Instructions:

Assignment should be of 1,000 words each (2000 words in total). Please use "word count" and include in report. Due date: 18-05-2016

Assignment Question 1 (1000 Words)

Read the following quotation from Miller and Reading (1986, p. 64). If constituency support is necessary before particular accounting approaches become embodied in accounting standards, does this have implications for the 'neutrality' and 'representational faithfulness' (qualitative characteristics that  exist  in  various conceptual framework projects around the  world) of reports generated in accordance with accounting standards?

"The mere discovery of a problem is not sufficient to assure that the Financial Accounting Standards Board will undertake its solution ... There must be a suitably high likelihood that the Board can resolve the issues in a manner that will  be  acceptable  to  the  constituency-without some  prior  sense  of  the likelihood that the Board members will be able to reach a consensus, it is generally not advisable to undertake a formal project".

Assignment Question 2 (1000 words)

As Watts and Zimmerman (1986, p. 7) state, Positive Accounting Theory 'is concerned with explaining [accounting] practice. It is designed to explain and predict which firms will and which firms will not use a particular accounting method ... but it says nothing as to which method a firm should use'. Do you think that this represents an 'abrogation' of the academics' duty to serve the community that supports them?

General Instructions for both assignment questions

You should then respond to the statement by arguing a position. Do you agree or disagree, explaining why. You should give consideration to events in recent years that may have had an influence.