Research Proposal: Contemporary Issues in Accounting, Semester 2

This report presents a research proposal focusing on contemporary issues in accounting. It begins with an introduction outlining the significance of the topic and its relevance to accounting practices. The practical motivation highlights the importance of these issues for accountants, managers, and regulators, while the theoretical motivation emphasizes the contribution of the research to understanding evolving accounting practices. A comprehensive literature review explores the historical development of conceptual frameworks, application concerns, and academic perspectives on the quality of financial reporting. The proposal then details the research hypotheses based on positive accounting theory, including the bonus plan, debt covenant, and political cost hypotheses. Finally, the methodology section discusses the theoretical underpinnings of the research, the differences between normative and positive accounting theories, and the chosen research approach. The report concludes by summarizing the key findings and implications of the research proposal, emphasizing the importance of the study in addressing contemporary challenges in accounting.

Running head: CONTEMPORARY ISSUES IN ACCOUNTING
Contemporary Issues in Accounting
Name of the Student
Name of the University
Author note

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CONTEMPORARY ISSUES IN ACCOUNTING
Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Conclusion..................................................................................................................................8
Reference....................................................................................................................................9
Appendix..................................................................................................................................10

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CONTEMPORARY ISSUES IN ACCOUNTING
Executive summary
The aim of the report is to prepare a research proposal on the contemporary issues in
accounting. The research proposal gives a brief detail of the literature review of five articles
on the contemporary issues in accounting. In addition to that the report contain a detail of the
hypothesis of the research proposal and concludes with a research methodology on the
contemporary issue in accounting.

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CONTEMPORARY ISSUES IN ACCOUNTING
Introduction
Since the formation of the financial accounting standard board which developed the
first theoretical framework in accounting. Abstract structure as a comprehensible system of
the consistent purposes and details that is predictable to lead to constant standards. The
theoretical context offers a countless contract of preparation that is, it prescribes convinced
activities such as when to identify an asset for financial statement determination these are
measured to be normative characteristics.
Positive accounting is the section of the academic accounting investigation that
pursues to clarify and forecast definite accounting practices. Theses differences with
normative accounting, that search for optimal accounting standards.
Discussion
Practical motivation
The contemporary issue is important to practice for the accountants, managers,
regulators and the general public as the contemporary issue will help to identify the areas
from which it will be possible to make improvements in the accounting system.
Theoretical motivation
The research will contribute to understand the changes that are evolved in the
accounting practices and the areas in which major improvements are required to be
implemented in the contemporary issues of accounting.
Literature review
History of the conceptual issues of accounting for financial reporting
The development of the conceptual framework for financial reporting is providing the
guidance to the prepares as well as the users of the standards and the financial reports. The
specified objectives of the conceptual framework for financial reporting is ambitious as well
as it includes the usage or assisting with harmonization of the regulations, procedures and
standards. It helps in providing the basis or making the decisions as well as assisting with the

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CONTEMPORARY ISSUES IN ACCOUNTING
formation of the opinion of the preparation of financial statements that is in compliance with
the international financial reporting standards (Henderson et al 2015).
After the depression of the 1929-1923, the tentative statement of the accounting
principles underlying the corporate financial statements influenced patron and Littleton
monograph. USA is the first country that frame the conceptual framework of accounting in
the business organizations. After the world war II, the need of the accounting standards was
realized. In the year 1973, wheat committee recommendations have started the new era in the
accounting system along with the formation of the financial accounting standards advisory
council as well as financial accounting standards. Further for addressing harmonization
accounting standard needs, the international accounting standard was formed to look after the
issues that rise from the accounting methods. During the year 1978 to 2000 the statements of
the financial accounting concepts were published by FASB. This serves as the conceptual
framework of FASB. During the year 1989 single document of the framework was published
by the IASC. IASB and FASB has announced for their new joint agenda in order to revisit
both the company’s conceptual framework. Further in the year 2010 the first phase of
combined scheme of theoretical context was issued by the IASB and the FASB. This segment
of conceptual framework dispensed with the qualitative characteristics and ideas of the
financial reporting. Later in the year 2013 IASB has printed for the conversation paper in
order to demand for the explanations for realizing the acquaintance draft of reviewed
segments for the first sector of the year 2015 (Tschopp and Huefner 2015).
According to Dickson Adom theoretical and conceptual framework guided the
research path and offered the foundation for the credibility establishment.
According to Rosa caiazza conceptual framework aims for providing the framework
for the sustainability. It is because conceptual framework aims for providing the framework
for the classification of the transfer of the knowledge as well as their effects of their
competitiveness.
Application of conceptual framework for financial reporting
There is no guarantee of the high-quality financial reporting solely by the
development of the accounting standards with strong theoretical bases. There are various
issues and concerns regarding the application of the conceptual framework for the financial

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CONTEMPORARY ISSUES IN ACCOUNTING
reporting. Following are some of the Australian profession’s concern and application issues
that arises while applying IFRS/IASB (Conway 2018).
According to ACCA the restructured conceptual framework of IASB has raised
critical issues. There are some proposals from the IASB, in order to update the conceptual
framework for financial reporting that has led to the detailed discussions.
According to KPMG Luxembourg, the financial statements information is not enough,
too much irreverent and not effectively communicated.
According to the Leavitt Walmsley associates, the purpose of framework document is
for setting out then concepts, which underlie the presentation and preparation of the financial
statements for the external users as described in the conceptual framework for the financial
reporting. Application of which enhances qualitative characteristics.
Academic concerns about the quality of conceptual framework for financial reporting
According to Sirivama Herath the determination of the quality of the financial
reporting depends on the accounts reporting value. All across the world, there is a great
demand for providing the clearer and full definition of the quality of the financial reporting.
The high-quality financial reporting helps in influencing the users for making the investments
decisions and increasing the market efficiency. Moreover the, providing the ideal methods for
the assessment of the financial reporting quality is another international requirement
(Cunningham 2019).
As per Ying zhang, the current corporate governance that is conducted by the IASB
and FASB provides broader literature on the financialization and neoliberalism. Through the
configuration of newly globalized conceptual framework, the architecture of regulatory in
accounting will work for sustaining finance centrality in the economy of GFC, despite of
many deficiencies (Zhang and Andrew, 2015).
According to R Macve the inherent limitations of the value and income measures is
remain unrealistic for expecting official attempts to develop the conceptual framework for the
financial reporting in order too provide coherent basis for resolving accounting issues (Macve
2015).

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CONTEMPORARY ISSUES IN ACCOUNTING
Hypothesis of the research proposal
The three hypotheses of the positive accounting theory are the following
The bonus plan hypothesis
the bonus plan hypothesis includes the following
 All other things being equivalent the manager of the firm with bonus plan are further
likely to select accounting measures that move reported salaries from upcoming
period to the present period.
 Managers may upsurge their present bonus by reporting as high a net revenue as
possible, which can be finished by selecting accounting rules that will attain this.
 If the manager is risk opposed, he or she will favour accounting strategies that smooth
reported pays since a fewer adjustable bonus stream has sophisticated predictable
usefulness than a instable one.
The debt covenant hypothesis
 All other things being equivalent the closer a organization is to breaking of the
accounting founded debt covenant the added probability in the organization’s
management is to chose accounting measures that shift reported incomes from
upcoming eras to the present periods.
 To stop or at smallest delay agreement desecrations, management might accept
accounting policies to increase present earnings.
The political cost hypothesis
 All further things being identical, the better the political cost confronted by a firm the
more probable the manager is to select accounting events that submit reported
earnings from existing to forthcoming periods.
 Political costs can be levied by the high productivity which might fascinate media and
consumer attention.
Methodology of the hypothesis
Theory of a set of consistent notions, descriptions and propositions which control the
association among variables and systematic observations of this relationship helps in

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CONTEMPORARY ISSUES IN ACCOUNTING
elucidation and forecasting spectacles. Define and forecast the board theory. One of the main
aims of the theoretic knowledge, an acquaintance of which is well definite. Systematically
composed and systematized sufficient to be accepted by the suitable outline to upcoming
processes to deliver.
Based on the scientific literature, positive accounting theory and institutional theory
offered description and calculations of accounting choices. Positive accounting theory
providing the set of estimates concerning accounting selections disturbing the wealth of
stakeholders and highlighted on the presence of activity difficulties. Institutional theory on
the other hand is used to clarify accounting selections founded on the institutional burdens
and administrations were unprotected be it normative forced or mimetic. The methodology
used tend to be more case studies based and ideographic.
Differences between the approaches and basic accounting as a science of
classification. While the normative accounting theory approaches accounting atomics, the
approach is recognized as a means of accounting theory.
Disagreement
Positive accounting theory is anxious with illumination and forecasting present
accounting practices. There is emphasis on empathetic and explanation of the methods and
rules that accountants presently use for instance why the conservative historic costs
accounting system is the chief dimension scheme practical in the modern days. Unlike the
normative theory positive theory is intended to see the sights of existing accounting practice
not to recommend or advice which approaches should be used (Calabio et al 2017).
Normative accounting theories dismiss conservative historical cost accounting as
being worthless or no decisions valuable and recommend the usage of many beneficial
structures of accounting frequently founded on price rises changes.
The positive accounting context for considerate the accounting concept of satisfactory
offers. This theory can elucidate why the accounting is utilised, and also delivers a structure
for forecasting the process of accounting methods and how some process of accounting is
exaggerated by entitie’s prosperity (Herath and Albarqi 2017).
A normative theory is produced as consequence of the specific theorist smearing some
standard, standard or impartial in contradiction of which define that repetition should strive

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CONTEMPORARY ISSUES IN ACCOUNTING
to achieve for example under the chamber’s theory of accounting, which he considered
uninterruptedly modern accounting, all assets should be unrushed at net market value,
conferring to chambers such evidence is more convenient for unceremonious decision
making than evidence grounded on historical costs, which may essentially be deceptive.
Chamber’s made a decision about the responsibility of accounting to deliver evidence about
an entity’s measurements to assume to varying conditions and as a consequence of his
decisions he agreed to a specific accounting practice (Coyle 2018).
Conclusion
In conclusion it can be said that the start of the development of accounting theory, the
accounting profession, process of practices and methods that were not scientific and cannot
be appropriate for implementation in the organizations. The first process is selected for the
formation of the normative accounting theory. In the modern days it has been found that
some major issues are detected in the formation of the financial statements and that led to the
occurrence of accounting scandals. The research proposal highlighted the contemporary
issues in accounting that are related with the preparation of the financial statement.

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CONTEMPORARY ISSUES IN ACCOUNTING
Reference
Ali, B.J., Bakar, R. and Omar, W.A.W., 2016. The critical success factors of accounting
information system (AIS) and it’s impact on organisational performance of Jordanian
commercial banks. Int. J. Econ. Commer. Manage, 4, pp.658-677.
Alsharari, N.M., Dixon, R. and Youssef, M.A.E.A., 2015. Management accounting change:
critical review and a new contextual framework. Journal of Accounting & Organizational
Change, 11(4), pp.476-502.
Calabio, Leah, Kenneth L Khan, Karen Susan, and Joel Tan. "Correlation of Teachers'
Confidence and Teaching Techniques to Accounting Interest of Students." Karen and Tan,
Joel, Correlation of Teachers' Confidence and Teaching Techniques to Accounting Interest
of Students (July 20, 2017) (2017).
Conway, E., 2018. Sustainability, the Triple Bottom Line and Corporate Social
Responsibility. In Contemporary Issues in Accounting (pp. 15-35). Palgrave Macmillan,
Cham.
Coyle, H., 2018. Why Do We Need to Measure Performance? A Local Government
Perspective. In Contemporary Issues in Accounting (pp. 145-166). Palgrave Macmillan,
Cham.
Cunningham, M.J., 2019. Salaries And Their Effect On The Number Of Accounting
Graduates.
Henderson, S., Peirson, G., Herbohn, K., and Howieson, B. (2015). Issues in financial
accounting. Pearson Higher Education AU.
Herath, S.K. and Albarqi, N. (2017). Financial reporting quality: A literature
review. International Business Management and Commerce, 2(2).
Macve, R. (2015). A Conceptual Framework for Financial Accounting and Reporting:
Vision, Tool, Or Threat?. Routledge.
Thompson, D., 2018. Contemporary Challenges in Audit. In Contemporary Issues in
Accounting (pp. 125-143). Palgrave Macmillan, Cham.

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CONTEMPORARY ISSUES IN ACCOUNTING
Tschopp, D., and Huefner, R. J. (2015). Comparing the evolution of CSR reporting to that of
financial reporting. Journal of Business Ethics, 127(3), 565-577.
Zhang, Y and Andrew, J. (2015). Financialisation and the conceptual framework. Critical
perspectives on accounting, 25(1), 17-26

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CONTEMPORARY ISSUES IN ACCOUNTING
Appendix
Table – Annotated Bibliography for Selected Articles
Author Date Title Journal Type of
Paper
(Theoreti
cal or
Empirica
l)
If
empiric
al,
researc
h
method
and
sample
If
empirical
,
depende
nt and
independ
ent
variable
100-word
summary
of
contributio
n to the
research
question
David
thopson
02 june
2018
Contempo
rary
challenges
in audit
Contempo
rary
challenges
in audit
theoretic
al
This
article
highlighte
d some of
the major
issues that
are related
with the
audit
process
and the
preventive
measures
that the

12
CONTEMPORARY ISSUES IN ACCOUNTING
auditor
should
take to
deal with
such audit
related
problems.
Nizar
moham
mad
alsharai
Robert
Dixon,
Mayada
abd el
aziz
youssef
2
Novem
ber
2015
Manageme
nt
accounting
change:
critical
review and
a new
contextual
framework
Manageme
nt
accounting
change:
critical
review and
a new
contextual
framework
theoretic
al
The main
objective
of this
article is to
introduce
and
discuss a
new
contextual
framework
to explain
the
procedure
of
manageme
nt
accounting

13
CONTEMPORARY ISSUES IN ACCOUNTING
change in
various
organisatio
ns.
Dr
siriyama
kanthi
hearth,
norah
albarqi
2 march
2017
Financial
reporting
quality
Financial
reporting
quality
theoretic
al The raticle
focusses
on the
facts that
are related
with the
quality of
the
financial
reporting,
accounting
standards
convergen
ce,
accounting
standard
harmonisat
ion and
economic

14
CONTEMPORARY ISSUES IN ACCOUNTING
crisis.
Daniel
Tschopp
and
Ronald j
huefner
March
2015
Comparin
g the
evolution
of CSR
reporting
to that of
financial
reporting
Comparin
g the
evolution
of CSR
reporting
to that of
financial
reporting
theoretic
al
This
article
make a
compariso
n between
the
evolution
of the
financial
reporting
and the
corporate
social
responsibil
ity.
Elaine
conway
02 June
2018
Sustainabil
ity the
triple
bottom
line and
corporate
social
responsibil
Sustainabil
ity the
triple
bottom
line and
corporate
social
responsibil
theoretic
al
This
article
briefly
elaborates
the
importanc
e of the
sustainabil

15
CONTEMPORARY ISSUES IN ACCOUNTING
ity ity ity and
discusses
the
approache
s used at
both the
policy
level and
corporate
level to
address
these
challenges
.