Part 2 Essay Objective: The objective of this case study is to understand Australian Conceptual Framework in accounting standard setting and in business practices. Discussions: You should select a company listed on the Australian Stock Exchange (ASX) and find a copy of 2014/2015 or 2015/2016 annual report of the chosen company.
According to Australian Conceptual Framework Paragraph 37 (2009 version), it states: ‘Prudence is the inclusion of a degree of caution in the exercise of the judgements needed in making the estimates required under conditions of uncertainty, such that assets or income are not overstated and liabilities or expenses are not understated.’
You need to answers following questions: a) You are required to discuss and evaluate the concept of Prudence. (250 words 2.5 marks)
b) Explain why Prudence is very important in financial reporting. (250 words 2.5 marks)
c) Give TWO (2) examples when Prudence is applied in the annual report of the chosen company. Discuss how Prudence is applied. (600 words, 6 marks).
d) Using the examples you discussed in part c) explore the implications of Prudence for financial statements in future financial year. (400 words, 4 marks) Assessment criteria: The quality of the essay will be assessed based on the following four areas: 1) Demonstrate and identify the accounting concepts and principles applied clearly. 2) Provide examples from the annual report of a chosen company to illustrate the implementation of the concept. 3) Use paragraphs from the Australian Conceptual Framework as a guideline to support your discussion. You may need to use other references as well. 4) Demonstrate effective communication, logical presentation and integrated evaluation.
6 Special Instructions: • Word limit should not be less than 10% of word limit (1,350 words) and not exceed 1,500 words excluding reference list. A loss of 10% of the total marks will apply if you didn’t follow this instruction. • Referencing: If there are any references used in the reflective learning journal, the references should follow Harvard Referencing Style. • You must reserve your company by adding a post on ‘Discussion Board’ under ‘Reserve a company here’. Write the name and code of the chosen company in the description line of your post. If you add the company name in the message and NOT in the description line, then the reservation is void because it will not be readily visible to others. • Submission: Please submit your case study online through the link for Turnitin assignment submission provided on the Blackboard site. • You must use the electronic Assignment Cover Sheet provided, fill in details and then make this sheet the first page of your assignment. Do not send it as a separate document. • The file name should include (in order) initial, your surname and your student number. For example: ‘BParker1235456'. • Your assignment must be submitted as a Word document. If you wish to submit in any other file format please discuss this with your lecturer before the assignment submission date.