Discuss about the Current Developments in Accounting Thought.
The overall study mainly helps in depicting the accounting issues that is currently being faced by BBY Ltd an Australian stock broking corporation. In addition, the novice effectively evaluates and portrays the issues related to accounting that is faced by the company. Furthermore, the study also helps in depicting the related accounting theories, which was misused by the company. In addition, the novice effectively depicts the related news about BBY Ltd, which is been presented in Sep 23rd of 2016 in the Sydney Morning Herald. Furthermore, the news is decoded effectively to understand the relevant issues of accounting that is conducted by the company, which led to the collapse. The novice effectively depicts the news article with the help of different type of accounting theories, which might in turn depict the violation conducted by the company.
The news mainly states the court hearing, which is been faced by the company for the unethical practices conducted in their operations. In addition, the news mainly stated the plea of Mr Rosewall who is the main person responsible for making the relevant decisions in BBY Ltd (Whitbourn, 2016). Moreover, as per the article Mr. Rosewall mainly relied in the information and suggestion that was presented by Ms Rottinger. This misled information gathering mainly declined the overall profitability of the company during 2014, when the AQA transaction was conducted. In addition, the investment that was been conducted by the company mainly came from the information that was been depicted by Mr Maharaj. Furthermore, the investment opinion was mainly taken from the Sydney psychic, which drastically affected the profitability of the company and increased its debt in ASX. Moreover, the news also related to $61 million, which is been owned to the creditors by the company.
In addition, the news effectively depicted that Mr Rosewall has taken many decisions on the information provided by Mr Maharaj. In addition, the company effectively relied on the information budget and share price movement that was been predicted by Mr Maharaj. Furthermore, the increased reliance of Mr Rosewall in making significant trades mainly on the basis of a person has mainly violated the Capital Market research Theory, which is been depicted in the positive predictive accounting approach. Moreover, the related news also depicted the methods that is been violated by BBY Ltd for conducting their business operations.
Furthermore, the news also clarified that the company was not responsible in making relative decision for appointing an independent director, which could monitor the operations of the company. Mr Rosewall mainly stated that due to the fear of losing their strategic advantage the company mainly refused to indulge in any type of independent directors in their operations. However, after the overall losses it has been discovered that due to the shady operations conducted by the company there was no initiation for appointing an independent director. This non-accumulation of an independent director mainly violates the rule set by AASB and IFRS.
Furthermore, the news depicted that KPMG mentioned that the company was insolvent in early 2011 and used client’s accounts to pay its expenses. In addition, it was also reported in the news that Mr Rosewall also pitched in $1.86 million of his own money, which was gathered from superannuation fund. Moreover, the company has been conducting wrong valuation and violating the AASB rules for projecting the money of its clients.
In addition, BBY Ltd has firstly violated the positive accounting theory, which resulted in the insolvency of the company during 2011. In addition, the news also stated that the company has been insolvent during 2011, which only indicates that the positive accounting practise was not effectively followed. Furthermore, the company did not effectively depict the behaviour of accountant as the accountants were violating the rules laid down by AASBN and IFRS. Bebbington, Unerman & O’Dwyer (2014) stated that positive accounting theory mainly help companies to effectively conduct operations based in Efficient Market Hypothesis (EMH). On the other hand, other researcher mainly criticises that EMH mainly loses its friction during an economic crises. In addition, the company has violated the positive accounting theory by depicting wrong valuation of the company to its reflective shareholders. Moreover, the future projection conducted by the company after 2011 also violated the basic principles of positive accounting theory for presenting the adequate financial projection of the company (Bonin, 2013).
Stakeholder Theory:
In addition, BBY Ltd as the company mainly violates the ethical and organisation management also violate the stakeholder theory. Furthermore, BBY Ltd mainly violated the stakeholder theory by not conducting the adequate ethical measures in reporting the management decisions to its stakeholders. In addition, the company mainly violated the stakeholder theory by conducting unethical investment transactions and trades after losing profits (Bonner et al., 2013). Furthermore, as per the stakeholders theory the company is effectively violating the major rules, which might only depicted the unethical practices conducted by the management. Some of the researchers mainly stated the effective depiction of stakeholder’s theory that mainly helps the company to maintain the ethical operations in their organisation and reduce any fines implemented from authorities.
Furthermore, the stakeholder’s theory also helps in reducing the unethical process, which might reduce profitability of the company. In addition, if the company effectively maintains the stakeholder theory in their management then it could effectively reduce any types of unethical measure, which might decrease trust of its investors. Some of the researcher mainly stated that effective use of stakeholder theory mainly help in improving the trust and demand of shares among potential investors. On the contrary, other researchers stated that companies are manly reluctant in sharing their internal strategy in fear of decreasing their competitive edge against its peers (Bryer, 2013).
In addition, the company also violated the basic accounting rules, which mainly states to conduct effective capital market research before any kind of investment. Some of the researchers mainly states that the effective uses of capital market mainly help investment companies to make adequate investment options, which might in turn help in reducing the risk and increasing return from investment. However, other researchers mainly contradicted by saying that during an economic crisis the increased risks from investment might mainly reduce the ability to make adequate return from investment. In addition, BBY Ltd did not conduct any specific research before conducting the investment, which resulted to the loss in income (Freeman et al., 2014).
In addition, the company mainly relied on the prediction from one person and did not conduct any type of actual research before conducting the investment in AQA transaction. Furthermore, the company made loss due to the wrong depiction of different types of tradition conducted by the company. Furthermore, BBT Ltd mainly conducted transaction from 2011 to 2014 based on predictions conducted only by Mr Maharaj. Researchers mainly depicted that some of the companies mainly conducts investment, which might help in reducing the risk from investment.
In addition, the valuation mainly conducts different types of theories, as if historical cost, current cost accounting, and continues contemporary amounting. Furthermore, BBY Ltd mainly violated the historical cost by depicturing wrong valuation of the company during 2011 to 2014. In addition, the company also violates the current cost accounting theory by depicting wrong valuation on its balance sheet. Some of the researchers mainly stated that following the valuation method mainly help companies to depict the accurate financial position on its annual report. On the contrary, other researcher stated that some companies mainly use the unethical measures to reduce the negative growth and inflate their financial report, which in turn help in attracting more investors (Mattessich, 2013).
Furthermore, BBY Ltd also violated the historical cost and modified historical cost theory by depicting the wrong cost incurred by the company from trades. In addition, as per the news the company mainly projected wrong valuation of the transaction and manipulates their customers account to support the expenses accumulated from transaction. In addition, as per the news article the company mainly violated by depicting the wrong valuation in their financial report, which resulted in the decreased trust obtained from investors. Some of the researchers mainly stated that companies with the help auditors are able to manipulate their financial report and depicts a high financial stability (Mohammadi, 2015).
Conclusion:
The overall research mainly helps in depicting the accounting theory, which is being violated by BBY Ltd in conducting their operations. Furthermore, the study also helps in depicting the overall unethical process, which was being conducted by the company from 2011 to 2014. The novice effectively evaluates different types of accounting theory, which is been violated by the company, which led to the loss incurred during 2014 AQA transactions. In addition, the company mainly violated Positive accounting theory, Stakeholder Theory, Capital Market research Theory, and Valuation method. Furthermore, the company mainly violated the ethical parameters in conducting the investments. In addition, the novice effectively evaluates the news and depicts the problems, which led to the fall of BBY Ltd. Lastly, the overall depiction of news mainly help in understanding the overall violations, which is been conducted by the company during the 2011 to 2014 operations.
Reference and Bibliography:
Bebbington, J., Unerman, J., & O’Dwyer, B. (2014). Sustainability accounting and accountability. Routledge.
Bonin, H. (2013). Generational accounting: theory and application. Springer Science & Business Media.
Bonner, S., Clor-Proell, S., Koonce, L., & Wang, T. (2013). Mental accounting and disaggregation on the income statement. Working Paper, University of Southern California, Texas Christian University, The University of Texas, Queen’s University.
Brigham, E. F., & Ehrhardt, M. C. (2013). Financial management: Theory & practice. Cengage Learning.
Bryer, R. (2013). Americanism and financial accounting theory–Part 3: Adam Smith, the rise and fall of socialism, and Irving Fisher’s theory of accounting.Critical Perspectives on Accounting, 24(7), 572-615.
Freeman, R. J., Shoulders, C. D., Allison, G. S., Smith Jr, G. R., & Becker, C. J. (2014). Governmental and nonprofit accounting: theory and practice.JPAEJOURNAL OF PUBLIC AFFAIRS EDUCATION VOLUME 20 NUMBER 3, 441.
Mattessich, R. (2013). The Rise and Significance of Modern Analytical Methods in Accounting. Part I-A Review Essay of Accounting Theory-An Information Content Perspective, of John A. Christensen and Joel Demski.Energeia, 2(1).
Mohammadi, S. (2015). Full development of the theory of accounting and auditing. International Journal of Accounting and Economics Studies, 3(1), 7-9.
Näsi, S., Saccon, C., Wüstemann, S., & Walton, P. (2014). European accounting theory: evolution and evaluation. The Routledge Companion to Accounting, Reporting and Regulation, 54-71.
Whitbourn, M. (2016). BBY director believed psychic claim was ‘a joke’. The Sydney Morning Herald. Retrieved 25 September 2016, from https://www.smh.com.au/business/banking-and-finance/bby-director-believed-psychic-claim-was-a-joke-20160919-grjznb.html.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download