Accounting Theory

Write  an essay on Accounting Theory.

 

Accounting Theory

From the above summary on BHP Billiton case, it uses efficient market hypothesis accounting theory for future analysis purpose. It is important to understand the fact that efficient market hypothesis implies investment theory in beating market values of business entity of BHP Billiton (Scott, 2011). It reveals stock market efficiency as well as causes existing share prices in incorporating relevant information for the same. As far as efficient market hypothesis is concerned, it deals with trading of shares at fair values especially on stock exchanges for the same. It proves impossible that stock needs trading at fair values and purchasing at undervalued stocks for future analysis purpose.

Analysis

On critical analysis, it is noticed that BHP Billiton should use efficient market hypothesis for carrying out the business in desired form. It is difficult in outperforming the overall market in response with expert stock selection on market timing for the same. It is one of the possible ways that helps investors in obtaining higher returns in purchasing riskier investments in an overall manner. From the financial theory aspects, BHP Billiton should use EMH for solving the lawsuit and disputes in easier terms. It is pointless in searching for undervalued stocks as well as trying in predicting trends in the markets in fundamental technical analysis in the most appropriate way. It involves from academics for involving in large body of evidence in supporting Efficient Market Hypothesis for the same. It equals amount of dissension for existing models for future analysis purpose. Investors of BHP Billiton needs to emphasis on the consistent beating over market for longer period of time. It defines ways for stock market markets crash as well as viewing at the stock prices in deviating with fair values in an overall manner. Efficient market Hypothesis brings out proper reflection on particular stock evaluation of BHO Billiton. In accordance with EMH, investors pose advantage in predicting the stock prices as well as accessing reliable information for the same. It affects the nature of information as well as limited to financial news on BHP Billiton. It uses information from political, economic as well as social events for combining activities in an effective way. It helps investors in perceiving information on stock price reflection in the most appropriate way. It includes market participants in sustaining with same information as well as possessing ability in gaining news on BHP Billiton. Conclusion

At the end of the study, it is easy to gather facts on the article on BHP Billiton shares dive following Brazil lawsuit. Entire study gives detailed description on the issues faced by BHP Billiton. In the next section, it reveals that BHP Billiton requires for using efficient market hypothesis in solving the lawsuit in the near future. Proper documentations of financial statements by the financial accountant will help in bringing shares in way of Brazil lawsuit for the same. It relies upon the analysis on accounting theory in case of solving BHP Billiton issues in the near future. 

Reference List

Deegan, C. & Unerman, J. (2011). Financial accounting theory. Maidenhead, Berkshire: McGraw Hill Education.

Freeman, R. (2011). Governmental and nonprofit accounting. Boston: Prentice Hall.

Glautier, M., Morris, D., & Underdown, B. (2011). Accounting. Harlow, England: Financial Times/Prentice Hall/Pearson.

Ker, P. (2016). BHP dives on Brazil lawsuit. The Sydney Morning Herald. Retrieved 18 May 2016, from http://www.smh.com.au/business/mining-and-resources/bhp-billiton-shares-dive-following-brazil-lawsuit-20160504-golozb.html

Kester, R. (2012). Accounting theory and practice. New York: Ronald Press Co.

Scott, W. (2011). Financial accounting theory. Toronto, Ont.: Pearson Canada.