Question no.1. a) Discuss in brief the development of accounting principles from following view points: i. Institutional contribution phase.

ii. Politicization phase. b) Analyze the relationship between accounting theory, accounting policy and accounting practice. To what extent does the quality of accounting policy and practice depend on accounting theory? Question no.2. a) Why is a conceptual framework necessary in financial accounting? b) Formulating the objectives of accounting depends on resolving the conflicts of interests that exist in the information market.-Discuss. c) How are materiality related to the proper presentation of financial statements? What factors and measures should be considered in assessing the materiality of a misstatement in the presentation of a financial statement? (3+6+6) Question no.3. a. Discuss in brief the following approaches of accounting theory: (i) Deductive approach; (ii) Inductive approach; (iii) Socio logical approach. b. Financial accounting information will be sought if the benefit to be derived from the information exceeds its cost. Do you agree with this statement? Explain. c. What is income smoothing hypothesis? Discuss the different dimensions of smoothing. Question no.4. a. Compare the accountants definition of capital with the definition used by economists. b. Discuss the significance of the concept of capital maintenance. c. Explain the essential differences between the accounting and economic approaches to income measurement. Question no.5. a. Analyze the effects of the cost convention on the measurement of accounting income. b. Review briefly the possible effects of changes in price levels on accounting data. c. State what is meant by current purchasing power accounting. d. Why are human resources not recognized in financial statements? How can an entity report its human resources in financial reports? Question no.6. Write short notes on followings : a. The selective financial misrepresentation hypothesis. b. Accounting and capitalism. c. The free-market approach to the production of accounting standards. d. The American Accounting Association (AAA). e. The public-interest theories of regulation. f. IASB. g. ICAB.

Question No.7. Some argue that having various organizations establish accounting principles is wasteful and inefficient. Rather than mandating accounting standards, each company could voluntarily disclose the type of information it considered important. In addition, if an investor wants additional information, the investor could contact the company and pay to receive the additional information desired. Required: Comment on the appropriateness of this viewpoint. Question No.8. The overriding requirement of a companys financial statements is that they should represent faithfully the underlying transactions and events that have occurred. Therefore, transactions and events have to be accounted for in terms of their substance rather than their legal form. This principles is included in the IASBs Proposed framework for the Preparation and Presentation of Financial Statements. Required: Describe why it is important that substance rather than legal form is used to account for transactions, and describe how financial statements can be adversely affected if the substance of transactions is not recorded. Question No.9. What are the implications for accounting of the increasing concern with green issues?