Financial Accounting Theory

Financial Accounting Theory_OS 2014-2015 1

SYLLABUS [ACCT 11401] FINANCIAL ACCOUNTING THEORY

Odd Semester 2014/2015 Credit: 3

Prerequisite: [ACCT 11301] Advanced Accounting

Lecturers: Dr. Evony Silvino Violita, [coordinator] Center of Islamic Economics and Business FEUI [email protected], [email protected] 08129607364 (mobile), (021)7272425 ext.157 (office)

UNIVERSITAS INDONESIA FACULTY OF ECONOMICS AND BUSINESS International Undergraduate Program


SUBJECT DESCRIPTION This course aims to discuss frame of reference which influence and explain a fundamental of financial accounting practice. Various of those reference might have been inconsistently explained and concluded among them. Lecturing material consists of introduction and approach for accounting theory formulation, its revolution as well as the application of accounting policy. SUBJECT OBJECTIVES In terms of cognitive skills, by studying this subject, the students will improve the ability:

1. Students are able to analyse financial report for company as an business entity based on accounting framework.

2. Students are able to evaluate accounting treatment and practice as a recent and future phenomenon.

3. Students has a good theoretical in accounting practice and procedure, to be applied for recent business situation as well as contemporary issue in the future.

In addition, students will improve: Analytical skill Academic writing skill Presentation skill Team work skill Active discussion skill

Generic Skills to be Developed Intensity Level

Low Moderate High Evaluation of ideas, views, and evidence X Synthesis of ideas, views, and evidence X Strategic thinking X Critical thinking X Self motivation and management X Problem solving skills X Collaborative learning and teamwork X Negotiation and bargaining X Written communication X Oral communication X Case analysis X

SUBJECT MATERIAL(S)

1. Godfrey, Jayne, Allan Hodgson, Ann Tarca, Jane Hamilton, and Scott Holmes. Accounting Theory, 7th Ed. John Wiley & Sons, Inc. 2010. (GOD)


2. Scott, William R. Financial Accounting Theory, 6th Ed. Pearson Prentice Hall, 2012. (WRS)

3. Schroeder, Clark, and Cathey. Financial Accounting Theory and Analysis, 9th Edition. John Wiley & Sons, Inc. 2009. (SCC)

4. Paik, Gyung. The Value Relevance of Fixed Asset Revaluation Reserves in International Accounting. International Management Review, 2009. (Paik, 2009)

5. McCarthy, Mark G., and Douglas K. Schneider. Classification of Financial Instruments with Characteristics of Both Debt and Equity: Evidence Concerning Convertible Redeemable Preferred Stock. Academy of Accounting and Financial Studies Journal, 2001. (McCarthy and Schneider, 2001)

6. Mintz, Stephen M. Proposed Changes in Revenue Recognition under U.S. GAAP and IFRS. The CPA Journal, 2009. (Mintz, 2009)

7. Martin, Jim. Accounting for Expenses. The CPA Journal, 2009. (Martin, 2009)

8. Caylor, Marcus L. Strategic Revenue Recognition to Achieve Earnings Benchmark. Journal of Accounting & Public Policy, 2010. (Caylor, 2010)

9. Ikatan Akuntan Indonesia, Standar Akuntansi Keuangan, Jakarta: Salemba Empat, 2009 (PSAK)

REFERENCES Copeland, Lawrence S., Exchange Rate and International Finance, Harlow, England: Addison-Wesley, 2nd Edition, 1995 (C) Krugman, Paul R., and Maurice Obstfeld, International Economics, Theory and Policy, New York: Addison-Wesley, 5th Edition, 2000 (KO) Eiteman, David K, Arthur I. Stonehill, and Michael H. Moffet, Multinational Business Finance, New York: Addison-Wesley, 9th Edition, 2001 (ESM) Tucker, Alan L., Jeff Madura, and Thomas C. Chiang, International Financial Market, New York: West Publishing Company, 1998 (TMJ) Hallwood and McDonald, International Money and Finance (HM), 2000. Mishkin, F. (M) Financial Markets, Institutions, and Money. 1995 Articles regarding Asia Crisis ASSESSMENT Final grade consists of a. Quiz 10% b. Group Presentation 10% c. Participation 10% d. Individual Paper 10% e. Mid-term Examination 30% f. Final Examination 30%

100%


CLASSROOM ORGANIZATION

One 150-minute lecture per week (total: 14 weeks). Students should be active in discussion and every participation will be noted down

to support assessment.

Quiz will be conducted anytime Students who do not attend the class within 30 minutes will be checked as absent. Teaching Methods consist of:

Lecture yes Class discussion yes Individual Project & paper yes Group project & paper yes Presentation yes Case analysis yes Tutorial no In-class experience exercise yes Collaborative learning yes

Teaching method consists of lecture, students presentation, class discussion, case analysis, problem solving, and cooperative learning. CLASS ASSIGNMENT Group/Individual assignment LECTURER POLICY Assignment should be handed in no later than due date. Any late work will be assessed a penalty of five (5) point a day (max. two days). Work handed in late than three days will be marked for zero (0).


CLASS TIMETABLE

Session

Topic

Sub-Topic

Reference

1 Introduction Accounting

Theory Construction

Overview of Accounting Theory

Pragmatic Theories Syntactic and Semantic

Theories

Normative Theories Positive Theories Other Perspectives and Issues

GOD Bab 1 GOD Bab 2 SCC Bab 1

2 Applying Theory to Accounting Regulation

The Theories of Regulation Relevant to Accounting and Auditing

How the Theories of Regulation Apply to Accounting and Auditing Practice

The Regulatory Framework for Financial Reporting

The Institutional Structure for Setting Accounting and Auditing Standards

GOD Bab 3 WRS Bab 13

(Sub Bab 13.2) SCC Bab 4

3 A Conceptual Framework

The Role of Conceptual Framework

Objectives of Conceptual Frameworks

Developing a Conceptual Framework

A Critique of Conceptual Framework Projects

Conceptual Framework for Auditing Standards

GOD Bab 4 PSAK

KDP2LK SCC Bab 2

4 Measurement Theory

Importance of Measurement Scales Permissible Operations of

Scales Types of Measurement Reliability and Accuracy Measurement in Accounting Measurement Issues for

Auditors

GOD Bab 5


Session

Topic

Sub-Topic

Reference

5 Accounting Measurement Systems

Income and Capital Measurement System

Historical Cost Accounting Current Cost Accounting Financial Capital versus

Physical Capital Exit Price Accounting Value in Use versus Value in

Exchange A Global Perspective and IFRS Issues for Auditors

GOD Bab 6 SCC Bab 5

6 & 7 Assets Liabilities and Owners Equity

Asset Defined Asset Recognition Asset Measurement Challenges for Standard Setters Issues for Auditors

Proprietary and Entity Theory Liabilities Defined Liability Measurement Challenges for Standard Setters

GOD Chapter 7 GOD Chapter 8 PSAK 16

(revised in 2011)

PSAK 19 (revised in 2010)

PSAK 50 (revised in 2010) and PSAK 55 (revised in 2011),, except Derivatives

Paik (2009) McCarthy and

Schneider (2001)

8 & 9 Revenue Expenses

Revenue Defined

Revenue Recognition Revenue Measurement Challenges for Standard Setters Issues for Auditors

Expenses Defined Expenses Recognition Expenses Measurement Challenges for Standard Setters

GOD Chapter 9

GOD Chapter 10



Mintz (2009) Martin (2009) Caylor (2010)


Session

Topic

Sub-Topic

Reference

10 Positive Theory of Accounting Policy and Disclosure

Contracting Theory Agency Theory Agency Problems Signaling Theory Political Process Agency Cost Empirical Test of Theory and

Evaluating the Theory Issues for Auditors

GOD Chapter 11

WRS Chapter 9

11 Capital Market Research

Philosophy of Positive Accounting Theory

Strenght of Positive Theory

Scope of Positive Accounting Theory

Capital Market Research and the Efficient Market Hypothesis

Impact of Accounting Profits Announcements on Share Prices

Trading Strategies Issues for Auditors

GOD Chapter 12

WRS Chapter 4 and Chapter 8 (Sub Chapter 8.2)

SCC Chapter 4

12 Behavioural Research in Accounting (BAR)

Definition and Scope Why is BAR Important? Representativeness: the

Evidence Accounting and Behaviour Limitation of BAR Issues for Auditors

GOD Chapter 13

13 Standard Setting

Standard Setting: Economics Issues

Standard Setting: Political Issues

WRS Chapter 12 and 13 (except sub chapter 13.2)

14 Emerging Issues in

Accounting and Auditing

Factors Influencing Accounting and Auditing Research, Regulation and Practice

Application of Fair Falue Accounting during Global Financial Cricis

Future International Acoounting Standard Setting Arrangements

GOD Chapter 14

SCC Chapter 17


Session

Topic

Sub-Topic

Reference

Sustainabiity Accounting, Reporting and Assurance

Other Non Financial Accounting and Reporting Issues

Financial Accounting Theory

Documents

Transcript of Financial Accounting Theory