A CC 3 11 6 Ac c ount ing and Soc ie t y
A CC 5 21 6 Ac c ount ing The or y
Assignment 1
DueDate:
Friday, 16 December 2014
You might also find the following book useful:
Summers, J. & Smith, B. (2010), Communication Skills Handbook, John Wiley & Sons, Third Edition,
Milton Queensland
A CC 3 11 6 Ac c ount ing and Soc ie t y
A CC 5 21 6 Ac c ount ing The or y
Assignment 1
Due Date:
Friday, 16 December 2014
You might also find the following book useful:
Summers, J. & Smith, B. (2010), Communication Skills Handbook, John Wiley & Sons, Third Edition,
Milton Queensland
Section A (20 marks)
The questions in this section require you to do some research.
explanations are discouraged.
Bullet-point answers without
Requirements:
(a) What is a conceptual framework in accounting? How can the conceptual framework help users and
preparers understand accounting requirements and financial statements?
(4 marks)
(b) Why is accounting said to be political in nature? How can a conceptual framework help in the setting
of accounting standards?
(4 marks)
(c) It is claimed by some that the reason for conceptual frameworks in accounting is to protect the
accounting profession rather than improve accounting practice. Explain the basis of this claim.
(4 marks)
(d) In 500 words or less, describe and summarise the current situation as of November 2014 in the
development of a conceptual framework in accounting in Australia and internationally.
(8 marks)
The overall word limit for Section A is 1,200 words. Words in excess of this limit will not be marked.
Section B (10 marks)
The questions in this section require you to do some research. Bullet-point answers without
explanations are discouraged.
Requirements:
Assume you are a lending officer in a major Australian bank. The bank is concerned about lending in the
current weak economic climate. Your supervisor asks you to prepare a report indicating how you can
safeguard the bank against the risks of lending.
In your report, you should cover the following contents:
(a)
What are debt covenants and why are they used in lending agreements?
(2 marks)
(b)
How can covenants in debt agreements be used to reduce lending risks? What agency problem(s)
is/are the bank concerned with?
(4 marks)
(c)
How can accounting information be used to reduce lending risks? Provide two different examples
to support your answer.
(4 marks)
The overall word limit for Section B is 600 words. Words in excess of this limit will not be marked.