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Assignment Question 1 (10 Marks, 1000 Words)
Read the following quotation from Miller and Reading (1986, p. 64). If
constituency support is necessary before particular accounting approaches
become embodied in accounting standards, does this have implications for
the ‘neutrality’ and ‘representational faithfulness’ (qualitative characteristics
that exist in various conceptual framework projects around the world) of
reports generated in accordance with accounting standards?  
HI6025 Accounting Theory and Current Issue  
TRIMESTER 3, 2015  
“The mere discovery of a problem is not sufficient to assure that the Financial
Accounting Standards Board will undertake its solution … There must be a
suitably high likelihood that the Board can resolve the issues in a manner that
will be acceptable to the constituency—without some prior sense of the
likelihood that the Board members will be able to reach a consensus, it is
generally not advisable to undertake a formal project”.  
Assignment Question 2 (10 Marks, 1000 words)  
 As Watts and Zimmerman (1986, p. 7) state, 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 it says nothing as to which method a firm should use’. Do you
think that this represents an ‘abrogation’ of the academics’ duty to serve the
community that supports them?  
General Instructions for both assignment questions
You should then respond to the statement by arguing a position. Do you
agree or disagree, explaining why. You should give consideration to events in
recent years that may have had an influence.

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