Assignment- Accounting for Decision Makers of Management & Finance
You have a choice. You must attempt EITHER Question 1 OR Question 2.
Your essay must be 2,000 words in total EXCLUDING any abstract, bibliography, or appendices.
Question 1
The objective of general purpose financial reporting is to provide financial information about the reporting entity that is useful to users of financial statements (existing and potential investors, lenders and other creditors) in making decisions about providing resources to the entity. (IFRS Foundation, 2013, p. 20)
Earnings management has two main forms, one of which is concerned with accounting choice, while the other involves adjustment of real cash flows. Using appropriate examples, critically analyse and discuss these two approaches to earnings management. You should do so (a) in the context of the potential impact of earnings management upon the quality of the financial decision making of the two primary groups of stakeholders as defined above; and, (b) from the perspective of managers who engage in earnings management. Use appropriate theories to support your discussion.
Guidance
This coursework assessment requires that you conduct research into the use of earnings management. You should use what has been taught on this module as the foundation for your essay, building upon it with what you discover in your research of the literature. Your essay should focus on the challenges facing these two user groups as a result of earnings management and on the reasons why managers engage in earnings management. The IASB Conceptual Framework should be of major relevance to the former. For the latter, you need to identify reasons for use of earnings management.
Question 2
Critically discuss whether the focus of management accounting should be on planning or control?
Guidance
It is important that you justify your choice. You should give reasons for your choice AND explain the negative evidence for the choice that you rejected.
In answering this question, you should consider 2 examples from areas covered in the module.
Throughout your work you are expected to support your discussion with reference to sources beyond the module, including at least 6 peer-reviewed journal articles from the management accounting literature.