Identify and discuss the current regulatory framework or regulations encompassing the preparation… 1 answer below »

 
   

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This assignment aims at developing student’s ability to critically examine the financial reporting
regulations for Australian reporting entities, and the relevance of Positive Accounting Theory (PAT)
in predicting accounting practice. They will have to identify a real-life accounting fraud case and
evaluate it based on their violations of financial reporting regulations. Students will have to do
research on relevant academic literature and demonstrate understanding and critical evaluation of
the Australian financial reporting environment and its current regulatory framework, and
recommend future directions to the Australian financial reporting regulators.
Students are required to review the relevant academic literature, incl. relevant organisation websites
and write in-text citations when answering this assignment.
Required Tasks:
In the body of the assignment, students will have to critically discuss the following issues:
1. Identify and discuss the current regulatory framework or regulations encompassing the
preparation of financial statements by reporting entities in Australia. (5 marks)
2. In your opinion, is the Australian financial reporting environment over regulated? Justify your
answer. [Hint: Cite relevant literature source(s) to back up your answer]. (5 marks)
3. Identify one (1) real-life ‘financial reporting accounting fraud’ that occurred post 1990 (i.e. in
the last 30 years), in any country, and answer the following questions:
a) Summarise the key facts about your chosen ‘financial reporting accounting fraud’ (5
marks)
b) Explain which of Positive Accounting Theory’s (PAT’s) hypotheses predicted the practice(s)
of the parties involved in your chosen accounting fraud. (5 marks)
c) Discuss what specific accounting regulations were violated? (5 marks)
d) What valuable lessons can the accounting community (incl. reporting entities and
regulators), learn from the outcomes of your chosen accounting fraud? (5 marks)
e) Provide two (2) recommendations to the Australian financial reporting regulators, to
prevent accounting frauds from happening in the future. (5 marks)