Lesson Plan FAR600 OBE

Accounting Theory (FAR 600) - Lesson Plan Mar 2015

Lesson plan/FAR600 Page 1

FAKULTI PERAKAUNAN UNIVERSITI TEKNOLOGI MARA

40450, SHAH ALAM

Semester: 8

PROGRAM NAME : BACHELOR DEGREE OF ACCOUNTANCY (HONS) PROGRAM CODE : AC220 COURSE NAME : ACCOUNTING THEORY COURSE CODE : FAR 600 LECTURE : 2 hours/week TUTORIAL : 1 hour/week RESOURCE PERSON : Erolyn Samuel

COURSE OUTCOMES

CO1 Discuss the various theories and paradigms in accounting.

CO2 Demonstrate an understanding on the concept of Islamic Accounting, the need for it and its differences to conventional accounting.

CO3 Evaluate the evolution of the conceptual framework and standard setting process, nationally and internationally.

CO4 Evaluate the relationship between accounting theories and framework to the practice in the real world.



PROGRAM OUTCOMES

PO1 Able to apply knowledge and understanding of accounting and accounting related fields

PO2 Able to prepare accounts, budgets, and costing information, and assist in tax returns, the audit

process and finance functions

PO3 Able to interpret and analyze financial and non-financial information

PO4 Able to assist in financial and managerial accounting reporting for decision making purposes

PO5 Able to coordinate with different functions of the management team

PO6 Able to apply values, ethics, morality and professionalism in their work

PO7 Able to engage in life-long learning

PO8 Able to apply managerial and entrepreneurial skills

PO9 Able to apply managerial and entrepreneurial skills



CO-PO MATRIX

PO1 PO2 PO3 PO4 PO5 PO6 PO7 PO8 PO9

CO1

CO2

CO3

CO4

PROGRAM EDUCATIONAL OBJECTIVES (PEO):

AFTER COMPLETING THIS PROGRAM, graduates would be:

PEO 1 Competent accounting technician who understand and are able to analyze

financial information in providing quality accounting services

PEO 2 Accounting Technicians who are ethical and professional in providing

services to stakeholders

PEO 3 Accounting Technicians who lead and engage in teams in identifying

accounting issues through effective communication abilities.

PEO 4 Accounting technicians who continue to advance his/her knowledge and

abilities by utilizing ICT in managing information and exploring entrepreneurial

activities.



CO-PEO MATRIX

PEO1 PEO2 PEO3 PEO4

CO1

CO2

CO3

CO4



PLAN STRUCTURE

WEEK TOPIC

CONTACT

HOURS

LECTURE/TUTORIAL COVERAGE

TOPIC OUTCOME (TO) CO PO LEARNING

MODEL

ASSESSMENT

1 Historical development of accounting

3 (3L)

Discuss the development of accounting principles in the USA

Discuss the development of accounting theory

Ability to:

describe the historical development of

accounting in the USA from 1900 to

today

appreciate and comprehend the need

to know and understand the relevance

of history to the development and

regulation of accounting and reporting

practices

discuss the development of accounting theory

C03

PO6 PO7

Entrance Survey

Lecture

Group

discussion

ENTRANCE SURVEY

Test

2

Accounting In Islam

3(2L/1T)

(Specific to the 4 articles provided)

Accounting systems and recording procedures in the Early Islamic State

Were Islamic records precursors to accounting books based on the Italian method?

Islamic Accounting – A Primer

The emerging issues in the objectives and characteristics of Islamic Accounting for Islamic business organisations.

Ability to:

Describe the history and development of accounting in Islam

Describe Islamic accounting: o Definition o Objective and characteristics of

Islamic accounting o Fundamental Islamic values to

business activities

Discuss the need for Islamic accounting

Compare the characteristics of Islamic accounting versus conventional accounting

Discuss the concept of „accountability‟

CO1 CO2 CO3

PO1 PO3 PO4 PO5 PO6 PO7

Lecture

Group discussion

Test



in Islam and how it is applied to financial reporting practices.

Discuss Corporate reporting from an Islamic perspective

3-5

Accounting Theory

Construction

Positive Theory of Accounting (PAT) Policy and Disclosure

Capital Market Research

3 (2L/1T)

Theory formulation Pragmatic Theories o Descriptive pragmatic

approach o Psychological pragmatic

approach Syntactic and Semantic

Theories Normative Theories

Positive Theories

PAT Contracting Theory

Agency Theory Political Processes

Philosophy of Positive Accounting Theory

Strengths of Positive Theory o Dissatisfaction with

prescriptive standards

Scope of Positive Accounting Theory

Ability to: Differentiate the different

classifications of theories understand how pragmatic

approaches to theory development apply to accounting

understand normative true income theories and decision usefulness approach to accounting theory

criticise historical cost accounting as a theoretical model

Strengths and weaknesses of the different approach to theory development

Discuss the philosophy of PAT o Explain contracting theory o Explain agency theory

- price protection and agency problems

- how accounting is used in contractual specifications to reduce the agency costs of equity and debt

- how accounting can be used to reduce the political costs faced by the firm

- key criticisms of contracting theories of accounting choice

CO1 CO3 CO4

PO1 PO4 PO5 PO7

Lecture

Group

discussion

Test

6-8

Applying Theory to

Theories relevant to the

practice of accounting and

Ability to:

PBL



Accounting Regulation

The Theories of

Regulation Relevant to

Accounting and Auditing

How Theories of

Regulation Apply to


Practice

The Regulatory

Framework for Financial

Reporting

Statutory Requirements

The Institutional

Structure for Setting


Standards

Standard Setting in

Malaysia

9 (6L/3T)

auditing

Theory of Efficient Markets

Agency Theory Theories of Regulation and

their applications

Public interest theory

Regulatory capture theory

Private interest theory Standard Setting as a Political

Process

Statutory requirements

Corporate Governance

Auditors and Oversight

Independent Enforcement Bodies

The Institutional Structure for setting accounting and auditing standards

The IASB and FASB Convergence Program

Accounting Standards for the Public Sector

International Auditing Standards

Historical development of financial reporting practice in Malaysia

Explain current financial reporting regime in Malaysia

Describe the move towards convergence with International Accounting Standards

Identify the challenges for standard setting

Understand the rationale for regulating financial accounting practice

Argue for and against the existence of accounting regulation

Describe some of the theoretical perspectives used to explain the existence of regulation

Explain how and why various groups within society try to influence the accounting standard-setting process

Discuss some of the theories used to explain what influences the accountant to choose one accounting method in preference to another

Discuss the impact of the standard-setting process on the output of the development of accounting regulation

Describe the historical development of financial reporting practice in Malaysia

Explain current financial reporting regime in Malaysia

Describe the move towards convergence with International Accounting Standards

Identify the challenges for standard setting

CO1 CO3 CO4


Lecture

Group discussion

Tutorial

(Grp Project) Final Exam



9

Normative Theories of

Accounting – The Case

of Conceptual

Framework (CF) Projects

6(3L/3T)

What is a Conceptual

Framework (CF) of

Accounting?

A Brief Overview of the History

of the Development of CFs

o The Trueblood Report o The FASB Conceptual

Framework Project o The (UK) Corporate Report o Development of CFs in

Australia and Elsewhere o Current Efforts of the IASB

and the FASB

Building Blocks of a Conceptual Framework o Definition of the Reporting

Entity o Users of Financial Reports o Objectives of General

Purpose Financial Reporting o Qualitative Characteristics of

Financial Reports o Balancing Relevance and

Reliability o Can Financial Statements

Provide Neutral and Unbiased Accounts of an Entity‟s Performance and Position?

o Definition of the Elements of Financial Reporting

o Definition of Assets o Definition of Liabilities o Definition of Equity o Definition of Income o Definition of Expenses o Recognition of the Elements

Ability to:

Explain the history of the development of various past CF projects

Understand the role that a CF can play in the practice of financial reporting

Identify, explain and critically evaluate the various building blocks that have been developed within the CF

Identify factors including political factors that might help or hinder the development of CF project

Explain which groups within society that are likely to benefit from the establishment and development of CF of accounting

CO3 CO4

PO1 PO2 PO3 PO4 PO5 PO6 PO7

Lecture

Group discussion

Tutorial

PBL (Grp Project)

Final exam



of Financial Reporting o Measurement Principles

Benefits Associated with

Having a CF

CFs as a Means of

Legitimising Standard-Setting

Bodies

10-11

Accounting Measurement Systems

6(3L/3T)

Three Main Income and

Capital Measurement

Systems

Historical Cost Accounting

o Objective of Accounting o Capital and profit o Matching of Costs Theory o Conservatism o Arguments for Historical Cost

Accounting o Criticisms of Historical Cost

Accounting

Current Cost Accounting

o Objective of Current Cost Accounting

o Concept of Business Profit and Financial Capital

o Holding Gains and Losses o Why Holding Gains are a

Component of Profit o Financial Capital versus

Physical Capital o In support of Physical Capital o Arguments For and Against

Current Cost o More Specific Criticisms

Exit Price Accounting

Ability to:

Describe and explain the different versions of measurement of income and capital i.e. Historical Cost, Current Cost and Exit Price Accounting

Explain the basis for acceptance for each of the different measurements

Discuss the concepts of capital and income under Historical cost and Current Cost measures.

Arguments for and against each of the three versions of measurements

Discuss the difference between value in use and value in exchange

CO1 CO4


Lecture

Group discussion

Tutorial

PBL (Grp Project)

Final exam



o Income and Capital o Objective of Accounting o Arguments For Exit Price

Accounting o Arguments Against Exit Price

Accounting Value in Use Versus Value in

Exchange

12-13

Creative Accounting

Earnings Management

Evidence of Earnings

Management for Bonus

Purposes

Other Motivations for

Earnings Management

Patterns of Earnings

Management

Why Does Earnings

Management Persist?

The “Good” Side of

Earnings Management

The “Bad” Side of Earnings Management

6(3L/3T)

Discuss the issues related to creative accounting

Discuss the techniques of creative accounting

Discuss the concept of ethics from the perspectives of creative accounting

Other Contractual Motivations

Political Motivations

Taxation Motivations

Changes of CEO

Initial Public Offerings

To Communicate Information to Investors

Ability to

Describe and differentiate between creative accounting and earnings management

Explain common creative accounting patterns

Discuss some applications of accounting techniques that relate to both earnings management and/or creative accounting

Discuss the motivations behind the practice of earnings measurement and creative accounting

Discuss the “good” and “bad” sides of earnings management and creative accounting and their implications to ethics and governance

CO1 CO4


Lecture

Group discussion

Tutorial

PBL (Case Study)

Final Exam



14

Emerging Issues in Accounting and Auditing

3 (2L/1T)

Current Factors Influencing


Research, Regulation and

Practice

XBRL

The Effects of Corporate Collapses and the Sarbanes-Oxley Act (2002)

Sustainability Accounting,

Reporting and Assurance

What is Sustainability Accounting and Reporting?

Recent Developments in Sustainability Reporting

Trends in Sustainability Reporting Assurance

Why Seek Assurance for Sustainability Reports?

Sustainability Assurance Standards

Other Non-Financial

Accounting and Reporting

Issues

Water Accounting

Water Accounting versus Green House Gas Emission Accounting

Ability to:

Explain and discuss how the technological revolution of XBRL could affect the way that financial statement are prepared including its pros and cons

Discuss the impact of corporate collapses and how they have changed the image of accounting and accounting and its regulatory environments

Describe Corporate Social Reporting Practices in Malaysia

Explain how community or stakeholders‟ perception can influence the disclosure policies of an organisation

Explain why an entity might elect to make particular voluntary disclosures

Explain the concept of sustainable development and how organisations are reporting their progress towards the goal of sustainable development

Identify some of the limitations of traditional financial accounting in enabling users of reports to assess a reporting entity‟s social and environmental performance

Describe triple bottom line reporting

Explain how other non-financial reporting standards with regards to water accounting and greenhouse gas emission accounting become indicators of an important future for accounting

CO1 CO3 CO4


Lecture

Group discussion

Tutorial

PBL (Grp Project)

Final Exam

EXIT SURVEY



COURSE ASSESSMENT/

EVALUATION

Continuous Assessment:

Common Test

Group project (Report and class presentation)

Group Case Study

15%

15%

10%

Final comprehensive examination 60%

Total 100%

GROUP PROJECT (Report 10%; Presentation 5%)

A comparative study on annual reports of two organizations from two distinct specialized industry sectors of the Main Market, Bursa Malaysia. The two

sectors identified for this semester are xxxx; and xxxx.

(Note: Four, with a maximum of five students, per group)

The project should include:

Business and economic literature review on the industries

Study on the background of the companies

Analysis of the differences and similarities of the two different industries with regards to: o Statutory requirements o Corporate governance o Voluntary disclosure including:

- Corporate social responsibility - Environmental issues

Any other observations peculiar to the annual reports Report (10%):

Maximum of 10 pages excluding appendices

Font: Arial, Size 11

Spacing: 1 ½



Presentation (5%): (Using Power Point):

The presentation should be of high standard and it will be assessed according to the following criteria (among others):

Depth of Content

Quality of verbal presentation

Clarity of expression of ideas

Personal appearance

GROUP CASE STUDY (10 %)*

(Note: Two, with a maximum of three students, per group)

2,000 – 3,000 words

Font: Arial, Size 11

Spacing: 1 ½

*Students will be informed of the chosen case and questions during the semester.

REFERENCES Godfrey, J., Hodgson, A., Tarca, A., Hamilton, J. and Holmes, S. (2010). Accounting Theory, J Wiley. (7th Edition)

Scott, W.R. (2009). Financial Accounting Theory. Prentice Hall (5th Edition).

Deegan, C. (2014). Financial Accounting Theory. McGraw-Hill Irwin (4th Edition).

Belkaoui, Ahmed (2000), Accounting Theory, Business Press (4th Edition)



Roshayani Arshad, Draft Chapter, Accounting Theory: Submitted to McGraw Hill.

Mulford, C. W. and Comiskey E. E. (2002). The Financial Numbers Game: Detecting Creative Accounting Practices. J Wiley

Sons (2nd Edition)

Other relevant readings and articles.

Journal articles for Topic 2 – Islamic Accounting:

1) Omar A. Zaid. (2004). Accounting System & recording procedures in the early Islamic States. Accounting Historian Journal.

2) Omar A. Z. (2000). Were Islamic Records Precursors to Accounting Books Based on the Italian Method? Accounting Historian Journal

3) Shahul H. (2000) Islamic Accounting – A Primer

4) Shahul H. and Rizal Y. (2005). The Emerging Issues on the Objectives and Characteristics of Islamic Accounting for Islamic Business Organisations.

PLAGIARISM: The Faculty regards plagiarism as a very serious matter and takes action under the appropriate disciplinary regulations against students who are

involved in cases of plagiarism. Students are expected to discuss their work with peers and tutors. However, they are expected to present their own original

work and make material contribution to the group work.

Lesson Plan FAR600 OBE

Documents

accounting technicians

accounting theories

accounting issues

regulation of accounting

conventional accounting

accounting theory course

concept of islamic accounting

lesson planfar600 page