...SUMMARY ACCOUNTING THEORY APPLYING THEORY TO ACCOUNTING REGULATION Chapter 3 Karunia Muliani – 1306395224 Silvia M. E. Nabut – 1306408630 Claudia Jusuf – 1306408681 Yovanka G. L. Sianipar - 1306453193 APPLYING THEORY TO ACCOUNTING REGULATION LO 1. THE THEORIES OF REGULATION THAT ARE RELEVANT TO ACCOUNTING AND AUDITING Ada beberapa teori yang relevan terhadap pemahaman lapoan keuangan. A. Teori Pasar Efisien Dalam teori pasar efisien, penganut pasar bebas menyatakan bahwa pasar akan berfungsi paling efisien ketika pasar bergerak atas mekanisme permintaan dan penawaran tanpa campur tangan dari pemerintah. Dalam akuntansi, dapat dikatakan informasi akuntansi adalah sebuah industri memproduksi informasi. Para pendukung teori ini mengatakan bahwa seperi halnya pada pasar bebas, pasar informasi akuntansi juga memiliki permintaan dan penawaranya sehingga terbetuk harga keseimbangan pasar untuk informasi akuntansi. Misalnya, ada sebuah informasi akuntansi dengan pemintaan tertentu dari pengguna dan ada pemasok yang bersedia menyediakan informasi akuntansi tersebut. Maka, ketika pemasok mendapat keuntungan dari memberikan informasi akuntansi tersebut dan pembeli merasa biaya yang dikeluarkan untuk mendapat informasi itu setimpal atau lebih murah, maka dapat terbentuk sebuah keseimbangan pasar. Jika hal tersebut tidak terpenuhi maka informasi akuntansi tidak disediakan. Namun, ada pula kelompok yang tidak mendukung teori ini karena dianggap tidak realistis. Hal ini disebabkan karena...
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...discussed contributors to the accounting literature of the past decade" (1989, p. 327). They are also the joint founder-editors of The Journal of Accounting and Economics, a journal devoted to positive accounting research, which has achieved an international reputation. So their story, while admittedly controversial, has achieved credibility among a significant number of accounting researchers. But what accounts for that credibility? According to Watts and Zimmerman's (1986) view of science, a theory's credibility will ultimately be a function of explanatory power and predictive capability: "Ultimately the users, who assess alternative explanations' intuitive appeal and bear the costs and benefits of theories' predictions, will determine the success of the theory outlined in this book" (p. 355). And a theory, in their conception, consists of: the assumptions, including the definitions of variables and the logic that relates them, and the set of substantive hypotheses" (1986, p. 9). And since the hypotheses of a theory bear the brunt of empirical testing, the primary concern of the empirical testing of PAT is whether or not the hypotheses can predict accounting practice. Prediction of accounting practice means that the theory predicts unobserved accounting phenomena" (1986, p. 2). More concretely, they mean that PAT can be used to predict which accounting procedures will be chosen by management when management faces a "portfolio" of accepted accounting procedures from which to choose...
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...Table of Contents Introduction 2 Summary of the Article 2 Overview of Positive Accounting 2 Research Question 3 Theoretical Framework: 3 The Significance and Limitations of the Article: 4 Findings of Article 4 Conclusions 5 Bibliography 5 References 6 Introduction The main purpose of this report is to focus the positive accounting theory “Towards a Positive Theory of the Determination of Accounting Standards” and written by (Watts & Zimmerman, 1978) Ross L. Watts and Jerold L. Zimmerman, who indicated with a number of significant research in order to describe and contribute positive accounting theory Summary of the Article The element of this article has found that management wealth are based on accounting standards such as cost of production, (purchase, labour and overhead) taxes, political influence. All of these elements are effect in a different way on the management benefits. One of the main points of this article is that earning policy which means (decreasing profit or increasing profit) affects the company size, reputation of entities and certain standards. As a result of this development, management of the organization wealth will increase in a positive way. It is definitely clear to say that (Watts & Zimmerman, 1978) used solid data from the entities, which produce information to the FASB's Discussion Memorandum on General Price Level Adjustment. Findings of this report include to "choose accounting standards which report lower earnings...
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...Seminar in Accounting Theory ADM4342A Fall 2013 |Professor |Kathryn Pedwell, Ph.D. | |Office |DMS 7159 | |Telephone |613-562-5800 Ext. 4766 | |E-Mail |Pedwell@telfer.uottawa.ca | |Office Hours |Tuesday 3:00 – 4:00 p.m. or By appointment | |Class Location |DMS 4130 | |Class Hours |Tuesday: 1:00 – 2:30 | | |Thursday: 11:30 – 1:00 | |Prerequisite(s) | | |Program of Study |BCom mandatory course | |Course Deliverable |Due Date |Weight on Final Grade | |Accounting Assignment |Oct. 3 |15% | |Midterm exam |Oct. 8 ...
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...Globalization? 56 Threats to National Sovereignty 56 Economic Growth and Environmental Stress 57 Growing Income Inequality 57 s | Point ^J3ffi^S^^3 ' Offshoring Good Strategy? 58 Why Companies Engage in InternationaLBusiness Expanding Sales 60 , Acquiring Resources 60 Minimizing Risk 60 60 Modes of Operations in International Business Merchandise Exports and Imports 62 Service Exports and Imports 62 Investments 63 Types of International Organizations 63 Why International Business Differs from Domestic Business 64 Physical and Social Factors 65 The Competitive Environment 67 Looking to the Future: 61 Three Ways of Looking at Globalization 68 C A S E : Carnival Cruise Lines: Exploiting a Sea of Global Opportunity 69 74 Summary Key Terms 75 Endnotes 75 An Atlas 78 Map Index 86 Contents • 2 PART TWO COMPARATIVE ENVIRONMENTAL FRAMEWORKS 90 91 90 The Cultural Environments Facing Business 94 95 C A S E : The Java Lounge—Adjusting to Saudi Arabian Culture Introduction The People Factor Cultural Awareness 96 97 A Little Learning Goes a Long Way The Nation as a Point of Reference How Cultures Form and Change The Idea of a "Nation": Delineating Cultures 98 99 98 Language as Both a Diffuser and Stabilizer of Culture 100 103 Does...
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...Response to Client Request II ACT/541 March17, 2014 Response to Client Request II To: Client From: Consulting Group Subject: Financial Implications of Pending Litigation Financial Repercussions The Generally Accepted Accounting Principles (GAAP) created financial reporting that will have some consequences from the client’s impending litigation. The first impact is with the obligation for contingencies in the financial statements to explain the probable account for the conclusion of the lawsuit that will cause a restatement. Pendantto the outcome of the litigation, the company is ordered to reorganize the debts of the organization via chapter 11 bankruptcy. The legitimacy of a patent is challenged in the lawsuit, which is a revenue creating asset for the client’s. The impending outcome of the asset will create testing the patent for impairment. Reporting Requirements for Lawsuit Contingencies The consequencesoflitigationfor the company financials hinge upon the expectedconclusion of the lawsuit. FASB Codification section 450-20-25-2 stipulates that in the event that theanticipated outcome of litigation results in a loss to the business, and can be rationallyprojected, then the cost should be accrued to the financials and footnoted as such.If the conclusion of the process is most likely to create a loss for the business, but thecost cannot judiciouslybe estimated, then FASB Codification 450-20-50-5 necessitates that a contingency disclosure be included to the...
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...Summary and Research Question: Historically, each nation has developed and applied its own domestic accounting standards; however, globalisation and integration of capital markets result in capital which travels across global boundaries. This process reveals a need for single set of financial standards. At this point, International Financial Reporting Standards (IFRS) are developed by the International Accounting Standards Board (IASB). Even though many researches have been done within the context of the effects of IFRS adoption, those studies have not expounded the background of IFRS adoption systematically. That is why this thesis aims to understand why some economies, on the one hand, have instantly adopted IFRS standards; others, on the other hand, have not completely used, or have rejected it. Background (Literature Review) : According to accounting theory, disclosing relevant and timely information on financial reporting reduce information asymmetry(Sun and Soderstorm, 2007). In general, "A single set of international standards will enhance comparability of financial information and should make the allocation of capital across borders more efficient" (Tweedie, 2004) In considering the rise of IFRS, a positive trend towards IFRS could be stated among countries, whereas some countries have already has negative reaction to the IFRS (Armstrong et al, 2010). The expected benefits of IFRS through enhanced comparability, transparency and quality have been previously...
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...high light Utilitarian theory of Ethics http://www.scu.edu/ethics/publications/iie/v2n1/calculating.html in ethics, the theory that the rightness or wrongness of an action is determined by its usefulness in bringing about the most happiness of all those affected by it. Utilitarianism is a form of consequentialism, which advocates that those actions are right which bring about the most good overall. Jeremy Bentham identified good consequences with pleasure, which is measured in terms of intensity, duration, certainty, propinquity, fecundity, purity, and extent. John Stuart Mill argued that pleasures differ in quality as well as quantity and that the highest good involves the highest quality as well as quantity of pleasure. Herbert Spencer developed an evolutionary utilitarian ethics in which the principles of ethical living are based on the evolutionary changes of organic development. G. E. Moore, in hisPrincipia Ethica (1903), presented a version of utilitarianism in which he rejected the traditional equating of good with pleasure. Sarbanes Oxley Act-high light The legislation came into force in 2002 and introduced major changes to the regulation of financial practice and corporate governance. Named after Senator Paul Sarbanes and Representative Michael Oxley, who were its main architects, it also set a number of deadlines for compliance. An act passed by U.S. Congress in 2002 to protect investors from the possibility of fraudulent accounting activities by corporations...
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...Auditing a Publicly Traded Company ACC/541 June 8, 2015 MEMO TO: Manager FROM: DATE: SUBJECT: Auditing a Publicly Traded Company ________________________________________________________________________ An objective of any publicly traded corporation is to make a return. There are many influences, which can be contributed in completing this goal. The most significant factor is compliance with the accounting governing bodies, such as GAAP (Generally Accepted Accounting Principles). As an accounting firm, it is vital to examine your financial statements on a constant basis. You will need to look for the accounting handling of share-based payment and accounting consolidation theory, as it pertains to special purpose entities and consolidations (Schroeder, Clark, & Cathey, 2011). Share-Based Payments are another way for a publicly held company to offer compensation to his or her employees or other parties, without using the company’s assets. These compensation awards are usually a set number of stocks within the organization. There was already a system in place to account for these transactions, but a revision to the Statement No. 123 was made in 2004. This statement was geared toward Share-Based Payments and was released December 16, 2004, with the original Statement being published in 1995. This revision was created to provide more accurate financial information to users of publicly traded entities, such as our client. Costs incurred by share-based transactions...
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...Toshiba Summary: In February 2015, a financial watchdog in Japan cautioned the financial community of possible accounting irregularities at Toshiba, so an independent panel was put in place to investigate the watchdog’s claims. In April, Toshiba made public that it was going to restate its profit for fiscal years 2011 through 2013 by at least ¥50B (or $419M) due to accounting irregularities at three units of the company (Power System, Social Infrastructure System and Community Solutions). In July 2015, the independent panel indicated that Toshiba overstated its profits by ¥150B ($1.2B), primarily in its electric power systems business from fiscal years 2009 through fiscal year 2013, plus additional irregularities in Toshiba’s personal computer and semiconductor business. The findings forced Toshiba’s Corp. President Hisao Tanaka and several other executives to step down in July. The accounting scheme may have started around 2008 during the global financial crisis, but it is believed that it deepened after Japan’s March 2011 earthquake, tsunami and nuclear disasters because Toshiba supplied two of the reactors affected at the Fukushima Daiichi plant. After this event, Japan shut down the remainder of the nuclear operations at the site, and the demand for nuclear energy around the world was reduced. Toshiba, having a large stake of its business in the nuclear energy production, became affected by the events in 2011, so management at Toshiba set aggressive sales and profit...
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...Synopsis Positive accounting theory is perceived as a hypothetical study in accounting which helps in clarifying and foreseeing tangible accounting procedures. These theories have a tendency to rationalize why a number of accounting practices are accepted than others. Positive accounting theory was introduced to better apprehend exactly how practices in accounting must be effectively managed. Introduction Modern positive accounting research began flourishing in the 1960’s and other introduce empirical finance method to financial accounting. The subsequent literature adopted the assumption that accounting number supply information for security market investment decision and used the information perspective to investigate the relation between accounting number and stack prices. The information perspective has taught us much about the market’s use of accounting numbers. It was structured as an educational thought of discipline by the efforts of Ross Watts and Jerold Zimmerman which when made known were received with extensive criticism. Summary of the Article Positive accounting can be related with the predetermined opinion of a firm. A firm is regarded as a conception initiative put forth by a number of economists and legal commentators which stresses that corporations are nothing more than a compilation of agreements concerning different parties – mostly shareholders, directors, employees, suppliers, customers and accounting – one tool to expedite the materialization...
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...UNIVERSITY Use of Theses This copy is the property of the Edith Cowan University. However the literary rights of the author must also be respected. If any passage from this thesis is quoted or closely paraphrased in a paper or written work prepared by the user, the source of the passage must be acknowledged in the work. If the use desires to publish a paper or written work containing passages copied or closely paraphrased from this thesis, which passages would in total constitute an infringing copy for the purposes of the Copyright Act, he or she must first obtain the written permission of the author to do so. USERS AND ACCOUNTING INFORMATION PREFERENCES OF GOVERNMENT DEPARTMENT FINANCIAL REPORTS by Helen R Mignot B (Bus) A thesis submitted in partial fulfilment of the requirements for the award of Master of Business (Accounting) at the Faculty of Business Edith Cowan University Date of Submission: 05 February 1996 ACKNOWLEDGMENTS AND DEDICATION I wish to thank all those who provided...
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...Letter of Transmittal Date: November 30, 2010 To Mr. Md. Maksudur Rahman Sarker, FCMA Professor Department of Accounting & Information Systems University of Dhaka Subject: Prayer for granting the Report. Dear Sir, Here is the report on “Personal Portfolio Management”. I shall be pleased to thank you for assigning me such an interesting topic. While dealing with the topic, I have gone through different books on portfolio management, local and international research papers, national dailies, annual reports, stock market websites and other world wide webs. It is a great pleasure for me that I have got a practical orientation with portfolio management and the relevant finance theories. Though I have tried my best to include all deserving and relevant information and discussion in the report, it might be considered insufficient to your expertise. But I think you would be generous enough to evaluate the report with a merciful look considering my attempt and effort. Sincerely Yours, Mohammad Munir Hossen MBA-EVENING ID No. 10814062 Department of Accounting & Information Systems University of Dhaka TAble of contents |SL. No. |Topic |Page | | |Executive Summary |v | |1 |Introduction ...
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...FORMULATION OF ACCOUNTING THEORY: PURPOSE AND APPROACHES A TERM PAPER (2) ON ADVANCED ACCOUNTING THEORY (ACC 821) PRESENTED BY EKERIA, Victor IKYUME, Chiahemba James OGBOLE, Philip Osemudiamen SUBMITTED TO PROFESSOR A.E. OKOYE DEPARTMENT OF ACCOUNTING COLLEGE OF BUSINESS AND MANAGEMEN SUDIES IGBINEDION UNIVERSITY, OKADA MARCH, 2015 Abstract As tasks of accounting became more difficult and focus shifted to users’ needs, a theory became necessary. Existence of a need for information for decision making (decision usefulness) in face of information asymmetry led to development of means, tools and techniques for satisfying decision making needs (formulation of accounting theories) This paper briefly discusses the purpose/importance for accounting theory and various approaches to the formulation of an accounting theory under two headings, namely: (1) traditional approaches, and (2) new approaches. The paper finally highlights the critiques of the accounting theory approaches Table of Content 1.0.0. Introduction……………………………………………………………………………… 1 2.0.0. Meaning of Accounting Theory………………………………………………………… 2 2.1.0. Needs and Purpose for Accounting Theory…………………………………………….. 3 3.0.0. Early Attempts at Accounting Theory……………………………………………………...3 4.0.0. Approaches to the for Formulation of Accounting Theory……………………………….5 4.1.0. 4.1.0. The Traditional Approaches………………………………………………………..5 4.1.1. Non – Theoretical, Practical, or Pragmatic (Informal) Approaches……...
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...Global Perspectives on Accounting Education Volume 6, 2009, 25-45 READING AND UNDERSTANDING ACADEMIC RESEARCH IN ACCOUNTING: A GUIDE FOR STUDENTS Teresa P. Gordon College of Business and Economics University of Idaho Moscow, Idaho USA Jason C. Porter College of Business and Economics University of Idaho Moscow, Idaho USA ABSTRACT The ability to read and understand academic research can be an important tool for practitioners in an increasingly complex accounting and business environment. This guide was developed to introduce students to the world of academic research. It is not intended for PhD students or others who wish to perform academic research. Instead, the guide should make published academic research more accessible and less intimidating so that future practitioners will be able to read empirical research and profitably apply the relevant findings. The guide begins by examining the importance of academic research for practitioners in accounting and next reviews the basics of the research process. With that background in place, we then give some guidelines and helpful hints for reading and evaluating academic papers. This guide has been used for several years to introduce master’s degree students to academic literature in an accounting theory class. After reading this guide and seeing a demonstration presentation by the professor, students have been able to successfully read and discuss research findings. Key words: Understanding empirical research, supplemental...
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