Advanced Accounting: Examining Issues, Theories, and Case Analysis

This essay delves into advanced accounting issues arising from a case study, focusing on the challenges faced by CA ANZ. It addresses business risk, lack of transparency, and the implications of strategic decisions. The analysis explores the applicability of accounting theories such as the going concern assumption, revenue recognition, and consistency in financial reporting. The essay evaluates the company's decisions regarding risky projects, cost-cutting measures, and their impact on the company's financial viability. By comparing CPA disclosures and CA ANZ practices, the paper highlights the importance of transparency and consistent application of accounting standards. This student-contributed document is available on Desklib, where students can find a wide array of solved assignments and past papers to aid in their studies.

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ADVANCED ACCOUNTING
By (Student’s Name)
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ADVANCED ACCOUNTING
This paper solves the issues that arise from the article. The issues that are being solved
are those of the advanced accounting. The first part addresses the accounting issues that are
discussed in the article. The second part discusses the various accounting theories that are
explained in the article.
1) Accounting issues that have being addressed in the article include:
Business risk-this is when the director s of the company make a decision that may affect
the company negatively or where the event that occurred threatened the future of the business. a
plan of recruiting 5000 CPA was never successful. This may make the business to operate at a
loss.2) there is also lack of transparency at the company. The CA ANZ does not show detail
about spending and revenue in the company annual report (Scott 2015).
The CA ANZ accountant spend higher amount of money on the project contributing to
losses and this made the company to initiate program of cost cutting .
The CA ANZ’s tertiary level educations are all at risk due to the losses that the company
experiences in the course of business operation.
2) In terms of the issues of accounting being discussed, what I disagree/agree with in the
article are the following.
In the article, it is true that there is lack of transparency in the company this is because
the CA ANZ fails to reveal the detail of the total expenses and revenue (Schaltegger and Burritt
2017). The annual report of the CPA published during the month which acts as the benchmark
also enlightened some forms of transparency issues in the company.

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I agree with the decisions of the executives of engaging in a project that is risky. These
projects can make the company to spend higher amount of money but they always have long
term benefits to the company. The CA ANZ will yield higher amount of profit from the business
that are risky in the long run. Though, sometimes they might make the company to run at a loss
in the short run which is obvious because in any business operation there must be a profit or loss.
In case of the loss, the company should come up with suitable strategies in order to improve the
operation of the business to ensure that the company event that causes the business to make
losses are solved (Libby 2017).
The decision of the company of reducing the number of the staff, outsourcing of the
employees and slashing of the budget are the best idea as they will reduce the CA ANZ
expenditure. This may make the company to make profit because the expenses will be lower than
the revenue.
3) How the article is linked to theories/theory is well explained in the Unit of Advanced
Accounting.
Accounting theories- These are sets of methodologies and assumptions used in the
application and study of FRP (Financial reporting principles).
Going concern- this theory is evident in the articles. It states that when accounting of the
business is being managed, the controller must understand the financial viability of the business.
The assumption in this theory is that the business is strong enough to survive even in the future.
In case the accountant realized that the business will fail in the future then he will state it in the
financial statement of the business (Bublitz, Philipich and Blatz 2015). The annual spending of

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the CA ANZ is being stated in the annual report of the company. The report of the accountant
should outline whether the company will operate in the future.
Revenue recognition- this is the accounting principle that are in the GAAP that help in
finding a particular conditions in which revenue should be accounted for or recognized. The
company recognized the revenue after the performance of a specific event or project. From the
comparison of the CPA disclosure and CA ANZ, it is clear that the company recognized both the
revenue and expenses. The CA ANZ financial statement recognized both the expenses and
revenues when they are realizable or realized by the company (Leong 2015).
Consistency- this theory state that once the company selects an accounting method, it
should be applied continuously over the entire accounting periods. There is a consistency in the
financial statements of the CA ANZ. The company uses the same accounting standard where the
revenue and expenses are being recognized for each of the financial year (Gaffikin and Aitken
2014).

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References
Bublitz, B., Philipich, K. and Blatz, R., 2015. An example of the use of research methods and
findings as an experiential learning exercise in an accounting theory course. Journal of
Instructional Pedagogies, 16.
Gaffikin, M. and Aitken, M. eds., 2014. The Development of Accounting Theory (RLE
Accounting): Significant Contributors to Accounting Thought in the 20th Century. Routledge.
Leong, R., 2015. Structuring an undergraduate accounting theory course to enhance the learning
experience of Australian students: Preliminary findings.
Libby, R., 2017. Accounting and human information processing. In The Routledge Companion to
Behavioural Accounting Research (pp. 42-54). Routledge.
Schaltegger, S. and Burritt, R., 2017. Contemporary environmental accounting: issues, concepts
and practice. Routledge.
Scott, W.R., 2015. Financial accounting theory (Vol. 2, No. 0, p. 0). Prentice Hall.

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