Contemporary Issues in Accounting Paper

Instructions: Attempt any four (4) questions with at least one question from each Section A, B, and C.

A. Accounting information economics

  1. Explain how, in general, the information market (or economics) is supposed to work under ideal (perfect) conditions.
  2. Explain at least three (3) reasons that cause the information market failure to produce socially sub-optimal accounting information.
  3. Explain what happens if the market fails to produce optimal accounting information.
  4. Explain at least three (3) remedies to market failure and how the case of Hammel demonstrates how these remedies work.

B. Trends in the use of Technology in accounting

1.As a controller, discuss three risks and three advantages you will consider before moving your company’s accounting function to the cloud.

2.As a new controller, describe with reasons, three reports you will want to receive from your subordinates immediately after you are hired. Also, describe with reasons, three management reports that you will prepare more frequently (perhaps weekly).

3.Accounting practice has become more automated and is rapidly going to the cloud. List and discuss at least three implications of this trend to the future of accounting practice and profession. Is this trend being reflected in: a) accounting enrollment; b) accounting education; c) recruitment of accountants?

C. Corporate Governance, Quality of Accounting Information, and SOX

  1. Explain the concept of corporate governance.
  2. Explain how internal auditors operate within the corporate governance framework. That is, who they are compared to external auditors; what they do; who they report to; limitations they face; why some companies don’t use them, etc.
  3. In your opinion, how would you apply SOX to the Hammel case? That is, how would SOX deal with the governance of Orthofix International N.V.
  4. How did the SEC apply the SOX to Hammel case? Hint: Obtain the Hammel case, Ctr F ‘Sarbanes”, then read and understand the penalty and procedure used.