ACC30008 Accounting Theory - Written Assignment (Research Assignment)

Assessment Task

Your task is to write a report for the BOD that includes the following aspects to explain the usefulness or otherwise of bottom line earnings and cash flow from operations in making investment decisions.

• Use the research literature and explain whether, and if so how, earnings and cash are useful assets with future earnings potential and whether investors tend to use these pieces of information when making their investment decisions. To do this you are to use at least four quality scholarly journal articles from journal titles listed on the Australian Business Deans Council (ABDC*) journal list.
• Use the 15 Australian Securities Exchange (ASX) listed companies allocated to you (refer Canvas Assignment page for this list) and download data (to an Excel sheet) for earnings per share, cash flow per share, share price and three additional control variables (used in the literature) for years 2011 to 2020 inclusive using the ‘DatAnalysis’ database available online in the Swinburne Library.
• Prepare the variables and examine the association (using regression analysis in Excel) of earnings per share and cash flow per share with share price. You should use the share price at three months from the company’s financial year-end and three other control variables chosen in the regression.
• Briefly explain the descriptive statistics for the data collected and discuss whether your regression results support the literature or not, with appropriate justifications. You can use data visualisation tools (charts in Excel or Google charts) when presenting your descriptive statistics.
• Conclude whether earnings and cash flow information is useful or not for investment decisions.
  Your discussion may make reference to a theory (or theories) studied in ACC30008 in semester 1, 2021.