BAO3309 ADVANCED FINANCIAL ACCOUNTING

 

Semester 3 Tri 2015

 

 

INDIVIDUAL ASSIGNMENT – 20% (Please contact your lecturer for the due date)

 

“What was the primary cause of the current financial crisis? Sub-prime mortgages, credit default swaps, or excessive debt? None of those, says Steve Forbes, chairman of Forbes Media and sometime political candidate. In his view, mark-to-market accounting was "the principal reason" that the U.S. financial system melted down in 2008.

 

Do accounting rules actually pack such a wallop? For readers not schooled in financial jargon, marking to market is the practice of revaluing an asset quarterly according to the price it would fetch if sold on the open market, regardless of what was actually paid for it. Because the practice allows for no outdated or wishful-thinking valuations, it is a key component of what is known as fair value accounting. And it is at the centre of the hottest accounting debate in decades.

 

Many bankers pilloried fair value accounting when the sudden seize-up of credit markets in the fall of 2008 drove the clearing prices for key assets held by their institutions to unprecedented lows. Economist Brian Wesbury represented the views of that group when he declared, "Mark-to-market accounting rules have turned a large problem into a humongous one. A vast majority of mortgages, corporate bonds, and structured debts are still performing. But because the market is frozen, the prices of these assets have fallen below their true value."” Pozen (2009, p. 85)

 

Reference:

 

POZEN, R. C. (2009) Is It Fair to Blame Fair Value Accounting for the Financial Crisis? Harvard Business Review, 87, 84-92.

 

REQUIRED:

 

 

 

A. Discuss the role of fair value accounting in providing useful information for economic decision making with the help of research literature.

 

 

B. “Measurements by using fair value accounting have played an instrumental role in the creation of global financial crisis. Therefore, we should abandon the use of fair value accounting as a measurement tool.”

 

Evaluate this statement by critically discussing the limitations of fair value accounting with the help of research literature.

 

 

C. From a review of the latest financial statements of two Australian companies from different industries, identify and discuss the extent to which fair value accounting is being applied.

 

 

 

 

 

The following matters should be given particular attention:

 

 

 

Assignment is due in the lecture week beginning (Wk.).

 

 

 

1. Evidence of extensive research beyond the prescribed texts is required. Ensure these are referenced appropriately in your references.

 

 

2. Assignment must be typed and properly documented.

 

Students must submit both printed and electronic copy of assignment through Web-CT turnitin. Assignment should be no greater than 2500 words double-spaced with a 3cm left margin. A word count must be displayed on the title page of assignment. (Note: Word count does not include abstract, introduction, graphs, tables, conclusion and references).

 

 

 

Note: Failure to submit identical printed and electronic copies through VU Collaborate will result in a fail grade.

 

 

3. NO extensions will be granted unless supported by appropriate documentation prior to the due date.An application for an extension must use an application for extension of assessment form, submit an application on or before due date to unit coordinator, be accompanied by a medical certificate or similar evidence, be accompanied by any work completed to date

 

Note:Poor organisation and work commitments are not grounds for an extension. Students’ are responsible to protect their work and save data by making necessary backup. Therefore, loss of data due to a computer or storage devices problems will not be considered a valid reason for an extension.

 

 

4. Essays not using the Harvard system or showing no evidence of research for information are obviously plagiarised will be returned unmarked.

 

 

 

5. This assignment must be handed in for successful completion of the subject before the due. It will count 20% towards the final mark.

 

 

6. Recommendation: Students can submit their completed assignment or partially completed assignment through Turnitin at least 3 days before the due date to get a similarity report. This report will provide guidance and opportunity to students to withdraw their assignment before the due date and resubmit it before the due date after removing similarities and avoiding plagiarism. Remember you cannot withdraw an assignment after the due date.

 

 

 

7. Any assignments handed in late without prior permission of the lecturer/tutor will be penalised 2 (out of 20) marks per day. Do not submit any assessable task by slipping it under the door of your lecturer’s or tutor’s office.

 

 

 

 

 

8. If you cannot submit your assignment through turnitin due to a technical problem then contact unit coordinator immediately.

 

 

Should students need assistance in writing research essay, please seek help from Student Learning Unit.

 

Some useful journals include (alternatively students can also access VU Library to download relevant research material):

 

Academy of Accounting and Financial Studies journal

 

Academy of Accounting and Financial Studies proceedings

 

Accounting and business research

 

Accounting and finance (Parkville)

 

Accounting and the public interest

 

Accounting, auditing, & accountability

 

Accounting, auditing & accountability journal

 

Accounting forum

 

Accounting horizons

 

Accounting in Europe

 

Accounting, organizations and society

 

Accounting perspectives

 

Accounting research journal

 

Accounting review

 

Accounting standard

 

Accounting today

 

Advances in accounting

 

Advances in Accounting, Finance & Economics

 

Advances in international accounting

 

African journal of accounting, economics, finance and banking research

 

Asian Academy of Management Journal of Accounting & Finance

 

Asian journal of finance & accounting

 

Asian review of accounting

 

Asia-Pacific Management Accounting Journal

 

Australian accounting standard

 

Bank accounting & finance

 

British accounting review

 

Canadian accounting perspectives

 

Contemporary accounting research

 

Critical perspectives on accounting

 

European accounting review

 

International accounting bulletin

 

International journal of accounting

 

International journal of accounting, auditing and performance evaluation

 

International journal of accounting information systems

 

International journal of digital accounting research

 

International journal of intelligent systems in accounting, finance & management

 

Irish accounting review

 

Issues in accounting education

 

Issues in Social & Environmental Accounting

 

Journal of accounting & economics

 

Journal of accounting and finance research

 

Journal of accounting & organizational change

 

Journal of accounting and public policy

 

Journal of accounting, auditing & finance

 

Journal of accounting research

 

Journal of Accounting, Business & Management

 

 

Journal of bank cost & management accounting

 

Journal of business finance & accounting

 

Journal of contemporary accounting & economics

 

Journal of corporate accounting & finance

 

Journal of Financial Reporting & Accounting

 

Journal of international accounting, auditing & taxation

 

Journal of international accounting research

 

Journal of international financial management & accounting

 

Journal of management accounting research

 

Journal of modern accounting and auditing

 

Journal of public budgeting, accounting & financial management

 

Journal of theoretical accounting research

 

Malaysian Accounting Review

 

Pacific accounting review

 

Public accounting report

 

Qualitative research in accounting and management

 

Quarterly journal of finance and accounting

 

Quarterly Journal of Finance and Accounting

 

Research in accounting regulation

 

Review of accounting & finance

 

Review of accounting studies

 

Review of quantitative finance and accounting

 

Plagiarism

The University and the School of Accounting view plagiarism as a serious breach of academic discipline. All students of the School should familiarize themselves with the content of this document.

 

 

 

Academic Honesty and Preventing Plagiarism Policy states plagiarism as

 

 

 

“The practice that involves use of another person’s intellectual output and presenting it (without appropriate acknowledgement) as one’s own.

 

 

 

These are examples of Plagiarism:

 

 

 

• Word-for-word copying of sentences/paragraphs in an assignment without acknowledgement or with insufficient or improper acknowledgement;
• Downloading essays or assignments from the web and presenting these for assessment;
• Presenting another student’s work or research data as the student’s work;
• Copying out parts of any text without acknowledging the source(s). This may be written text, structures within texts, diagrams, formulae, sound files, still photographs, audio-visual material (sound and image files), graphics/animations/multimedia objects, other computer based material, mathematical proofs, art objects, products and others. This can be done as verbatim copying or paraphrasing.
• The use of someone else’s concepts, experimental results, experimental conclusions or conclusions drawn from analysing evidence or arguments without acknowledging the originator of the idea(s) or conclusion(s).

 

 

 

Students are responsible for:

 

 

 

• Understanding and respecting the University’s policies and procedures regarding plagiarism, collusion, and other forms of academic misconduct and as such should only submit work for correction or academic credit that is their own or that properly acknowledges the ideas, interpretations, words or creative works of others;
• Avoiding the lending or making accessible original work to others;
• Being clear about the appropriate referencing rules that are applicable to their field of study;
• Refusing to be a party to another student’s efforts to undermine the academic integrity of the University.
• Seeking assistance with their learning and assessment tasks if they are unsure of appropriate forms of acknowledgement. “

 

 

MARKING SCHEME RESEARCH ESSAY

 

SEMESTER 3, 2015

 

Student Name

 

Student Number

 

Tutorial group

 

Mark out of 100

 

Assessment Structure	Excellent	Very Good	Good	Average	Marginal	Poor	Very Poor
1. Synopsis/abstract (5)
2. Introduction (5)
3. Part A (20)
4. Part B (30)
5. Part C (25)
6. Conclusion / recommendation (5)
7. Bibliography, referencing and citations (5)
8. English expression, coherence, grammar and spelling (5)

 

 

Assessment criteria to be applied on Assessments 1 to 6

 

 

Excellent: Work fulfilling the above criteria to an outstanding degree, in particular demonstrating excellence in sustained argument, critical thought and synthesis of material from diverse sources.

 

 

Very Good: Work demonstrating extensive knowledge and understanding of major content areas and issues; the ability to appropriately synthesise material from a range of sources; a well developed capacity for critical analysis of key issues and concepts; the ability to present a defensible personal perspective on issues; evidence of wide reading in relevant areas of the discipline; high quality presentation.

 

 

Good: Above average work demonstrating good knowledge and understanding of major content areas and issues; demonstration of some capacity for critical analysis; the ability to present a perspective on issues; evidence of reading in relevant areas of the discipline; high quality presentation.

 

 

Average: Work of ‘average’ standard which demonstrates a average comprehension both of basic concepts and some issues, based on class work and some further reading in the area; some ability to compare key concepts and theoretical perspectives; average presentation, particularly in regard to structure, expression and referencing.

 

 

Marginal: Work which shows a basic understanding of key elements of the subject matter at a descriptive level, based mainly on attendance at lectures; satisfactory presentation with some deficiencies in structure, expression and referencing.

 

 

Poor: Work which shows little evidence of knowledge or understanding of the subject matter and is unsatisfactorily presented, particularly in regard to structure, expression and referencing.

 

 

Very poor: Work which shows no evidence of knowledge or understanding of the subject matter.