptual framework, financial accounting and the maintenance of the social world’ , Accounting organization and Society, 16(4),pp. 313-51

Hines made the following statement in her (1991, p.328) article:

Conceptual Frameworks presume, legitimize and produce the assumptions of an objective world and as such they play a part in constituting the social world … Conceptual Frameworks provide social legitimacy to the accounting profession. Since the objectivity assumption is the central premise of our society … a fundamental form of social power accrues to those who are able to trade on the objective assumption. Legitimacy is archived by tapping into this central proposition because accounts

generated around this proposition are perceived as ‘normal’. It is perhaps not surprising or anomalous then that Conceptual Frameworks projects continue to be undertaken which rely on information qualities such as ‘representational faithfulness’ , ‘neutrality’, ‘reliability’ etc. , which presume a concrete, objective world, even though past Conceptual Frameworks have not succeeded in generating Accounting Standards which achieve these qualities. The very talk, predicated on the assumption of an objective world to which accountants have privileged access via their ‘measurement expertise’. serves to construct a perceived legitimacy for the profession’s power and autonomy.

a) Explain and evaluate Hines’ statement – with the exception of quotations, in your own words.

b) Discuss recent developments of the Conceptual Framework referring to the discussion paper on “Review of the Conceptual Framework for Financial Reporting” IASB, (2013).


This assignment is designed to assist you:?* to gather and integrate knowledge in order for you to analyse and comment critically on application of accounting theories;?* to develop your learning through the application of the concepts covered in topics 1 to 3.

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