Question 1: Representing value through the statement of profit and loss
A Managing Director of a for–profit organisation has claimed that profit is the ultimate measure of organisational value. Identify and apply one relevant international accounting standard to counter this argument through the lenses of cash. [15 marks – IAS1 accruals and a clear explanation of why cash is not profit]
Question 2: Representing value through financial lenses
You have been asked by your Managing Director, who has no accounting background and a tendency to turn to data for answers, to undertake a financial ratio analysis of your chosen organisation.
You should follow the conventions outlined at the virtual workshops to undertake financial ratio analysis and present the results visually in no more than three figures/graphs. [15 marks]
Explain to decision–makers in your organisation the limitations of seeking answers to organisational issues which may emerge because of having undertaken financial ratio analysis. You should support your explanation with perspectives from the literature, the financial ratios (in question 2, above) and examples from your organisation [40 marks – 10 explanations, 10 ratio analysis, 10 perspectives from the literature, 10 relevant examples]
Design a governance framework (Quattrone, 2015, 2016) to enable your organisation to embrace ambiguity and uncertainty. In doing so, you must clearly guide the reader through your design choices for each of the four rhetorical principles [30 marks: 5 marks for each principle plus 10 walk through the framework]