Assignment 2
Assignment 2
Instruction:
You are to do the assignment individually or in pairs (Only a group of 2
members).
There are 4 Long answer questions to be answered.
To be submitted in hard copy only at my office desk or in the SBM
wooden assignment box.
Type using Times new Roman. Hand written assignment will be
penalized.
All the questions worth 55 marks in total and weight 15% towards your
CA.
Due date: 24th May 2021
Question 1
The Political costs hypothesis predicts how large visible firms will select
accounting policies. Discuss three political costs which BSP and POB might
encounter as a result of this profit announcement. And use the political cost
hypothesis to suggest how they might try to avoid these costs? (10 marks)
Question 2
Keith recently joined a company as an accountant. The Finance Manager has
appointed him to oversee the production of the annual report which includes the
audited financial statements, auditor’s report, director’s report and various
unaudited disclosures.
Required:
a) From your knowledge of Behavioral Accounting Research (BAR), explain to
Keith two importance of BAR that he should consider and two other ways or
formats (apart from text) for presenting information in the annual report, outlining
the strengths and weaknesses of each format. (10 Marks)
b) Keith is also required to work with the external auditors. The company has used
the same auditors for several years. Advise Keith what probabilistic judgement
theory and research assume about human decision making and how the auditors
may be using the following heuristics in their audits:
Question 3
Syrian refugees: Abuse & exploitation in Turkish garment factories
Hundreds of thousands Syrian refugees are working in Turkish apparel factories
(and numbers continue to rise). Most of them do not have the right to work, and
therefore are vulnerable to abuse and exploitation. Women make up the majority of
the textile workforce and are therefore particularly at risk as are children who are
also being used in large numbers.
In December 2015 the Business & Human Rights Resource Centre developed a
questionnaire which it sent to 28 leading brands asking them about the steps they
were taking to protect Syrian refugees from abuse and exploitation in their Turkish
supply chain.
Source: https://www.business-humanrights.org/en/modern-slavery/syrian-refugees-
abuse-exploitation-in-turkish-garment-factories
Required:
a) From the above case, use Stakeholder Theory to identify three (3) stakeholder
groups of apparel factories, outline what they provide to the factories and explain
what the factories provide in return to the respective stakeholder groups. Using the
managerial branch of Stakeholder Theory explain which one (1) of the stakeholder
groups would be considered most important by the apparel factories. (10 marks)
b) Assume a leading brand which sources from one of the Turkish apparel factories
is found to be abusing and exploiting Syrian refugees. Using Legitimacy Theory,
discuss the potential consequences for the brand and possible actions that it could
instigate in response. (5 marks)
Question 4
Using institutional Theory, discuss how Coercive, mimetic and normative pressure
may reduce some of the environmental problems associated with Prawn Farming
and Forestry in Indonesia. (10 marks)