PART ONE:

FUNDAMENTALS
001 & 002: Advanced Accounting Theory
Assistant Professor Dr. Haider Aref
December 15 2020

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Accounting as an Information System
in Business and Economic Decisions

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Different Users of Accounting Information

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Environmental Influence on Accounting Development

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The Role of Information in Economic Growth

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 Questions
1. Explain as to how accounting has changed overtime.
2. “Accounting is an information system.” Explain this statement.
3. “An understanding of accounting and an ability to evaluate the information it
produces, requires the understanding of the environment within which accounting
operates and which it is intended to reflect.” In the light of this statement, discuss
the environmental factors influencing accounting development.
4. Discuss the role of accounting in the economic development of a country.
5. “Accounting systems operate within the economic, social and political
framework, and have to be in tune with it.” Explain clearly with the help of
suitable illustrations how accounting has passed through different phases due to
changing economic and social environment.

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 Questions
6. “Since accounting operates in a socio-economic framework as a ‘service’ function, the
socio-economic activities and policies have a major bearing on accounting structures and
processes.” In the light of above statement, explain how accounting systems are influenced
by economic, social and legal environment.
7. “Accounting systems have to be in tune with economic and social environment.” Discuss.
8. “The system of financial accounting and reporting is not static but responds to the
environment in which it operates.” Do you agree? Why or why not?
9. Describe how accounting has changed over the years in response to the changes in
economic, legal and social environment.
10. “Accounting, when born, must not have been more dismal a subject than economics. At
least, it has never been condemned as a ‘Gospel of Mammon’. But later on, as all know,
when economics aimed at the welfare of man as a member of society, it got popular and now
occupies an important position among the social sciences. Accounting, however, continued
serving individuals. As a result, the economist acted as thinker, author and orator on society;
whereas the accountant worked at the desk, shabbily dressed and sincere to his master. The
secret of this significant development in and popularity of economics lay in its social
approach to the well-being of man, which unfortunately accounting failed to have.” Do you
agree with this statement? Why or why not
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 Questions
11. Explain the role of accounting profession in influencing the accounting system in
a country.
12. What is a corporate financing system? How does it influence accounting
environment?
13. Describe the relationship between accounting and economic development.
14. How does accounting information influence economic growth in a country?
15. Explain the factors influencing accounting environment in a country.
16. “The purpose of accounting is to assist people to examine and understand
the relationships which make up the social environment.” Louis Goldberg.
Comment on this statement.

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 Questions
17. “The purpose of accountants in carrying out their accounting functions should be
to help people to examine and understand both their natural and their social
environment so that they may live in peace with both” Louis Goldberg, Examine
this statement.
18. “By communicating to others information resulting from an honest dealing with,
accountants seek to elicit the cooperation of all recognizable parties within the
community concerned with or affected by the control of resources, in attaining a
consensually acceptable allocation and use of those resources.” Louis Goldberg.
Do you agree with the above statement? Why? or why not?
19. Is Accounting an art or a science? Explain.
20. Accounting is a fullfledged social science.” Comment.

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 Questions
21. Define financial statements. What are included in financial statements?
22. What are general features of financial statements as given in Ind AS 1
‘Presentation or of Financial Statement’.
23. Explain the importance of AS 1 ‘Presentation of Financial Statements’ for Indian
Companies.’
24. “Is accounting theory really necessary for the making of accounting rules?”
Discuss.
25. Every year, Financial Times, U.K. comes out with a much awaited ranking of
colleges and universities around the world. Although there has been much
criticism of the methodology that the newspaper employs as well as some
“fudging” of the numbers by universities in their response to the questionnaire,
this report represents what one calls a “social reality.” What is meant by “social
reality” and why does this college and university ranking provide a good analogy
for accounting?
26. “Accounting rule making should only be concerned with information for investors
and creditors.” Discuss this statement.
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Thank You

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