ACCG42004D
Acctg Theory & Contemporary Issues
Sheridan
 
  I: Administrative Information   II: Course Details   III: Topical Outline(s)  Printable Version
 
Section I: Administrative Information
  Total hours: 42.0
Credit Value: 3.0
Credit Value Notes: N/A
Effective: Fall 2020
Prerequisites: ACCG32005D
Corequisites: N/A
Equivalents: N/A
Pre/Co/Equiv Notes: 75 credits including ACCG32005D

Program(s): Bach Bus Admin Market Manage, Bach Business Admin Accounting, Bach Business Admin Finance, Bach Human Resources, BachBus Admin Spply Chain Mgmt
Program Coordinator(s): Lorraine Alyea, Sathy Sritharakumar, Carol Bureau, Maryam Hafezi, Mark Weaver
Course Leader or Contact: Preet Bhalla
Version: 20200914_00
Status: Approved (APPR)

Section I Notes: This course will be delivered in hybrid format.

 
 
Section II: Course Details

Detailed Description
Students examine a variety of contemporary issues in the field of financial accounting. By researching academic and professional accounting literature, students develop their professional judgments it relates to emerging issues. Students explore the contributions of finance and economics to accounting theory. Using a seminar-based approach, students lead research-based discussions and debate contemporary issues related to the accounting profession.

Program Context

 
Bach Bus Admin Market Manage Program Coordinator(s): Carol Bureau
This course is an advanced level course in financial accounting that further develops the use of professional judgement in financial reporting. For students admitted prior to Fall 2020, this course can be used as an elective course in BBA Accounting, BBA Finance, BBA Human Resources, BBA Marketing and BBA Supply Chain Management. For students admitted from Fall 2020 onward, this is a required course in the Bachelor of Business Administration (BBA) Accounting program and can be used as an elective in the BBA Finance program.

Bach Business Admin Accounting Program Coordinator(s): Lorraine Alyea
This course is an advanced level course in financial accounting that further develops the use of professional judgement in financial reporting. For students admitted prior to Fall 2020, this course can be used as a required program course in Bachelor of Business Administration (BBA) Accounting or as an elective course in BBA Accounting, BBA Finance, BBA Human Resources, BBA Marketing and BBA Supply Chain Management. For students admitted from Fall 2020 onwards, this is a required course in the Bachelor of Business Administration (BBA) Accounting program and can be used as an elective in the BBA Finance program.

Bach Business Admin Finance Program Coordinator(s): Mark Weaver
This course is an advanced level course in financial accounting that further develops the use of professional judgement in financial reporting. For students admitted prior to Fall 2020, this course can be used as an elective course in BBA Accounting, BBA Finance, BBA Human Resources, BBA Marketing and BBA Supply Chain Management. For students admitted from Fall 2020 onwards, this is a required course in the Bachelor of Business Administration (BBA) Accounting program and can be used as an elective in the BBA Finance program.

Bach Human Resources Program Coordinator(s): Sathy Sritharakumar
This course is an advanced level course in financial accounting that further develops the use of professional judgement in financial reporting. For students admitted prior to Fall 2020, this course can be used as an elective course in BBA Accounting, BBA Finance, BBA Human Resources, BBA Marketing and BBA Supply Chain Management. For students admitted from Fall 2020 onwards, this is a required course in the Bachelor of Business Administration (BBA) Accounting program and can be used as an elective in the BBA Finance program.

BachBus Admin Spply Chain Mgmt Program Coordinator(s): Maryam Hafezi
This course is an advanced level course in financial accounting that further develops the use of professional judgement in financial reporting. For students admitted prior to Fall 2020, this course can be used as an elective course in BBA Accounting, BBA Finance, BBA Human Resources, BBA Marketing and BBA Supply Chain Management. For students admitted from Fall 2020 onwards, this is a required course in the Bachelor of Business Administration (BBA) Accounting program and can be used as an elective in the BBA Finance program


Course Critical Performance and Learning Outcomes

  Critical Performance:
Critical Performance By the end of this course, students will have demonstrated the ability to apply professional judgment, supported by research, in addressing issues in the field of financial accounting.
 
Learning Outcomes:

To achieve the critical performance, students will have demonstrated the ability to:

  1. Analyze contemporary issues in academic and professional accounting literature.
  2. Apply the decision usefulness approach to financial reporting.
  3. Assess the implication of efficient securities markets on financial reporting.
  4. Compare the information approach and the measurement approach to decision usefulness.
  5. Evaluate accounting policy choices using the Positive Accounting Theory.
  6. Recognize the influence of Agency Theory and Game Theory on accounting policy choices.
  7. Determine the relationship between the discretionary and non-discretionary components of executive compensation and earning management behaviour.
  8. Evaluate the economic and political issues influencing standard setting in the accounting profession.
  9. Demonstrate professional behaviours including: a. work effectively in a team environment b. meet due dates c. produce professional quality assignments d. use reference materials responsibly

Evaluation Plan
Students demonstrate their learning in the following ways:

 Evaluation Plan: IN-CLASS & ONLINE INSTRUCTION
 Group Presentation5.0%
 Quizzes (3 x 5%)15.0%
 Mid-term Exam25.0%
 Group Research Project20.0%
 Final Exam35.0%
Total100.0%

Evaluation Notes and Academic Missed Work Procedure:
In addition to achieving a minimum 50% overall grade, a student must have a combined average of at least 50% on the non-group components of the evaluation plan in order to receive credit for this course.

Provincial Context
The course meets the following Ministry of Colleges and Universities requirements:


 

Prior Learning Assessment and Recognition
PLAR Contact (if course is PLAR-eligible) - Office of the Registrar

  • Not Eligible for PLAR

 
 
Section III: Topical Outline
Some details of this outline may change as a result of circumstances such as weather cancellations, College and student activities, and class timetabling.
Instruction Mode: In-class & Online Instruction
Professor: Multiple Professors
Resource(s):
 TypeDescription
RequiredTextbookFinancial Accounting Theory, Scott, W.R. and O'Brien, Patricia C., Prentice-Hall, 8th, 2020

Applicable student group(s): Bachelor of Business Administration
Course Details:

Module 1:  Accounting Under Ideal Conditions
1. Review historical perspective and recent developments in financial
   reporting
2. Identify the fundamental problem of financial accounting theory
3. Evaluate the relevance of financial accounting theory to accounting
   practice
4. Appreciate the concept of ideal conditions
5. Use the present value model under ideal conditions to prepare an
   articulated set of financial statements for a simple firm
6. Evaluate reserve recognition accounting (RRA) as an application of
   the present value model
7. Assess historical cost accounting in the mixed measurement model
8. Question the existence of net income as a well-defined economic
   construct

Learning Outline: 1                              

Text Reference: Ch 1 & 2

Module 2:  The decision usefulness approach to financial reporting
1. Compare rules-based & principles-based accounting standards
2. Assess ways to increase the usefulness of financial reporting
3. Apply the decision theory to a single person
4. Identify issues in applying the decision theory model
5. Describe the rational, risk-averse investor
6. Utilize optimal individual investment decision and the principle of
   portfolio diversification
7. Assess the reaction of professional accounting bodies to the
   decision usefulness approach

Learning Outcome: 2                          

Text Reference: Ch 1.6 & 3

Module 3: Implication of efficient securities markets on financial
reporting

1. Explain the Efficient Market Hypothesis.
2. Discuss how market prices fully reflect all available information
3. Identify the implications of efficient securities markets for
   financial reporting
4. Discuss the informativeness of price
5. Apply a model of cost of capital such as the capital asset pricing
   model (CAPM)
6. Critique the capital asset pricing model
7. Discuss information asymmetry and the fundamental value
8. Identify the social significance of securities markets that work  
   well

Learning Outcome:  3                          

Text Reference: Ch 4
Quiz #1 - 5% (Mod. 1 - 3)

Module 4: The Information approach to decision usefulness
1. Understand the value relevance of accounting information
2. Discuss empirical securities markets-based accounting research
3. Outlining the research problem, methodology and findings
4. Review the Ball & Brown study
5. Evaluate the earnings response coefficient
6. Discuss the value relevance of other financial statement 
   information
7. Appreciate the limitations of empirical securities markets research
   for accounting policy recommendations

Learning Outcome: 4                            

Text Reference: Ch 5

Module 5:  Valuation approach to decision usefulness
1. Understand the valuation approach to financial reporting
2. Discuss reasons why financial reporting is moving in a valuation
   direction
3. Review theory and evidence that securities markets may not be fully
   efficient.
4. Discuss market efficiency versus behavioural finance
5. Defend market efficiency theory and average investor rationality
6. Discuss Ohlson's clean surplus theory
7. Discuss how auditor legal liability leads to conservative   
   accounting

Learning Outcome: 4                          

Text Reference: Ch 6


Module 6: Valuation applications
1. Identify the major financial instrument accounting standards
2. Differentiate between fair value and value-in-use
3. Review long-standing examples of current cost accounting
4. Evaluate accounting for financial assets and liabilities
5. Explain accounting for derivative financial instruments
6. Evaluate a measurement perspective on intangibles
7. Report on risk

Learning Outcome: 4                          

Text Reference: Ch 7

Quiz #2 - 5% (Mod. 4 - 6)

Mid-Term Examination 25% (Module 1 - 6)

Module 7:  The Efficient Contracting Approach to Decision Usefulness
1. Discuss the view of firms using the efficient contracting theory
2. Identify sources of efficient contracting demand for financial accounting information
3. Discuss accounting policies for efficient contracting 
4. Evaluate contract rigidity and employee stock options
5. Research manager opportunism versus efficient contracting
6. Illustrate efficient contracting for debt & stewardship
7. Illustrate a single-period non-cooperative game
8. Illustrate a trust-based non-cooperative game

Learning Outcome: 5                        

Text Reference: Ch 8


Module 8: An Analysis of Conflict
1. Examine models of cooperative game/agency theory 
2. Examine manager's information advantage
3. Identify the implications of agency theory for accounting
4. Reconcile efficient securities market theory with economic  
   consequences

Learning Outcome: 6                      

Text Reference: Ch 9

Group Research Projects Topics Selection due

Module 9:  Executive Compensation
1. Examine the desirability of incentive contracts
2. Discuss the theory of executive compensation
3. Discuss the implications of agency theory for executive 
   compensation
4. Identify the qualities needed by a good performance measure
5. Evaluate the role of net income in compensation plans in relation
   to stock-based performance measures
6. Review empirical evidence on the role of net income in compensation
   plans
7. Evaluate political aspects of executive compensation
8. Understand the power theory of executive compensation

Learning Outcome: 7                      

Text Reference: Ch 10

Module 10:  Earnings management
1. Identify patterns of earnings management
2. Discuss evidence of earnings management for bonus purposes
3. Examine other possible motivations for earnings management
4. Provide arguments in favour of earnings management
5. Provide arguments opposing earnings management
6. Discuss earnings management and market efficiency
7. Discuss the concept of strategic accounting policy choices

Learning Outcome:  7                     

Text Reference: Ch 11

Quiz #3 - 5% (Mod 7 - 10)

Module 11:  The economic issues related to standard setting
1. Discuss the need for the regulation of economic activity
2. Conceptualize ways in which firms can produce information
3. Review incentives for firms to produce information
4. Discuss market failure in information production
5. Discuss the extent to which private market forces limit market
   failure
6. Evaluate costs/benefits of regulation

Learning Outcome: 8                        

Text Reference: Ch 12

Module 12: The political issues related to standard setting
1. Discuss public interest theory of regulation as it applies to
   standard setting
2. Discuss interest group theory of regulation as it applies to
   standard setting
3. Examine the existence of conflict and compromise in standard   
   setting
4. Identify the criteria for a successful standard
5. Discuss information asymmetry between firm manager and regulator
6. Discuss benefits and challenges of international convergence of
   accounting standards

Learning Outcome: 8                        

Text Reference: Ch 13

Group Research Project Reports (20%) and Presentations (5%)

Final Examination (Cumulative) 30%



Sheridan Policies

All Sheridan policies can be viewed on the Sheridan policy website.

Academic Integrity: The principle of academic integrity requires that all work submitted for evaluation and course credit be the original, unassisted work of the student. Cheating or plagiarism including borrowing, copying, purchasing or collaborating on work, except for group projects arranged and approved by the professor, or otherwise submitting work that is not the student's own, violates this principle and will not be tolerated. Students who have any questions regarding whether or not specific circumstances involve a breach of academic integrity are advised to review the Academic Integrity Policy and procedure and/or discuss them with the professor.

Copyright: A majority of the course lectures and materials provided in class and posted in SLATE are protected by copyright. Use of these materials must comply with the Acceptable Use Policy, Use of Copyright Protected Work Policy and Student Code of Conduct. Students may use, copy and share these materials for learning and/or research purposes provided that the use complies with fair dealing or an exception in the Copyright Act. Permission from the rights holder would be necessary otherwise. Please note that it is prohibited to reproduce and/or post a work that is not your own on third-party commercial websites including but not limited to Course Hero or OneNote. It is also prohibited to reproduce and/or post a work that is not your own or your own work with the intent to assist others in cheating on third-party commercial websites including but not limited to Course Hero or OneNote.

Intellectual Property: Sheridan's Intellectual Property Policy generally applies such that students own their own work. Please be advised that students working with external research and/or industry collaborators may be asked to sign agreements that waive or modify their IP rights. Please refer to Sheridan's IP Policy and Procedure.

Respectful Behaviour: Sheridan is committed to provide a learning environment that supports academic achievement by respecting the dignity, self-esteem and fair treatment of every person engaged in the learning process. Behaviour which is inconsistent with this principle will not be tolerated. Details of Sheridan's policy on Harassment and Discrimination, Academic Integrity and other academic policies are available on the Sheridan policy website.

Accessible Learning: Accessible Learning coordinates academic accommodations for students with disabilities. For more information or to register, please see the Accessible Learning website (Statement added September 2016)

Course Outline Changes: The information contained in this Course Outline including but not limited to faculty and program information and course description is subject to change without notice. Any changes to course curriculum and/or assessment shall adhere to approved Sheridan protocol. Nothing in this Course Outline should be viewed as a representation, offer and/or warranty. Students are responsible for reading the Important Notice and Disclaimer which applies to Programs and Courses.


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