Accounting Theory - Research Paper Example

ACCOUNTING THEORY – CRITERIA SHEET, RESEARCH ASSIGNMENT Student Names & Numbers: ………………………………………………………………………………………………………………………… Criteria Unsatisfactory - Low Pass 1 2.0 Low Pass – Very fair 2.25 3.0 Very Fair - Good 3.25 4.0 Very Good - Excellent 4.25 5.0 M arks Article 1 Discussion of an accounting issue, financial reporting or regulatory environment from a newspaper article since 1 March 2009. Analytical Thinking: The ability to present the issue in a logical manner and the analysis of the specific issue including application to a theory. (5 marks) The students have shown limited ability to present the issue in a logical manner and to analyze the specific issue including application to a theory. No references used to support arguments. The students have shown some ability to present the issue in a logical manner and to analyze the specific issue including application to a theory. Some references used to support arguments but the majority are unsubstantiated. The students have shown a good ability to present the issue in a logical manner and to analyze the specific issue including application to a theory. References used to support arguments in the majority of cases. The students have shown a very high level of ability to present the issue in a logical manner and to analyze the specific issue including application to a theory. References are clearly articulated and expertly used to support arguments throughout. /5 Article 2 Discussion of an accounting issue, financial reporting or regulatory environment from a newspaper article since 1 March 2009. Analytical Thinking: The ability to present the issue in a logical manner and the analysis of the specific issue including application to a theory. (5 marks) The students have shown limited ability to present the issue in a logical manner and to analyze the specific issue including application to a theory. No references used to support arguments. The students have shown some ability to present the issue in a logical manner and to analyze the specific issue including application to a theory. Some references used to support arguments but the majority are unsubstantiated. The students have shown a good ability to present the issue in a logical manner and to analyze the specific issue including application to a theory. References used to support arguments in the majority of cases. The students have shown a very high level of ability to present the issue in a logical manner and to analyze the specific issue including application to a theory. References are clearly articulated and expertly used to support arguments throughout. /5 Article 3 Discussion of an accounting issue, financial reporting or regulatory environment from a newspaper article since 1 March 2009. Analytical Thinking: The ability to present the issue in a logical manner and the analysis of the specific issue including application to a theory. (5 marks) The students have shown limited ability to present the issue in a logical manner and to analyze the specific issue including application to a theory. No references used to support arguments. The students have shown some ability to present the issue in a logical manner and to analyze the specific issue including application to a theory. Some references used to support arguments but the majority are unsubstantiated. The students have shown a good ability to present the issue in a logical manner and to analyze the specific issue including application to a theory. References used to support arguments in the majority of cases. The students have shown a very high level of ability to present the issue in a logical manner and to analyze the specific issue including application to a theory. References are clearly articulated and expertly used to support arguments throughout. /5 Written Communication, this includes: Clarity of Expression, Logical Exposition, Succinctness, Spelling and Grammar, Referencing. (5 marks) (This mark is for an overall assessment of the written communication skills displayed for these three issues.) The students’ work reflects poor English expression. Writing is unclear, not succinct, and frequently has spelling and grammatical errors. The students present their analysis in an unclear and disorganized manner. APA or HARVARD reference style is not used. The students’ work reflects fair English expression. Writing is unclear, not succinct, and has some spelling and grammatical errors. The students present their analysis in an unclear and disorganized manner. APA or HARVARD reference style is not consistently used. The students’ work reflects good English expression. Writing is clear and succinct with few spelling and grammatical errors. The students present their analysis in a clear and logical manner. APA or HARVARD reference style is used consistently with minor flaws. The students’ work reflects excellent English expression. Writing is very clear and succinct, with very few, if any, spelling and grammatical errors. The students present their analysis in a very clear and logical manner. APA or HARVARD reference style is expertly used. /5 COMMENTS and TOTAL MARKS /20 Accounting Theory Research Assignment Insert Name Tutor Course Date Table of contents Criteria sheet………………………………………………………………………….1 Cover page.....................................................................................................................2 Table of Contents..........................................................................................................3 Article Publication Information.....................................................................................4 Summary of Article I......................................................................................................5 Accounting Theory Issue…...………………………………………………………….5 Application to Accounting Theory…………………………………………………….6 Summary of Article II......................................................................................................7 Accounting Theory Issue……………………………………………………………….8 Application to Accounting Theory……………………………………………………..9 Summary of Article III....................................................................................................10 Accounting Theory Issue.................................................................................................10 Application to Accounting Theory……………………………………………………..12 Bibliography....................................................................................................................13 Article I GM motors toward bankruptcy brink May 13, 2009 12:00am BusinessDay Article Article from: The Courier Mail Article II Income tricks of the rich targeted May 13, 2009 Today in Business Article from:  The Australian Article III Minimal funds to fix Sydney congestion May 13, 2009 BusinessDay Article Article from: The Sydney Morning Herald Summary of Article I The article entails concern of General Motor’s stagger on the verge of insolvency and due to this, it is appraising its foreign tactics. With hardly two weeks left awaiting General Motors' reformation time limit together with the sell of all the shares in the company belonged to top directors. The corporation was liable to sell pieces of its European business. The boss goes on by talking that their preference would be to shun that although in a figure of cases it might be essential. That at this moment, the scrutiny is being done nation by nation. The aspiration was to ascertain whether tactics overseas would also require court shield if at all General Motors would be forced into insolvency. The America's largest automobile corporation, which possesses Australia's Holden, has appointed a New York director hunt company to assist in replacing no less than half its executive panel (Crawford, GM motors toward bankruptcy brink 4). Accounting theory issue General Motors is staggering on the verge of insolvency and due to this; it is appraising its foreign tactics. This is according to the car giant's boss. With hardly two weeks left awaiting General Motors' reformation time limit together with the sell of all the shares in the company belonged to top directors, chief director Fritz Henderson said the corporation was liable to sell pieces of its European business. It will also dossier for an official court-ordered insolvency in the US. According to Henderson, because the objectives were set by themselves, it's more possible that they will have to achieve their aims in insolvency. However, US insolvency would not essentially imply that the corporation's abroad operations would collapse too. He says that it is not a predetermined inference that US dossier would go after dossiers used in other nations. The boss goes on by talking that their preference would be to shun that although in a figure of cases it might be essential. That at this moment, the scrutiny is being done nation by nation. The aspiration was to ascertain whether tactics overseas would also require court shield if at all General Motors would be forced into insolvency. Vice-chairman Lutz traded 81,360 GM dividends at $US1.61 every dividend. The North American president Clarke traded 21,380 dividends at $US1.45 per dividend. The rest who also involved in trading the stock were vice-chairman Stevens, cluster vice-presidents Cowger and Szygenda. The dealings were done with regard to regulatory dossiers. The America's largest automobile corporation, which possesses Australia's Holden, has appointed a New York director hunt company to assist in replacing no less than half its executive panel. This is performed to meet the June 1 restructuring deadline. Italy's Fiat, which of late took a main venture in Chrysler, has articulated attention in General Motor's German-based Opel make (Crawford, GM motors toward bankruptcy brink 17). Application to accounting theory In the customary view of the firm, the investor view, the shareholders or stockholders are the proprietors of the company, and the firm has an obligatory fiduciary duty to put their requirements first, to augment value for them. In previous input-output replicas of the company, the company changes the contributions of shareholders, staff, and providers into salable productivity which clients purchase, thus income capital becomes useful to the corporation. From the model, corporations only handle the requirements and desires of savers, workers, suppliers, and clients. However, stakeholder theory disputes that there are other parties concerned, including governmental bodies, opinionated groups, trade unions, communities, associated companies, prospective staff, prospective clients, and the public (Laplume 56). The accounting subject talked about is the issue of insolvency in GM Company and the suggested way of solving it. This is with view of ensuring the corporation doesn’t disintegrate entirely. The company could be collapsing due to poor management among the top brass. All the stakeholders might not be incorporated in the roundtable meetings for the company. Therefore instead of GM Company’s move of appointing a New York director hunt company to assist in replacing no less than half its executive panel, it should incorporate both the resource-based outlook, the market-based outlook, and then add a socio-political echelon. These outlooks of the company can be utilized to describe the particular stakeholders of a company and also scrutinize the circumstances under which the GM Company works and also how these parties should be cared for as stakeholders. According to Donaldson and Preston it is good to recognize the ethical or philosophical guiding principle for the function and administration of the company. Therefore with the shortest period left for the Company to do its reformations, it is better it scrutinized the working conditions of its top management and in general the GM Company (Jensem 24). From the details of the situation in GM Company, it seems there is something wrong with the management. There is no way the company can be on that virtue of collapse without the top management realizing it initially. All the stakeholders in the GM Company should hold a crisis meeting to find out what was the real cause. Therefore the company should do a study and progression to find out what is the real cause of such insolvency. The company should engage the concerned parties in a dialogue as one or so might have an idea of the cause and the remedies (Philips 37). Summary of Article II The article is on hobby ranches, personal corporations, family trusts, offshore services and cut-rate dividend buying target by the government. This is in an operation the Government says will progress parity and integrity in the levy system. The Treasurer has by now called for clearout on extreme remunerations and instigated an investigation into executive salary. From July 1 the following year, people with returns of above $250,000 will not be able to counterbalance losses from unbeneficial commerce activities against remuneration and wage returns. The utilization of personal corporation structures to hold possessions such as property that is actually utilized for individual gain will also be difficult. This is because the Government has stiffened the regulations on alleged non-business lends (Speedy, Income tricks of the rich targeted 7). Accounting theory issue Hobby ranches, personal corporations, family trusts, offshore services and cut-rate dividend buying have all been aimed at. This is in an operation the Government says will progress parity and integrity in the levy system. The Treasurer has by now called for clearout on extreme remunerations and instigated an investigation into executive salary. The financial plan disclosed novel rules to seal get-outs that assist some directors increase their pay and reduce levy (Hybels 17). The policies on worker dividends schemes which have been preferred means by which directors improve their payment as they reduce tax, have been tightened. So, levy special considerations are now accessible only to personnel being paid below $60,000. The gauge is anticipated to make $200 million in the subsequent four fiscal years. The levy payer financed hobby ranch is also set for the cut. From July 1 the following year, people with returns of above $250,000 will not be able to counterbalance losses from unbeneficial commerce activities against remuneration and wage returns. The trial is anticipated to make $330million in its initial year (Lindblom 31). Directors considering a stint in the London workplace will also be affected. They will be impacted on by returns levy exemptions for foreign services to be limited to aid and charity personnel. This will be on those on certain categories of government services or on projects in the nationwide concern. At present, certain overseas service returns earned by Australians in service abroad for 91 days or further are free from taxation. This was to eliminate the threat of taxing similar returns twofold. However, the Government realized that Australians being paid returns abroad, paid little levy to overseas governments. It has been resolved that from July 1, those being paid returns offshore will be taxed any returns levy paid abroad. They will still be accountable for Australian returns levy also (Hearit 15). The gauge is anticipated to generate income of $675 million in the subsequent four years. For those staying in Australia but send their cash on holiday will be aimed at by a further $122 million in expenditure for above four years. This is intended to control the misuse of levy havens. Employing family trusts to reduce levy by dispensing returns in family members will be difficult. The gauge is anticipated to make up to $50 million per year. This would discontinue rorts like pretending to disburse an unemployed brother $70,000 annually to trim the turf. The utilization of personal corporation structures to hold possessions such as property that is actually utilized for individual gain will also be difficult. This is because the Government has stiffened the regulations on alleged non-business lends (Speedy, Income tricks of the rich targeted 23). Application to accounting theory The issue is that, the government’s levy operation system being applied to people is affecting some people more than others. It is clear that from July 1 the following year, people with returns of above $250,000 will not be able to counterbalance losses from unbeneficial commerce activities against remuneration and wage returns. The matter is about legality of the policies that are to be used by the government in such process. In this system, some personnel are going to be taxed more than others. The personnel that are going to be affected most are the foreign employees. Apart from the levy they will be taxed in foreign nations, the Australian government will also tax the. Even though they are taxed less, the government should be considerate as economies of countries vary. Inflation rate of one nation is not the same as inflation rate in another nation (Matthew 56). With regard to Legitimacy theory, all corporations together with the government have a societal agreement with society to perform in agreement with the norms and principles of society. The anticipations of the community change with time. Although taxation is a legal action, the legitimacy of the provisional policies on taxation should be in line with the norms and values of the nation’s welfare. The government is not applying legitimacy in the amendment of its policies with claim of closing get-outs for levy evaders. Although there might be few individuals who are inflating their pay as they reduce tax payment, the government should look for a legal means of how to tackle the problem. Not everybody should be subjected to such policies that affect some most than others. Because persons are much concerned with the welfare of the entire nation, the government should look for appropriate means of netting those who evade tax payment but ensuring that legitimacy plays it is role (Ashford & Gibbs 27). Summary of Article III The article covers the hardly above 1 percent of the $8.5 billion the Central Government will use on highway and railway projects will be utilized by the Government's pledged $13 billion metro set-up. These will include the Metro CBD. The $91 million for setting up will go utilized in the projects. In comparison to this, the 40-kilometre zonal railway convey line in Melbourne between the CBD and the external western environs will get $3.2 billion, which is about three-quarters, of the entire expenditure. However, in Sydney even the cargo line in North, a replica of the City Railway line between Strathfield and Hornsby has not obtained funds (Besser, Minimal funds to fix Sydney congestion 9). Accounting theory issue Hardly above 1 percent of the $8.5 billion the Central Government will use on highway and railway projects will be utilized by the Government's pledged $13 billion metro set-up which will include the Metro CBD. The $91 million for setting up will go utilized in the projects. In comparison to this, the 40-kilometre area railway convey line in Melbourne between the CBD and the external western environs will get $3.2 billion, which is about three-quarters, of the entire expenditure. The budget has allocated $365 million to Gold Coast railway and $236 million to develop the Perth railway. This will be done by dipping it under the CBD. Another $585 million will be used to lengthen and renovate Adelaide's railway set-up (Kaplan 45). However, in Sydney even the cargo line in North, a replica of the City Railway line between Strathfield and Hornsby has not obtained funds. This was made to alleviate jamming of Sydney's overwrought railway system. In its place, a zonal highway via the Hunter Valley will be the state's country-building venture. Over $1.45 billion for six years will considerably finance a $1.7 billion highway link between F3 and Branxton. This is a road rebranded the Hunter superhighway. The deprived outcome for civic transportation in Sydney emerges 14 months after the previous NSW Prime Minister Morris said Sydney would avert from strategy considerably to improve the City Rail set-up. But, it would as an alternative embark on computerized metro system. His key proposition for underground construction between St James and Rouse Hill at $12.5 billion was discarded by the Prime Minister Nathan. He substituted it with a seven kilometre link between Rozelle and Central Station. Its viability was trialed by when the statement was issued (Besser, Minimal funds to fix Sydney congestion 14). In comparison to this, the Victorian Government showed cautious designed lasting policy to handle jamming in Melbourne. The three large highway schemes suggested by NSW were put on hold. These were the replica of the M5 East, a $4.75 billion toll way under Pennant highway and a $9.7 billion road linking M4 and Port Botany - The Central Government will finance the building of a link for Kempsey at a cost of $618 million. However, government plans to finance one of the 12 port-related ventures on its precedence catalog. Sometimes ago like two years, the restricted capability of the nation's ports was a huge financial constriction. Currently, Communications Australia is not convinced that civic savings in port or airport capability is defensible. This is so because if offered the correct governance and market structure, the private quarter is prepared and eager to invest (Besser 18). Application to accounting theory The issue is the government’s unbalanced distribution or development of the infrastructure in the country. The government wants to use not over 1 percent of the $8.5 billion on road and railway ventures which will include the Metro CBD. The $91 million for setting up will go utilized in the projects. In comparison to this, the railway in Melbourne between the CBD and the external western environs will get $3.2 billion, which is about three-quarters, of the entire expenditure. However, in Sydney even the cargo line in North, a replica of the City Railway line between Strathfield and Hornsby has not obtained funds. According to Marxian’s normative view on distributive fairness in the True income theory, capitalist allocation of returns is too imbalanced and unfair and must therefore be substituted by a novel socialist or communist type of allocation. He states that under socialism, which he described as an inferior phase of communist society, citizens should be rewarded with regard to their work or involvement in society or nation building. The second phase is where the public should be rewarded in accordance with their requirements. The government should provide a solution that benefits the entire society. It is better for the government utilize the resources evenly in the whole country. People should be entitled to all public privileges. In any case they are the taxpayers (Kyn 37). The Marxian principle of equivalent quantity of product for equivalent quantity of work must essentially generate substantial returns degree of differences. This is particularly if it is construed in the view of the work hypothesis of worth. The Australian government should therefore allocate resources evenly in the nation. Marx was extremely critical of the unfairness and disparity of the capitalist income allocation. His outlook of socialist and communist income allocation did not mean a democratic leveling off all returns. Therefore all types of returns disparity based on man-made stratification of the public into classes, ethnic groups and disparities emerging from the usurpation and use of political and social authority should be eliminated. The government should therefore the right income parity that will not restrict personal liberty, complete growth of individual capability and the general development of the nation’s potential (Thoma 52). Works Cited Carly Crawford. “GM motors faces insolvency verge.” BusinessDay Article. 347(2009) 2-22. 13 May 2009 12:00am. Blair Speedy. “Revenue tricks of the wealthy under fire.” Today in Business. 326(2009) 5-27. 13 May 2009. Linton Besser. “Minimal finances to tackle Sydney jamming.” BusinessDay Article. 234(2009) 7-19. 13 May 2009. Michael C. Jensem. Value Maximization, Stakeholder Theory, and the Corporate Objective Function. Harvard Business School: Social Science Electronic Publishing Inc, 2000. Robert Philips. Stakeholder Theory and Organizational Ethics. Berrett-Koehler Store Publishers. 2003, P 1-200. Andre O. Laplume. Stakeholder Theory: Appraising a Theory that Progress Us. University of Manitoba, 2007. Matthew, V. Minor Changes to Legality Theory in Social and Accounting Setting. South Australia: Flinder University, 1992. Ashford, B. E. & B. W. Gibbs. “The Double-Edge of Directorial Legitimation.” Organization Science, 1990. Vol. 1, No. 2, pp. 177 - 194. Hybels, R. C. “On Legality, Legitimation and Organizations: A Critical Appraisal and Incorporative Theoretical Replica.” Academy of Administration Periodical, 1995. pp. 241 - 245. Kaplan, S. “Optimistic Theory, Reasonableness and Accounting Rule.” Critical Viewpoint on Accounting Periodical, 1991. Vol. 2, No. 4, pp. 361 - 374. Oldrich Kyn The Normative View of Marxian Theory on Income Distribution under Socialism. Stanford Press, 2001. Mark Thoma. The Asset Bubble Theory of Income Inequality. New York: Oxford University Press, 2009. Read More