Critical appreciation of accounting standard setting process Accounting standards are the outcome

Part A: Critical appreciation of accounting standard setting process Accounting standards are the outcome of a political process. Competing interests and influences of different parties give rise to questions about politics in accounting standard setting process and the quality of accounting standards. (i) Do you think that there is a regulatory capture over the current standard setting process in the US Financial Accounting Standards Board (FASB) and the Australian Accounting Standards Board (AASB)? While explaining your answer, demonstrate your knowledge of the capture theory. (ii) Undertake a review of literature on the political economy of accounting standard setting in the IASB, and give examples of how the IASB responded to the political influences while preparing or changing accounting standards. (iii) Discuss how accounting firms can gain from the political process of accounting standard setting. Part B: Accounting theories in explaining real life financial reporting Positive accounting theorists revolutionised accounting research using the finance/economics theories to explain the quality of financial reporting by considering the rational behaviour (incentives and role) of the agents of a firm. (i) Compare and contrast agency theory (Jensen and Mackling, 1976) and positive accounting theory (Watts and Zimmerman, 1978). (ii) Applying your knowledge of the two theories in B(i) above, explain the rational behaviour of the agents in the fraudulent financial reporting and failure of Enron that collapsed in 2001. Part C: Conceptual frameworks applied in real life financial reporting Download an annual report of a company from top 100 ASX companies. Based on your understanding of the IASB/IASC conceptual framework, explain the following: (i) Is the company a reporting entity? Explain. (ii) Did the company prepare general purpose financial reports or special purpose financial reports? (iii) Identify financial statements and non-financial reports. (iv) Explain the qualitative characteristics of information disclosed in these financial statements accompanied by narratives in notes to the financial statements. (v) Explain the recognition criteria and measurement basis for property, plant and equipment. Part D: Journal of your group and individual contributions (attach in a file) All members will receive equal marks unless reported otherwise. Marks may be deducted if a member does not contribute reasonably. Group members can report here if a member does not appear active. Students who will complete this assessment individually does not need to complete Part D