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Case Study 澳大利亚会计学案例分析题范文,解答流程说明

This case study is worth 20 marks (20%) towards total assessment

Case Study - Letter from Prison

Questions:
ETHICAL ISSUES
Q1. How serious were Stephen Richards’ actions? If Computer Associates achieved the
same financial results within “allowed Accounting flexibility”, will this change your
answer?

Q2. Richards describes how difficult it is to operate in the “gray areas of accounting”
and wanted more guidance from senior management. Do you agree or disagree with
him? If you were placed in the same position as Richards, how would you handle the
situation? What are the options that you think you would face in deciding what to do?

Q3. Step back and consider management’s incentives and choices. What are Computer
Associate’s motivations to manage earnings and the financial value represented by the
statement of financial position? What type of corporate governance structures in firms
have been identified by the research as a flag, or indicator, that a firm is more likely to
manage/manipulate financial accounting outcomes?

ACCOUNTING ISSUES
Q4. Comment on the GAAP standard that allows software firms to recognize the entire
value of the licensing contract as revenue in the quarter that the contract was affirmed.
Do you think this accounting treatment contributed to the culture at Computer
Associates? Why or why not?

Q5. Exhibit 4 provides an overview of the inflated recorded revenue and EPS. Is it
important for Computer Associates to meet analyst estimates? Why or why not?

Q6. Does accounting management/manipulation have an impact on stock prices? (Hint:
What are the mechanistic and no-effect hypotheses in accounting?) What other evidence
might you collect to analyse whether the actions of Richards in accelerated revenue
influenced stock trading behaviour or provided information to investors in the stock
market?

Further Guidance
1. The word guideline is approximately 1500-2000 words in your initial answer to
Q’s1-6 (total marks 15).
2. You should attempt all questions. However, these questions also provide you
with considerable scope with the detail of your answers (see 3 below).
3. The answer to questions 2, 5 and 6 are greatly enhanced if you access some
research articles that provide empirical results. You should access at least one-two of them to support your answers. Concentrate on the general results – you do
not have to fully understand the models. Further guidance on how to approach
this case study is available from the lecture on 20/21 April.
4. You should also pick one area in which you go into further detail in your answer
(approximate words 500-700, marks 5). You should choose and clearly indicate
which one you choose from one of the following extensions:
a. corporate governance and accounting management (Q3),
b. the importance of meeting analyst forecasts (Q5), or
c. the impact of accounting standards (either individually or the introduction
of International Accounting Standards) on stock prices (Q6).