BUS304: Accounting Theory and Accountability


1a. Legitimacy theory is widely used by accounting researchers, particularly to explain the voluntary disclosure made by organisations. Briefly explain how the legitimate behaviour of an organisation leads to the profitability of the firm.

1b. Why is corporate governance important for evaluating earning management.

2a.Explain how Hofstede’s five cultural dimensions have an influence on accounting disclosure.

2b. Explain legitimacy theory and examine how it explain accounting disclosure practice.

3a.Differentiate a normative theory from a positive theory. Provide an example of each. Outline the three agency problems that exist in the relationship between owner and manager.

3b. What factors appear to instigate voluntary sustainability/CSR disclosure by management annual report.

4a. Define corporate governance. Explain how a good corporate governance system can protect the interests of investors/shareholders.

4b. What is the difference between the rules-based and principles-based approaches to corporate governance? Explain the role and impact of accounting in and on corporate governance.