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Prescribed book:

Deegan 2013, Financial Accounting eory, 4th edn, McGraw Hill, Crows Nest.
ISBN: 9780071013147.

Assignment 2 Corporate Reports (40% of course


grade)
Part 1 - 20 Marks
During the sub-prime banking crisis it was claimed by many (especially
banks themselves) that accounting requirements - as reflected in various
accounting standards - that require reporting entities to measure many
of their assets at fair value actually exacerbated the financial crisis (Laux
and Leuz, 2009; Power 2010). This is a phenomena termed procyclicality.
It is argued that when markets for financial assets (such as shares, bonds
and derivatives) are booming, the value of these assets held by banks,
and shown at fair value within their statements of financial position, will
similarly rise significantly above their historical cost thus increasing the
reported net assets and capital and reserves of the bank.

....

Conversely, it was argued by many at the time of the sub-prime banking


crisis that when markets for financial assets are in free-fall (as they were
at times during the crisis) fair value accounting exacerbates a downward
spiral of asset prices and bank lending that is equally unreflective of (and
significantly overstates) decreases in real underlying economic values
(Laux and Leuz, 2009)
Deegan, Financial Accounting Theory 4e, 2014, p.197
Consulting Report 1
Assume you have been employed as a consultant to the Australian
Shareholders Association. You have been employed to prepare a report
to be distributed to the members of the association evaluating the
benefits and risks of mark-to-market accounting and evaluating its
usefulness for reporting asset values in general purpose corporate
financial statements.
Your report should be no more than 1200 words and should be written
in a professional business manner including an executive summary,
introduction, evidence section, conclusion and bibliography.
Part 2 20 Marks
In 1987, the World Commission on Environment and Development set
out an aspirational goal of sustainable development describing it as
development which meets the needs of the present without
compromising the ability of future generations to meet their own needs.
Through their activities and relationships, all organizations make positive
and negative contributions toward the goal of sustainable development.
Organizations therefore have a key role to play in achieving this goal.
Sustainability reporting, as promoted by the GRI Standards, is an
organizations practice of reporting publicly on its economic,
environmental, and/or social impacts, and hence its contributions
positive or negative towards the goal of sustainable development.
Through this process, an organization identifies its significant impacts on
the economy, the environment, and/or society and discloses them in
accordance with a globally- accepted standard.
The GRI Standards create a common language for organizations and
stakeholders, with which the economic, environmental, and social
impacts of organizations can be communicated and understood. The
Standards are designed to enhance the global comparability and quality
of information on these impacts, thereby enabling greater transparency
and accountability of organizations.
Sustainability reporting based on the GRI Standards should provide a
balanced and reasonable representation of an organizations positive
and negative contributions towards the goal of sustainable
development.
https://www.globalreporting.org/standards/?g=e298dddc-e26e-4195-
8da5- 64b5c48be5b6
GRI 101 Accessed 10 07 2017
Consulting Report 2
Assume you have been employed as a consultant to a company board of
directors. The company chairman has asked to be provided with a report
to be table at the next board meeting that evaluates the benefits and
costs of adopting the Global Reporting Initiative Standards.
https://www.globalreporting.org/Pages/default.aspx
The Chairman has learnt you are an expert in accounting theory and has
requested that your report incorporate a theoretical perspective on
sustainability accounting and financial reporting.
Your report should be no more than 1200 words and should be written
in a professional business manner including an executive summary,
introduction, evidence section, conclusion and bibliography.

Marking criteria Assignment 2


Each report will be marked on a 5 point scale against the following
criteria:

1. Accuracy and presentation of content


2. Quality and clarity of writing

3. Critical analysis and evaluation of evidence

4. Depth and quality of research and data collection

5. Completeness and accuracy of referencing

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