The paper "Why Accounting Used and Provides a Framework for Predicting Accounting Choices" is a good example of finance and accounting coursework. Accounting provides logical reasoning in the form of a broad set of principles that provide a general framework of reference by which accounting practice can be assessed. It also provides a wide set of principles that guide the development of new procedures and practices. This general frame of reference provides a set of propositions and statements that are connected by rules of inferential or logic reasoning (Brown & Alistair, 2006 p.
89). Accounting provides a framework for predicting accounting choices because of its flexibility. Accounting regulation permits a choice of principle. For instance, ion respect of valuation of assets, the international accounting standards permits a choice between carrying non-current assets at either depreciated historical cost or revalued amounts. In this case, it gives business entities an opportunity to change their accounting policies. This indicates how it used and still provides a framework for predicting accounting choices. Notably, such changes by a business entity may be fairly easy to change in the year the change was effected; however, they are much less readily apparent afterwards (Cazavan-Jeny et al. , 2011 p.
153). There are some areas in accounting that are not fully regulated, these areas give entities an opportunity to apply accounting principles and policies of their choice as there is no explicit principle regulating the specific area. For instance, there are quite a few obligatory requirements in respect of accounting for stock options. There is a limitation of accounting regulation in some countries and entities such as accounting for measurement and recognition of pension liabilities and certain aspects of accounting for financial instruments.
This gives entities and accounting professionals an opportunity to apply accounting procedures and principles of their choice (Bens & Daniel, 2006 p. 292). Moreover, accounting gives an opportunity for entities to determine the authenticity of transactions. Entities can determine genuine transactions; they can be timed in order to provide the desired impression in the accounts. For instance, suppose an entity has an investment recorded at historical cost, the investment can easily be disposed at a higher sale price, is the current value.
the managers of the entity have an opportunity to choose in the year they dispose of the investment and hence increase profits in the entities accounts. In this case, accounting provides a framework in which the accounting professionals can make a choice (Reppenhagen, 2010 p. 137).
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Broberg, Pernilla, et al. "Why reduce profit? Accounting choice of impairments in Swedish listed corporations." International Journal of Accounting and Finance 3.1 (2011): 49-71.
Brown, Alistair M. "The financial milieu of the IASB and AASB." Australian Accounting Review 16.38 (2006): 85-95.
Cairns, David, et al. "IFRS fair value measurement and accounting policy choice in the United Kingdom and Australia." The British Accounting Review43.1 (2011): 1-21.
Cazavan-Jeny, Anne, Thomas Jeanjean, and Peter Joos, "Accounting choice and future performance: The case of R&D accounting in France," Journal of accounting and public policy 30.2 (2011): 145-165.
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Kvaal, Erlend, and Christopher Nobes, "International differences in IFRS policy choice: a research note." (2010): 173-187.
Reppenhagen, David. Contagion vs. intrinsic factors of accounting policy choice, Diss. Emory University, (2010): 132-139.
Wyatt, Anne. "Accounting recognition of intangible assets: theory and evidence on economic determinants." The accounting review 80.3 (2005): 967-1003.