ACCT20074 - JB Hi-Fi Case Study: Analyzing Reporting Decisions 2018

This assignment analyzes JB Hi-Fi's decision to release its profit downgrade using Classical Political Economy Theory, Institutional Theory, and the Managerial branch of Stakeholder Theory. It evaluates the company's reporting decisions, adherence to ASX regulations, and the impact on share prices. The analysis also explores how the Brunswik Lens Model can explain investor decisions regarding JB Hi-Fi shares following the downgrade announcement. The assignment includes references to support its arguments and observations from the case study. Desklib provides this assignment as a valuable resource for students seeking solved case studies and past papers.

ACCT20074 Final Assignment
Term 1, 2018
Student ID:………………………………. Student name……………………………………………………..
Marker’s overall comments: The markers may include any
final comments here.
Overall Mark (Total) out of 50:
0

Question 1: Use Classical Political Economy Theory to explain JB Hi-Fi’s decision to release its profit downgrade
in the way it did. Make sure you explain what Institutional Theory is, and support your observations with evidence
from the case study.
Answer: Your answer is written here. Evaluating the decision made by JB Hi-Fi under the lens of Classical Political
Economy Theory directly indicates the viable option conducted by the company. The Classical Political Economy
Theory directly indicates the minimum involvement of government regulation on operations of the company.
After evaluating the case study, it could be understood that JB Fi-Hi has used adequate announcement to declare
their profit downgrade, where all the relevant rule was being maintained and followed by the organisation.
Therefore, the announcement release made by JB Hi Fi was in accordance with the Classical Political Economy
Theory.( Frieden, 2018)
The institutional Theory mainly indicates that organisations should maintain and follow all the relevant regulations
for supporting their social activities. Therefore, companies need to comply with the rules and regulations laid
down by exchange and regularities. The announcement made by JB Hi Fi is under the rules and regulation made
by ASX, where the material misstatement more than 5% needs a separate announcement. Hence, the
announcement made by JB Hi Fi is adequate and under the rules and regulation made by ASX, while it is
supported by the institutional theory. The statement given by Bruce Smith also indicated the viable measure used
by JB Hi Fi in announcing their profit downgrade (Lamb & Weiner, 2018).
References:
Insert your references here, for example:
Frieden, J. A. (2018). Modern political economy and Latin America: theory and policy. Routledge.
Lamb, A. J., & Weiner, J. M. (2018). Extending the Research on 1: 1 Technology Integration in Middle Schools: A Call for

Using Institutional Theory in Educational Technology Research. Middle Grades Review, 4(1), 3.
Marker’s Comments: The marker will provide feedback here. Mark (10):
0
Exceeds Expectations
(High Distinction) 85-100%
Exceeds Expectations
(Distinction) 75 - 84%
Meets Expectations
(Credit) 65 – 74%
Meets Expectations
(Pass) 50 – 64%
Below Expectations
(Fail) below 50%
Demonstrates a balanced and very
high level of detailed knowledge of
core concepts by providing a very
high level of analysis. Utilises
current, appropriate and credible
sources.
Demonstrates a balanced and high
level of knowledge of core
concepts by providing a high level
of analysis. Utilises mostly current,
appropriate and credible sources.
Demonstrates a good level of
knowledge of some of the core
concepts by providing some level
of analysis. Utilises some current,
appropriate and credible sources.
Demonstrates limited knowledge of
core concepts by providing a
limited level of analysis. Utilises
few current, appropriate and
credible sources.
Demonstrates little, if any,
knowledge of the core concepts
with extremely limited, if any,
analysis. Utilises little, if any,
current, appropriate and credible
sources.
Quality of writing at a very high
standard. Paragraphs are
coherently connected to each
other. Correct grammar, spelling
and punctuation.
Quality of writing is of a high
standard. Paragraphs are mostly
well structured. Few grammar,
spelling and punctuation mistakes.
Quality of writing is of a good
standard. Few grammar, spelling
and punctuation mistakes.
Some problems with sentence
structure and presentation
Frequent grammar, punctuation
and spelling mistakes. Use of
inappropriate language.
Quality of writing is at a very poor
standard so barely
understandable. Many spelling
mistakes. Little or no evidence of
proof reading.
The assessment presents a
detailed and focused summary of
the ideas presented; drawing clear
and well thought-out conclusions.
The assessment presents a fairly
detailed and focused summary of
the ideas presented; drawing fairly
clear and well thought-out
conclusions.
The assessment presents a
somewhat detailed and focused
summary of the ideas presented;
providing some evidence of
conclusions.
The assessment provides limited
detail with no clear summary of the
ideas presented; drawing limited
conclusions.
The assessment fails to provide
any clear evidence of the ideas
presented; drawing no clear
conclusions.

Question 2: Use the Managerial branch of Stakeholder Theory to explain JB Hi-Fi’s reporting decisions. Make sure
you support your observations with evidence from the case study.
Answer: Your answer is written here. The Managerial Branch of Stakeholder Theory directly indicates that
organisation needs to provide all the relevant information to a particular stakeholder for heling them grow and
obtain sustainable growth. Hence, from the evaluation it could be identified that JB Hi Fi has provided all the
relevant information in the announcement for their shareholders, which helped in portraying their future
prospects and income during the fiscal year. In accordance with Managerial Branch of Stakeholder Theory, JB Hi Fi
has adequately provided all the relevant information to their shareholder regarding it current financial position.
The positive delivery of information to the adequate stakeholders was the main reason behind the rapid decline in
share value of JB HI Fi after the announcement. This relevantly indicates that JB Hi Fi adequately takes the
measure in delivering all the relevant information regarding its current and future performance to its
shareholders, as per the Managerial Branch of Stakeholder Theory. In this context, Hussain, Rigoni & Orij (2018)
stated that companies with the help of announcements are able to deliver the adequate information regarding
their progress and decision, as per the ASX regulations. Therefore, the decision made by JB Hi fi in disclosing the
relevant information of profit downgrade is adequate, which helps ion delivering adequate information to the
shareholders.
References:
Insert your references here, for example:
Hussain, N., Rigoni, U., & Orij, R. P. (2018). Corporate governance and sustainability performance: Analysis of triple
bottom line performance. Journal of Business Ethics, 149(2), 411-432.

Marker’s Comments: The marker will provide feedback here. Mark (10):
0
Exceeds Expectations
(High Distinction) 85-100%
Exceeds Expectations
(Distinction) 75 - 84%
Meets Expectations
(Credit) 65 – 74%
Meets Expectations
(Pass) 50 – 64%
Below Expectations
(Fail) below 50%
Demonstrates a balanced and very
high level of detailed knowledge of
core concepts by providing a very
high level of analysis. Utilises
current, appropriate and credible
sources.
Demonstrates a balanced and high
level of knowledge of core
concepts by providing a high level
of analysis. Utilises mostly current,
appropriate and credible sources.
Demonstrates a good level of
knowledge of some of the core
concepts by providing some level
of analysis. Utilises some current,
appropriate and credible sources.
Demonstrates limited knowledge of
core concepts by providing a
limited level of analysis. Utilises
few current, appropriate and
credible sources.
Demonstrates little, if any,
knowledge of the core concepts
with extremely limited, if any,
analysis. Utilises little, if any,
current, appropriate and credible
sources.
Quality of writing at a very high
standard. Paragraphs are
coherently connected to each
other. Correct grammar, spelling
and punctuation.
Quality of writing is of a high
standard. Paragraphs are mostly
well structured. Few grammar,
spelling and punctuation mistakes.
Quality of writing is of a good
standard. Few grammar, spelling
and punctuation mistakes.
Some problems with sentence
structure and presentation
Frequent grammar, punctuation
and spelling mistakes. Use of
inappropriate language.
Quality of writing is at a very poor
standard so barely
understandable. Many spelling
mistakes. Little or no evidence of
proof reading.
The assessment presents a
detailed and focused summary of
the ideas presented; drawing clear
and well thought-out conclusions.
The assessment presents a fairly
detailed and focused summary of
the ideas presented; drawing fairly
clear and well thought-out
conclusions.
The assessment presents a
somewhat detailed and focused
summary of the ideas presented;
providing some evidence of
conclusions.
The assessment provides limited
detail with no clear summary of the
ideas presented; drawing limited
conclusions.
The assessment fails to provide
any clear evidence of the ideas
presented; drawing no clear
conclusions.

Question 3: To what extent do current share prices anticipate future earnings announcements? Use the case
study to support your answer.
Answer: Your answer is written here. After evaluating the case study, the share price of JB Hi Fi can be evaluated,
which indicates the future earnings announcements of the company. In addition, the decline in share price of JB Hi
Fi by 10% due in the first day of trading after the announcement directly indicates viability of the future earnings
announcements conducted by the company. The drastic decline in share price after the announcement of profit
downgrades directly indicates the low financial position of the company in achieving low profits during the fiscal
year. The evaluation also indicates that the announcement made by the organisation regarding the decline in
future profits is directly affecting the share price of the organisation, which is why drastic decline in its valuation
was seen during the announcement date. In addition, the continuous decline in share price of the company was
mainly witnessed from 25.7 per share to 22.05 per share (Asx.com.au, 2018). This relevantly supports the future
earnings announcement that was conducted by the company regarding the profit downgrade, as share price of
the company is continuously declining and portraying viability of the announcement conducted by JB Hi Fi. Thus, it
could be understood that the current share prices of the JB Hi Fi adequately anticipates the future earnings
accountment of the company
References:
Insert your references here, for example:
Asx.com.au. (2018). Asx.com.au. Retrieved 30 May 2018, from
https://www.asx.com.au/asx/share-price-research/company/JBH

Marker’s Comments: The marker will provide feedback here. Mark (10):
0
Exceeds Expectations
(High Distinction) 85-100%
Exceeds Expectations
(Distinction) 75 - 84%
Meets Expectations
(Credit) 65 – 74%
Meets Expectations
(Pass) 50 – 64%
Below Expectations
(Fail) below 50%
Demonstrates a balanced and very
high level of detailed knowledge of
core concepts by providing a very
high level of analysis. Utilises
current, appropriate and credible
sources.
Demonstrates a balanced and high
level of knowledge of core
concepts by providing a high level
of analysis. Utilises mostly current,
appropriate and credible sources.
Demonstrates a good level of
knowledge of some of the core
concepts by providing some level
of analysis. Utilises some current,
appropriate and credible sources.
Demonstrates limited knowledge of
core concepts by providing a
limited level of analysis. Utilises
few current, appropriate and
credible sources.
Demonstrates little, if any,
knowledge of the core concepts
with extremely limited, if any,
analysis. Utilises little, if any,
current, appropriate and credible
sources.
Quality of writing at a very high
standard. Paragraphs are
coherently connected to each
other. Correct grammar, spelling
and punctuation.
Quality of writing is of a high
standard. Paragraphs are mostly
well structured. Few grammar,
spelling and punctuation mistakes.
Quality of writing is of a good
standard. Few grammar, spelling
and punctuation mistakes.
Some problems with sentence
structure and presentation
Frequent grammar, punctuation
and spelling mistakes. Use of
inappropriate language.
Quality of writing is at a very poor
standard so barely
understandable. Many spelling
mistakes. Little or no evidence of
proof reading.
The assessment presents a
detailed and focused summary of
the ideas presented; drawing clear
and well thought-out conclusions.
The assessment presents a fairly
detailed and focused summary of
the ideas presented; drawing fairly
clear and well thought-out
conclusions.
The assessment presents a
somewhat detailed and focused
summary of the ideas presented;
providing some evidence of
conclusions.
The assessment provides limited
detail with no clear summary of the
ideas presented; drawing limited
conclusions.
The assessment fails to provide
any clear evidence of the ideas
presented; drawing no clear
conclusions.

Question 4: Show how the Brunswik Lens Model might be used to explain an investor's decision about whether
to buy or sell shares in JB Hi-Fi following their downgrade “announcement”.
Answer: Your answer is written here. The decision made by investors regarding the buying or selling of JB Hi fi
shares can be evaluated under Brunswik Lens Model, which evaluates reactions and ques of the investors. In
addition, the measures also help in authenticating the decision a was made by shareholder of JB Hi Fi after hearing
relevant accountment of profit down grade (Kaminski & Sporer, 2018). Moreover, the announcement conducted
by JB Hi Fi is mainly considered a negative attribute for the organisation, where profits of the company will
eventually decline in in near future. This decline in profits of the company by 3% will directly have negative impact
on return generation capability of the investors. This is the main reason behind the decline in share price of the
company, where future earnings anticipation of JB Hi Fi is directly indicating a reduction in profits by 3%. The
Brunswik Lens Model directly evaluates the accounting information provided by the JB Hi fi, which indicates a
decline in profits of the company. The reaction of the investors was relevantly seen in the same day, where the
massive selling of share incurred and declined its share value by 10%. Hence, investors were keen on selling the
shares of JB Hi Fi according to the Brunswik Lens Model
References:
Insert your references here, for example:
Kaminski, K. S., & Sporer, S. L. (2018). Observer judgments of identification accuracy are affected by non‐valid cues: A
Brunswikian lens model analysis. European Journal of Social Psychology, 48(1), 47-61.
Mark (10):

Marker’s Comments: The marker will provide feedback here. 0
Exceeds Expectations
(High Distinction) 85-100%
Exceeds Expectations
(Distinction) 75 - 84%
Meets Expectations
(Credit) 65 – 74%
Meets Expectations
(Pass) 50 – 64%
Below Expectations
(Fail) below 50%
Demonstrates a balanced and very
high level of detailed knowledge of
core concepts by providing a very
high level of analysis. Utilises
current, appropriate and credible
sources.
Demonstrates a balanced and high
level of knowledge of core
concepts by providing a high level
of analysis. Utilises mostly current,
appropriate and credible sources.
Demonstrates a good level of
knowledge of some of the core
concepts by providing some level
of analysis. Utilises some current,
appropriate and credible sources.
Demonstrates limited knowledge of
core concepts by providing a
limited level of analysis. Utilises
few current, appropriate and
credible sources.
Demonstrates little, if any,
knowledge of the core concepts
with extremely limited, if any,
analysis. Utilises little, if any,
current, appropriate and credible
sources.
Quality of writing at a very high
standard. Paragraphs are
coherently connected to each
other. Correct grammar, spelling
and punctuation.
Quality of writing is of a high
standard. Paragraphs are mostly
well structured. Few grammar,
spelling and punctuation mistakes.
Quality of writing is of a good
standard. Few grammar, spelling
and punctuation mistakes.
Some problems with sentence
structure and presentation
Frequent grammar, punctuation
and spelling mistakes. Use of
inappropriate language.
Quality of writing is at a very poor
standard so barely
understandable. Many spelling
mistakes. Little or no evidence of
proof reading.
The assessment presents a
detailed and focused summary of
the ideas presented; drawing clear
and well thought-out conclusions.
The assessment presents a fairly
detailed and focused summary of
the ideas presented; drawing fairly
clear and well thought-out
conclusions.
The assessment presents a
somewhat detailed and focused
summary of the ideas presented;
providing some evidence of
conclusions.
The assessment provides limited
detail with no clear summary of the
ideas presented; drawing limited
conclusions.
The assessment fails to provide
any clear evidence of the ideas
presented; drawing no clear
conclusions.

Question 5: Some academics have criticised the accounting profession for acting to legitimise the capitalist
system (supposedly by supporting the “haves” against the “have nots”. Indicate whether the case study
supports the critical view of accounting, or whether it doesn’t. Use the case study to support your answer.
Answer: Your answer is written here. After evaluating the all the relevant information, it could be identified that
the case study complies and support the critical view of accounting. From the evaluation it could be identified that
the company is mainly using accounting professions in addressing its future profits. This relevantly indicates that
the company is able to depict the anticipated decline in its profits during the fiscal year with the help of
accounting professionals who aims in legitimating the capitalist system. The anticipated profits are not always
correct, which is depicted by the company, whereas changes in the current valuation could be conducted.
However, the accounting profession directly conducts operations for legitimising the capitalist action conducted
by business. The actions of the accountant relevantly declined the future progress, which is considered as the
capitalist actions conducted by the company. During the financial crisis the accoutring professionals were mainly
responsible for manipulating the annual report and projecting wrong financial performance. Gao et al., (2018)
stated that the manipulations conducted by accoutring professionals led to the liquidation of Lehman Brothers,
which nearly disclosed the financial sector of the world. Thus, it could be understood that the current case study
supports the critical view of accounting where it supports haves against the have nots.
References:
Insert your references here, for example:
Gao, Y. C., Tang, H. L., Cai, S. M., Gao, J. J., & Stanley, H. E. (2018). The impact of margin trading on share price
evolution: A cascading failure model investigation. Physica A: Statistical Mechanics and its Applications, 505, 69-76.

Marker’s Comments: The marker will provide feedback here. Mark (10):
0
Exceeds Expectations
(High Distinction) 85-100%
Exceeds Expectations
(Distinction) 75 - 84%
Meets Expectations
(Credit) 65 – 74%
Meets Expectations
(Pass) 50 – 64%
Below Expectations
(Fail) below 50%
Demonstrates a balanced and very
high level of detailed knowledge of
core concepts by providing a very
high level of analysis. Utilises
current, appropriate and credible
sources.
Demonstrates a balanced and high
level of knowledge of core
concepts by providing a high level
of analysis. Utilises mostly current,
appropriate and credible sources.
Demonstrates a good level of
knowledge of some of the core
concepts by providing some level
of analysis. Utilises some current,
appropriate and credible sources.
Demonstrates limited knowledge of
core concepts by providing a
limited level of analysis. Utilises
few current, appropriate and
credible sources.
Demonstrates little, if any,
knowledge of the core concepts
with extremely limited, if any,
analysis. Utilises little, if any,
current, appropriate and credible
sources.
Quality of writing at a very high
standard. Paragraphs are
coherently connected to each
other. Correct grammar, spelling
and punctuation.
Quality of writing is of a high
standard. Paragraphs are mostly
well structured. Few grammar,
spelling and punctuation mistakes.
Quality of writing is of a good
standard. Few grammar, spelling
and punctuation mistakes.
Some problems with sentence
structure and presentation
Frequent grammar, punctuation
and spelling mistakes. Use of
inappropriate language.
Quality of writing is at a very poor
standard so barely
understandable. Many spelling
mistakes. Little or no evidence of
proof reading.
The assessment presents a
detailed and focused summary of
the ideas presented; drawing clear
and well thought-out conclusions.
The assessment presents a fairly
detailed and focused summary of
the ideas presented; drawing fairly
clear and well thought-out
conclusions.
The assessment presents a
somewhat detailed and focused
summary of the ideas presented;
providing some evidence of
conclusions.
The assessment provides limited
detail with no clear summary of the
ideas presented; drawing limited
conclusions.
The assessment fails to provide
any clear evidence of the ideas
presented; drawing no clear
conclusions.