The aim of this assessment task is to: critically reflect on factors that influence the quality of external reporting
The following Institute of Economic Affairs (IEA) study questions whether accounting regulation, and specifically the increasing amount of accounting regulation, has been effective in protecting the interests of users:
If we accept that the regulation of external reporting (i.e. in the form of accounting standards) is a political process
To what extent does regulation (in the form of accounting standards) and the “attributes of a profession” assist in the generation of external reports that might considered neutral and representationally faithful as the Conceptual Framework would suggest? Please explain the basis of your opinion.
1. This assessment item requires you to form and explain an opinion (i.e. in your view). Marks are not awarded for a correct/incorrect answer. Marks are based on your ability to form and explain an opinion that is logical in its construct.
2. Although it is your opinion, your opinion should be informed from material covered in class and other pertinent reference material (appropriately referenced).
3. At a minimum, it is to-be-expected that your opinion will include reference to the following:
a. Define neutral and representationally faithful
b. Objectives of external reporting
c. The ‘political process’
d. Arguments for and against regulation
e. Relevant ‘attributes of a profession’
f. Implications for the quality of external reporting
4. You are not required to discuss other forms of regulation on financial reporting (such as ASX or Corporations legislation)
5. There is no specified audience for this report and a 'loose' reporting format can be adopted. Nevertheless, marks will be awarded in accordance with your ability to demonstrate sound professional written communication skills.
Note: This assessment is not about Enron or WorldCom (referred to in the