7.

Read Exhibit 7.3, and, adopting a positive accounting perspective, consider the following issues: a) If a new accounting standard impacts on profits, should this impact on the value of the firm, and if so, why? b) Will the imposition of a particular accounting method have implications for the efficiency of the organisation?

7.2

Applying Positive accounting Theory, and after reading Exhibit 7.4, answer the following question: a) From an efficiency perspective, why could the introduction of new rules on intangibles be costly for an organisation? b) Why could the introduction of the new rules on intangibles be costly for a manager? c) What would motivate the regulators to develop the new rules?

7.3

Read Exhibit 7.5 and explain why publicity such as this might be costly to an organisation. How would Positive Accounting theorists expect the banks to react to such publicity?

8.1

Read Exhibit 8.6, and using Legitimacy Theory as a basis of your argument, explain why a company such as McDonalds would not want a radio station to make adverse comments about it. If the station does make adverse statements, how might McDonalds react from a corporate disclosure viewpoint?

8.2

Read Exhibit 8.7, and with the material of this chapter in mind, explain why (or perhaps, why not) the community needs to be protected from the media.

8.3

Would you expect management to worry about attitudinal surveys, such as the one described in Exhibit 8.8? Explain your answer, as well as explaining how such surveys might impact on the diclosure policies of an organisation.

8.4

Read Exhibit 8.9 and explain whether you think the banks would or should respond to the concerns of the National Farmers Federation. What theories did you rely upon (if any) to inform your judgement?

10.1

Read Exhibit 10.3 and consider why we might expect, or not expect, the market to react to radio announcements made by Alan Jones. Would a market reaction imply anything about the efficiency of the capital market?

10.2

Read Exhibit 10.5 and, relying upon some of the capital market studies we have considered in this chapter, explain why BHP Ltds share price might have reacted in the way it did.