ASSIGNMENT 2 Question 1 How can Myer-Kmart decision be explained in relation to the following theories in accounting?

(a) Accounting as communication-decision information. (b) Accounting as intracorporate politics. (c) Accounting as social commodity. (d) Accounting as ideology and exploitation. Answer (a) Accounting as a communication-decisions information This is the theory that accounting is actions oriented. Accountings reports are prepared in a manner suited to the need of users and will have an impact on the decisions making behavior of managers and investors. In Myer-Kmart case, Myer used finals quarter sales result to show the shareholder, investor and others users about how well the companies operating. But, because of the disappointing in final quarter sales, the group announces that the chain might be sold or demerged. In order to reduce the cost, Myer plans to merge with Kmart and share the cost. (b) Accounting as a intracorporate politics This theory states that accounting systems reflect and support the values and needs of specific interest groups and that accounting information is constructed and used as a resource in shaping companies policies, especially in decision making and furthering the aims of management. In this case, Myer announced to merge their toy buying capacity with Kmart after the disappointing result in final quarter sales and after the group announces that the chain might be sold or demerged. To prevent the store from being sold, Myer decides to merged with Kmart in order to drive the economic scale, reduced the cost and the profits might be increase.

(c) Accounting as a social commodity. This theory argues that accounting affects the welfare of different groups in society and can be agent for social change. Accounting numbers for firms and accounting numbers produced by regulatory bodies promote or discourage different investment in industries. They have differential impact across industries and firm; they affect the welfare of firms, employees and society at large; and they can hinder or aid government policies in fulfilling their social mandate. In above case, the merging between Kmart and Myer give and positive impact which is their economic scale are getting large besides remove the cost. In a meanwhile, the reducing a cost might be involving an unemployment among the current workers and directly increase the rate of unemployment. (d) Accounting as ideology and exploitation. According to this theory, accounting is a part of the ideological apparatus of capitalist society; it sustain and reinforces societys structure and provides techniques for exploiting and extracting wealth in support of elite interest groups at the expense of employees and society at large. For this case, Myer used the merging with Kmart as an ideology to increase the profitability of the company. But, there is an opinion that there will be exploitation if the merger will make the workers losing their job.

Question 2 1. Accounting is used to provide information justifying Holdens retrenchment of 1400 staff at its Adelaide-based assembly plant. Which of the following is this an example of a. Accounting as an historical record b. Accounting as intracorporate politics. c. Account as standard setting as politics. d. Accounting as mythology e. Accounting as a magic. f. Accounting as social commodity g. Accounting as ideology and exploitation.

2. Develop a syllogism that moves from a premises (a) All firms that are unable to pay a certain rate of dividends to their shareholder should cut back on their unprofitable operations to the conclusions (b); Holden should reach 1400 workers from its Adelaidebased assembly plant. 3. Explain an argument or theory that the federal and state government are likely to have used in coming to the decision to provide $10 million to help retrenched workers. Is this theory inductive or deductive? 4. Are the pragmatics values of the theories you developed in question (2) and (3) weak or strong. Explain.

Answer Question 1 a. Yes. Accounting is used for companies to determine what resources that they have been used and the amount of previous revenue and income that they got. b. Yes, the intracorporate politics occur when company decides to decrease their output which is from 855 vehicles to 620 from next year. That decision will result the retrenchment of 1400 employees in order to maintain the company viability. In this case, financial report of companies will influence the management strategic and company policies. c. Yes. According to this case, Holden blamed the retrenchment of the employees because of falling demands and low margins, which is attributed to high cost, rising oil price, the strong Australian dollar and lower tariff. As giant companies at Australia, Holden will have government to do something in order to make sure, current related issue which resulting the retrenchment will be solve and settled immediately. d. Yes. In this theory asserts that accounting systems provide a societal resource to be used in sustaining concepts of rationality and are means of justifying, rationalizing, and legitimizing decisions that ultimately serve other individual and social ends. In this case, this company using the accounting information to retrenched 1400 employees in order to maintaining company viability.

e. No. according to this theory, accounting is a method of deceiving the users of report. In this case, there is no proof that Holden try to deceive and cheat their report users. f. Yes. In Holden cases, the decisions of retrenchment will affect the employees life and their welfare as they are not hired anymore and didnt getting any pay. It also will increase the current rate of unemployment in Australia as its not easy in getting job in Australia especially in a big town. Because of that, John Howard says, Australian Government will use $10 million rescue package to help the retrenched workers. g. Yes. In this article, Holden blames the decisions of falling demand and low margins, which is due to the current region problems such as high cost, rising oil price, the strong Australian dollars and lower tariffs as the reason of retrenched. Question 2 Premises 1: All firms that are unable to pay a certain rate of dividends to their shareholders should cut back on their unprofitable operations. Premises 2: Holden should cut some unprofitable cost by retrenchment in order to maintain company viability. Conclusion: Holden should reach 1400 workers from its Adelaide-based assembly plant.

Question 3 The theory of statement federal and state governments are likely to have used in coming to the decision to provide $10 million to assist retrenched workers is deductive theory. Premises 1: One of the government responsibilities is to make sure the welfare of Australian resident is cared. Premises 2: To fulfill the responsibilities, the government will spend some amount of money to rescue retrenched workers. Premises 3: Because of the economic crisis, Holden retrenched 1400 workers in order to decrease the unprofitability and maintain company viability.

Conclusion: The government should provide $ 10 million to assist retrenched workers in the country.

Question 4

Pragmatic values are a related to the relationship which is concerned the effect of words or symbols on people. According to the two answers given, pragmatics value developed is high because the words have an effect on people.