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Are there differences between accounting theory and practice. What are the examples.
There is no such thing as accounting theory!
For financial accounting it is a set of rules and what you learn for the exams is what is applied in practice.
For management accounting (which presumably is what you are asking about because you have asked this in the Paper F2 forum, and not Paper F3 (which is financial accounting) ) then there are no rules – as a management accountant, in practice you do whatever is more useful / sensible to improve your particular business. What you learn for Paper F2 is various techniques that may prove useful in practice, again depending on the type of business.
I do suggest that you watch the free lectures – they are a complete course for Paper F2 and watching them should answer you question anyway.
you are the manager responsible for prospective new clients and you have visited bolington plc publishers which publishes a small range of fiction books. The chief executive is Daniel Dunbar and he has asked your firm to make a proposal for the company’s audit and other services
MK publishers have heavily borrowed from its bank and a major repayment of the loan is due shortly. The company is already on its overdraft limit as a result of the advances to the new authors. Daniel is in negotiation with a foreign bank for further finance
Many of the company’s books are printed in a country with an exchange rate which is very favourable to Uganda. The financial press have lately suggested that this rate may change in the near future
The company recently purchased a very large and complex computer system to control all its affairs. The IT manager has just left and gone to Australia
The company has no formal management accounting system but the new IT system, when it is working, will supply this
Daniel wishes to maintain the company’s high share price so that he can use the shares to take over a competitor
The company recently took over an ailing printing firm. Daniel reckons he can turn it around
Discussion
Identify and describe the principal business risks relating to bolington publishers
Justify an appropriate audit strategy for the first audit of bolington publishers
Suggest some procedures that bolington publishers could implement immediately to manage the risks
What effect might these risks have on the financial statements
What you have asked is nothing to do with Paper MA, and so I do not know why you have posted it here.
Also, I think that you misunderstand the purpose of our website. We provide free study materials for students taking the ACCA and CIMA examinations, and our forums exist to provide help where students are not clear about anything in our lectures.
We certainly do not provide full answers to question such as this, which you have presumably been given as an assignment and expected do by yourself.
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