Financial Accounting Essay

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nancial accounting BUACC2606 Financial Accounting Semester 1, 2012 Assessment weight: 25% Due Date: Week 10 Length: 1500 words maximum Group Assignment: 2 people Format: Report – refer to marking guide attached Collison (1998:7) states that “Attention to the interests of shareholders above all other groups is implicit in much of what is taught to accounting and finance students. The very construction of a profit and loss account is a continual, and usually un-stated, reminder that the interests of only one group of stakeholders should be maximised. Indeed it may be very difficult for accounting and finance students to even conceive of another way in which affairs could be ordered, even at the algebraic level, let alone the moral” 1. Do you agree or disagree with Collison, and why 2. If ‘profit’ maximisation is biased towards maximising the interest of only one stakeholder group, would you expect that over time there will be less emphasis on profits and more emphasis on other performance indicators? 3. What might be some of the alternative measures of performance? 4. Would Collison’s comments provide a justification for moves towards profit measures that incorporate ‘full costs’ (considers the externalities of business)? Provide some current examples of companies that support your point of view. Collison, D.,1998, Propaganda, Accounting and Finance: An Exploration, Dundee Discussion Papers, Department of Accountancy and Business Finance, University of Dundee. 3. What might be some of the alternative measures of performance? To answer this question, two types of performance can be evaluated; first, the performance of the center as an economic entity and, second, management performance. The evaluation of these two performances can be separate or as one. For example, management performance measures

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