Accounting Theory and Current Issues

Accounting Theory and Current Issues

Contents
INTRODUCTION...........................................................................................................................................3
TASK 1..........................................................................................................................................................3
TASK 2..........................................................................................................................................................4
TASK 3..........................................................................................................................................................6
A) Key Facts about chosen financial Fraud.............................................................................................6
B) Positive Accounting Theory’s (PAT’s) hypotheses predicted the practice(s) of the parties involved
in your chosen accounting fraud..............................................................................................................6
C). Specific accounting regulations which were violated........................................................................7
D) What lessons have been learnt from your chosen accounting fraud?..................................................9
E) Recommendation..............................................................................................................................12
CONCLUSION.............................................................................................................................................13
REFERENCES..............................................................................................................................................14

INTRODUCTION
Accounting theory is a system of assumptions, frameworks and methodologies used to
research and apply these ideals of financial reports. Accounting research includes the analysis of
both existing banking reaction will proceed and the updated and application of accounting
practices to the accounting and financial and financial statement regulatory systems. All concepts
of accounting are limited by the design configuration of accounting (Schroeder, Clark and
Cathey, 2019). The Financial Accounting Standards Board provides this structure. An
independent organization that is responsible for defining and defining the main objectives of
financial reporting for corporations, both government and private. Moreover, accounting theory
can be regarded as a logical argument for assessing and directing accounting practices. The
theory of accounting also contributes to modern accounting practices and technologies when
reporting standards change. This role offers a short glimpse into different hypotheses of
accounting, and addresses the new legislative system. The monitoring climate analyzes financial
statements as well. A practical world scenario with financial statement manipulation is used to
help explain accounting hypotheses.
TASK 1
Australia has a variable disclosure regime under which the requirements of the financial
reports are determined by type of item, mainly depending on the priorities of the entity's benefit
in the client. Types of entities may be classified as:
 Required for disclosure, by means of the publication of brochures, of the businesses
mainly stated in the list of financial products or authorized shares and of the approved
scheme for managed investment / suggested interest agreements;
 NO-listed major companies and shares limited (in other words, a private company that
meets at least 2 situations below: 10 million US Dollars or more of its gross margins, 5
million US Dollars or more of its gross assets and 50 or more of its staff);
 Small company owned.

According to Corporate Law, any divulging individual, organization and registered investment
scheme will retain documents that correctly document its financial activities, enabling financial
statements to be drawn up and audited.
With the exception of limited patented firms, all institutions must submit annual financial
statements. The financial reports contain a balance sheet, earnings and loss proclamation and a
cash flow statement. The issues to be revealed in the financial reports are included under the
accounting standards established and implemented by business law by the Australian Accounting
Standards Board ( AASB). Company law also allows financial statements to be prepared where
those declarations are required in accordance with a financial statement (Hassan and Marston,
2019). This often tends to happen if one or such one or so other organizations. The yearly
financial reports must be transfer to the members and submitted to the Australian Securities and
Investment Commission (ASIC) for permission at the understanding exactly or company general
meeting.
In addition to fulfilling the annual filing requirements, provision of information should submit
six months of financial reports. As well as, the consolidated accounting statements are shortened.
Half-year financial reports shall not be allocated to representatives but should be issued with
ASIC. Both annual and semiannual reports shall be:
Accompanied by the directors' briefing on the business of the organization;
Followed by a statement from the directors that reporting meets the requirements of the
accounting standards and gives a precise and fair view of the financial situation and the solvent
nature of the company;
Audited in the event of half year financial reports that are evaluated or assessed by an indentified
corporate auditor.
TASK 2
The Australian corporate accounting environment, as the entity must document to different
government bodies, is heavily regulated. As Australia, it intends to enhance investors in
economic, corporate and capital markets with self belief and honesty (Leone, Minutti-Meza and
Wasley, 2019). This is supported through open and precise financial reporting published in