ACCT 332 Accounting Thought and Practice Singapore Management University School of Accountancy Term 2, 2013/2014 Instructor: Holly Yang Address: 4033 School of Accountancy Phone: 6808-5447 E-mail: hollyyang@smu.edu.sg Meeting Times: Wednesday 3:30-6:45pm Classroom: SOA Seminar Room 2-5 Course Objective The overall objective of this course is to present a review and analysis of the theoretical foundations of corporate financial reporting. This course will focus on conceptual and theoretical issues in financial reporting and accounting standard-setting. Various areas in financial accounting theory and practice will be discussed. Topics that will be covered include: the development of accounting thought; the accounting standard-setting process; conceptual framework in financial reporting; objectives, qualitative characteristics and elements of financial statements; income measurement; definitions and characteristics of assets, liabilities, equity, revenues, expenses, gains and losses. Conceptual issues surrounding selected topics such as leases, goodwill, employee stock options, fair-value accounting, and financial instruments may also be discussed. Course Prerequisites Students are strongly advised to take this course only after completing ACCT201/222 Corporate Reporting and Financial Analysis or ACCT224 Financial Reporting and Analysis. Students who have not completed these courses may be disadvantaged and should be prepared to invest in significant self-study. Course Materials 1. Textbook: Financial Accounting Theory (6 th Edition) by W.R. Scott, Prentice Hall, 2012. 1
2. Journal Articles: Journal articles and other assigned readings will generally be available 2-3 days before class on the course website. Office Hours Wednesday, 1-2 p.m. or by appointment. I strongly encourage you to make full use of my office hours. However, please understand that office hours are intended to help you with any questions you have after you have attended class. Office hours are not intended as make-up sessions for those who fail to attend class, nor as a comprehensive review of classes already given. Class Organization 1. Preparation for Class Class sessions will follow a seminar format with a strong emphasis on student participation and class discussion. Therefore, you should complete the assigned readings before class to ensure that the quality of your questions, submitted responses, and the class discussions are high. 2. In Class Each class session will be run in two parts. In the first half, I will discuss the materials and use examples/problems to illustrate the concepts. In the second half, I will hand out a list of questions for each group to work on together. Groups of no more than five people will be formed the first week of class. Each group is responsible for leading a designated group discussion question in class. When working on the questions, you will not be allowed to refer to the textbook or other readings. You can, however, refer to one (double-sided) sheet of notes. Thus, it is critical that you read the assigned readings before class to enhance your learning experience. The groups will take turns to discuss and present their analysis of the questions. Each student is expected to participate in class, as individual and group participation will account for 10% of your final grade. Grading Your course grade will be determined as follows: Classroom Professionalism 5% Classroom Contributions (individual and group) 10% Midterm Exam 15% Term Paper 10% Term Paper Presentation 10% Final Exam 50% Total 100% 2
Classroom Professionalism Professionalism consists of timeliness, respect for colleagues and the instructor, effectiveness in working with colleagues, etc. I strongly believe that learning is an active process and I expect you to treat this class as you would any significantly work-related responsibility. In general, I will strongly emphasize fairness to all students taking the course. Please do not ask me to make exceptions to these rules that would be unfair to other students in the course. Term Paper/Presentation A term paper and presentation are also required. The paper assignment will involve analysis of a current accounting issue using the theories and concepts introduced in the course. For this paper, groups will assume the role of resident experts for their particular topic of choise and will present the findings of their analyses to the class on April 2 nd. The paper and presentation will each account for 10% of your final grade. The groups for the term paper/presentation will be the same as for in-class discussions. See the Guidelines for Term Paper/Presentation attached to the syllabus for detailed instructions. Exams There is a midterm and a final exam for this course. The midterm exam will comprise of calculation and essay questions that will test your understanding of the course material covered up to the exam date. The final exam is cumulative and will comprise of calculation and essay questions that will test your understanding of all course materials (including group presentations and formulas covered in the assigned readings). The exams are closed-book, but you will be allowed to bring one 8.5 x 11 inch, handwritten cheat sheet (double-sided) to the midterms and final exams. You must get my authorization to be excused from an exam prior to the exam. An unauthorized absence from an exam will result in a grade of zero for the exam. Plagiarism and Academic Integrity The Provost and UCC have requested an amended entry in every course outline in SMU: All acts of academic dishonesty (including, but not limited to, plagiarism, cheating, fabrication, facilitation of acts of academic dishonesty by others, unauthorized possession of exam questions, or tampering with the academic work of other students) are serious offences. All work (whether oral or written) submitted for purposes of assessment must be the student s own work. Penalties for violation of the policy range from zero marks for the component assessment to expulsion, depending on the nature of the offense. When in doubt, 3
students should consult the instructors of the course. Details on the SMU Code of Academic Integrity may be accessed at http://www.smuscd.org/resources.html. Course Outline (subject to change if we fall behind or get ahead of schedule) No. Date Topic Reading (before class) / Special remarks 1 Jan. 8 th Introduction/Overview Chapter 1 2 Jan. 15 th Accounting Under Ideal Conditions 3 Jan. 22 nd Decision Usefulness Approach 4 Jan. 29 th Efficient Market and its Implications Solomons. The Politicization of Accounting Chapter 2 Chapter 3 (Skip sections 3.5-3.7) FASB Concepts No. 8: Conceptual Framework for Financial Reporting *Assign term paper topics Chapter 4 (Skip section 4.8) Beaver. What Should be the FASB s Objectives? 5 Feb. 5 th The Information Approach Chapter 5 FASB Concepts No. 6: Elements of Financial Statements (pp.6-4 to 6-24) Sprouse. The Importance of Earnings in the Conceptual Framework FASB Concepts No. 5: Recognition and Measurement in Financial Statements of Business Enterprises Ball and Brown. An Empirical Evaluation of Accounting Income Numbers 4
No. Date Topic Reading (before class) / Special remarks 6 Feb. 12 th The Measurement Approach Chapter 6 (Read sections 6.1, 6.2.6, 6.2.7, 6.2.11, 6.3, 6.4, 6.6, 6.8) Chapter 7 (Read sections 7.1-7.4.2; 7.7-7.8.5, 7.10) 7 Feb. 19 th Midterm Exam 8 Feb. 26 th Recess 9 Mar. 5 th Economic Consequences and Positive Accounting Theory FASB Concepts No. 7: Using Cash Flow Information and Present Value Chapter 8 Zeff. The Rise of Economic Consequences Gellein. Neutrality has Consequences Watts and Zimmerman. Positive Accounting Theory: A Ten-Year Perspective 10 Mar. 12 th Conflict of Interest and its Implications *Submit hard copies of term paper outlines in beginning of class. Chapter 9 (Skip sections 9.3.2, 9.5, 9.7, 9.8) Chapte4 10 (Read sections 10.1-10.4.1 and 10.4.3) SingTel CEO Compensation 5
No. Date Topic Reading (before class) / Special remarks 11 Mar. 19 th Earnings Management Chapter 11 (Skip sections 11.5.2 and 11.6.2) Levitt. The Earnings Game Cheng and Warfield. Equity Incentives and Earnings Management Healy. The Effect of Bonus Schemes on Accounting Decisions 12 Mar. 26 th Standard Setting Chapter 12 (Skip sections 12.8-12.11) Chapter 13 (Skip sections 13.4, 13.6, 13.7) IASB. Who We Are IASB. Due Process Handbook 13 April 2 nd Paper Presentations Group Presentations 14 April 9 th Study Week 15 April 17 th Final Exam Time: 5-7pm Location: TBD *Submit hard copies of term papers and PowerPoint slides in beginning of class Approved by: Associate Dean, Seow Poh Sun, 24 Dec 2013 6