1. Positive Accounting Theory A positive accounting theory is a theory that explains and predicts a particular phenomenon. Positive accounting theory (PAT) seeks and predicts accounting practice. It does not seek to prescribe particular actions. According to (Watts, 1986), “positive accounting theory is concerned with explaining accounting practice. It is designed to explain and predict which firms will and which firms will not use a particular accounting method, but says nothing as to which method a firm should use. “ The word “positive research” was used to distinguish research that sought to explain and predict from research that aimed to provide prescription. It is one of the several popularized positive theories of accounting. Some examples …show more content…
Unless we have an agreement on such central issues, it is difficult to understand how logically consistent accounting standards can be developed. Conceptual Frameworks are developed to provide guidance on key issues, such as objectives, qualitative characteristics, definitions and recognition …show more content…
Utilizing the discussion in policy statement 5, the benefits can be summarized as follows: 1. Accounting standards board should be more consistent and logical, because they are developed from an orderly set of concepts. The view is that in the absence of a coherent theory, the development of accounting standards could be somewhat ad hoc. As the ISAB and FASB, states “ to be principles-based, standards cannot be a collection of conventions but rather must be rooted in fundamental concepts for standards on various issues in coherent financial accounting and reporting, the fundamental concepts need to constitute a framework that in sound, comprehensive, and internals by consistent.” 2. Increased international compatibility of accounting standards should occur, because they are based on a conceptual framework that is similar to that in other jurisdiction (for example, there is much in common between the IASB and FASB frameworks). 3. The AASB and FASB should be more accountable for their decisions, because the thinking behind specific requirements should be more explicit, as should any departures from the concepts that might be included in particular accounting
This memorandum highlights significant portions of Statement on Auditing Standards (SAS) No. 115 Communication of Internal Control Related Matters Identified in an Audit and answers some questions frequently asked by accountants about SAS 115 ("The American Institute Of Certified Public Accountants", 2015). SAS 115 Highlights Here are some highlights of SAS 115. Applicability (SAS 115, 2015, para. 01). Definitions. A material weakness (SAS 115, 2015, para. 06).
The purpose is “to develop, implement, and establish standards for accounting and financial reporting activities are accurate and reliable, and the resulting financial reports are as accurate and beneficial to the end users.” The end users that are discussed in the purpose are the outside users of the financial statements. Outsider users are……
a) Accounting policies and comparison with international accounting standards: Net sales, cost of sales, gross margin, expense, operating income, interest income, taxes, cash, assets, long-term and short-term liabilities, Properties, common stock dividends, total shareholder’s equity are all the accounting policies. All of those and other financial data be used in preparing the Macy’s financial reports. In the section of the common stock. The company’s Board of Directors has the discretion of the declaration and payment of future dividends.
The FASB Accounting Standards Codification (FASB Codification) is the only source of authoritative GAAP apart from SEC issued rules and regulations that apply only to SEC registrants. The FASB issues an Accounting Standards Update to inform people about changes to the FASB Codification, which includes changes to non-authoritative SEC content. In relation to International Financial Reporting Standards (IFRS), after a new IFRS Standard is issued and before it becomes effective, the International Accounting Standards Board (IASB) helps stakeholders to understand the new Standard's principles very well. The activities of the board promote greater consistency in stakeholders' understanding of new Standards as the practice develops, which supports
Amerah alhajri 120016323 Q1 1-clear up assignment reason. on the off chance that the intention is to rouse the utilization of the administrations of a recently framed division, maybe no expenses ought to be dispensed in the event that the reason for existing is to dishearten working division directors from over-utilization of the administrations of bolster offices, then a rate for every unit of administration may be substantial and not in light of genuine expenses on the off chance that the reason for existing is to decide the full cost of items or administrations for long haul estimating choices, then all bolster expenses ought to be assigned 2-recognize cost pools. the reason will figure out if both settled and variable bolster division expenses ought to be dispensed the reason will figure out which expenses ought to be designated Q2 1-physical output. >> 2- market based.>> a-
In the article Accountants Save the World by Peter Bakker, one of his casual claims is that “to address current economic crises in a systematic way, we must begin to demand a return on social and natural capital as well. ”1 As a result, Bakker felt that shareholders would not recognize a company's' social accomplishments if it is not captured in financial reports. However, it could be that shareholders do not put social capital into financial statements because they believe that the only social responsibility of business is profits, like Milton Friedman. Therefore, demanding a return on social and natural capital would be ineffective if the majority of shareholders agree with Friedman's view.
Sarbanes Oxley Act Sarbanes Oxley Act was instituted in 2002 as result of the financial scandals at the end of 1990’s and earlier 2000’s. The act was “named after Senator Paul Sarbanes and Representative Michael Oxley” (Soxlawcom, 2015). The act contains eleven titles. Basically, the purpose of the act was to improve corporate behavior across the country and to restore investor’s confidence in the market by placing accuracy and reliability of corporate disclosure and by imposing certain restrictions and actions in the audit process. There are different opinions throughout the country regarding the efficiency of the act.
In 2002, Paul Sarbanes and Michael Oxley came together to present the Sarbanes-Oxley Act of 2002 (SOX), changing the business world forever. Although SOX was passed over a decade ago, continuous debates remain on numerous faucets surrounding this piece of legislation. The legislation has created extreme feelings and controversy regarding the advantages and disadvantages for public organizations. Along with the passing of SOX, the Public Company Accounting Oversight Board, (PCAOB) was established to oversee and regulate the new changes for public organizations. Discussed below are some of the advantages and disadvantages SOX has prompted since it was passed.
Edmonds, T. P., Tsay, B., & Olds, P. R. (2011). Fundamental managerial accounting concepts (6th ed.). New York, NY: McGraw-Hill
Analysis • This section is regarded as the most critical step in writing an effective accounting memo by bringing together the required facts of the research, any supporting authoritative literature, and an accountants overall evaluation before forming a conclusion. • Analysis includes information from relevant guidance, along with an accountant’s own words about how the guidance is applicable. • The memo should contain enough authoritative guidance that the user will not need to perform additional research in the Codification. • Make sure to utilize the concept known as the “guidance sandwich.”
Traditionally, pro forma earnings are lampooned as “earnings before the bad stuff”, which are lower than the figure according the GAAP. Companies may present to the public their earnings and results of operations on the basis of methodologies other than GAAP. And this presentation in the earnings release is often referred to as “pro forma” financial information. Many companies were thought to be using pro forma figures not only to exclude one-time charges, but also to strip put recurrent costs and other elements that they claimed concealed their “true” performance. “Pro forma” financial information can serve useful purposes.
I have learned through my experiences at the Non-Commissioned Officer Academy that I prefer to use the Management by Exception-Passive (MBE-P) leadership behavior. I realized on more than one occasions that I leave my subordinates to complete their tasks on their own since I usually justify it to myself that they are capable and self-sufficient Staff Sergeants. I realize this is an ineffective approach since my subordinates will perform at the level I display and the standards I set during our feedback sessions. I know I have Idealized Influence because my supervisor recognizes that I display a high level of moral behavior and a strong work ethic. Additionally, my subordinates recognize that I apply Intellectual Stimulation because I value
Having different accounting standards in the world is a problem for multinational public limited companies and investors in order to be able to compare and evaluate financial statements (Doupnik & Perera, 2009). Due to the economic and financial scandals and meltdown in recent years, the pressure has been increased on some countries such as United States. Therefore, it must eliminate the gap between the International Financial Reporting Standards (IFRS) and US Generally Accepted Accounting Principles (GAAP). The world of accounting diversity will have consequences on such changes, and the standard convergence of US GAAP with International Financial Reporting Standards also largely affect corporate management, investment, stock market, accounting personnel and accounting standard setters. In addition, the convergence of accounting standards will change the approach for international accounting harmonization to CPA and CFO, it affects the quality of international accounting quality standards and the effort made toward GAAP and IFRS convergence
Introduction Keeping record of activities and expenditures is crucial in personal finance planning and could really help in managing personal finances. This paper identify what is accounting and how does it help to manage personal finance, describes products of accounting and bookkeeping procedures that are useful in personal financial planning and how personal financial software could assist in personal financial decisions. What is accounting and how does it help you manage your personal finances?
It is this that justifies accounting history as a crucially important academic discipline. “History, in itself is instinctive and indigenous to all of us” (Carnegie. et al, 2011), whether individuals know it or not, everyone’s decision making process is strongly based on past experiences, and the past is the key source resorted to whenever a decision is needed to be made. The same is applicable to accounting, the decisions made today in all practices and approaches are drawn from the historical developments in the accounting process, that have led the practice