[Authentic] 201930 ACC518 Assignment 2 Question 1

201930 ACC518 Assignment 2 Question 1
Answering Q1
The purpose of Q1 is to describe a current accounting issue reported in a news article, and then to deconstruct and evaluate the identified issue(s) through the use of relevant accounting theories.
A well-designed answer that addresses the specific aspects of the marking rubric will consider the following:
Identify, describe and discuss the key issues reported in the news article
Link the major issues to ACC518 topics and theories:
Identify a range of relevant accounting theories that are applicable to the issues reported in the news article
Deconstruct and evaluate the issues reported in the news article through the use of theories
Present a logical conclusion regarding the significance of the issues reported in the news article
Include a copy of the news article
Remember you need to do more than just provide descriptions;
your answer must demonstrate that you can think critically.
The Guidance outlines a range of relevant literature. First read through the literature in order to gain a greater understanding of the issues being analysed by your paper, then paraphrase your understanding of the concept or issue in your own words.
201930 ACC518 Assignment 2 Guidance: Academic References has been loaded into the 201930 ACC518 Assignment 2 folder in Student Resources on Interact; it contains links to the various publications, relevant APA referencing information for each publication, as well as referencing information for the other prescribed readings.
A brief context
This guidance is based on an article published in the Australian Financial Review (AFR), an Australian business and finance newspaper published by Fairfax Media six days a week. The AFR publishes in both print and online formats.
Here is the text for the news article:
ASIC kept watch on Pioneer Credit for 12 months
James Frost
3 April, 2019
The corporate regulator has been in discussions with a whistle-blower over accounting standards at Perth-based buyer of bad debt portfolios Pioneer Credit since November 2017 but did not contact the company to express its concerns until a year later, The Australian Financial Review can reveal.
A spokesman for the Australian Securities and Investments Commission said it approached the company in October 2018 after it made statements in its 2017-18 annual report that it had no plans to change a controversial valuation method which subsequently has attracted the attention of its auditor and the ASX.
“ASIC raised questions with Pioneer Credit as part of our routine surveillance of financial reports … We are awaiting further information from the company at this time,” the ASIC spokesman said.
Documents obtained by The Australian Financial Review, however, reveal ASIC was aware of concerns about the company and its methods dating back almost a year earlier with the regulator asking a whistle-blower for more information in November 2017.
Pioneer Credit buys impaired books of retail credit from banks and utilities, often at cents in the dollar, before working with the debtor to collect the outstanding debt. It is the only operator in the space globally that values its debt portfolios at fair value or the price agreed between buyer and seller rather than amortised cost, which writes down the value of the asset over time.
Pioneer Credit’s business model has been under the spotlight since auditor PwC declared earlier this year “sufficient and appropriate information was not yet available to them to determine whether the group’s accounting policy is appropriate”.
‘Appropriate technique’
The qualified audit from February 25 was produced by PwC partner Douglas Craig who also oversaw the annual report for 2017-18 that attracted ASIC’s attention. PwC has declined the opportunity to answer questions about the process, saying “we don’t comment on client matters”.
The company hired international tax specialist David Russell, QC to defend its approach earlier this year. The subsequent opinion from counsel – which backs fair value as an appropriate technique – has been delivered to both PwC and ASIC but has not been made public.
Sources within Pioneer Credit say the reason the company uses fair value and everyone else uses amortised credit is because the company is “a disrupter” and it is a case of “we are right and everyone else is wrong”.
Billionaire Kerry Stokes is among Pioneer’s shareholders with a 5 per cent stake through Wroxby Pty Ltd with the Seven Network holding another 5 per cent stake valued at a combined $14.2 million on Tuesday’s prices. Managing director and founder Keith John also holds 10 per cent, with 8.29 per cent in his own name and another 1.69 per cent held in a related company with the two parcels of shares also worth $14.2 million. Former chief operating officer Lisa Stedman, who left the company in Februa…

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